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ASU Lodestar Center Blog

Rethinking corporate social responsibility

Twenty years ago, I was privileged to serve as a senior consultant and trainer with the newly created Center for Corporate Community Relations at Boston College (now the Center for Corporate Citizenship).

In the two decades that have elapsed, the scope and texture of corporate social responsibility (CSR) have evolved dramatically. Then, the focus of my consultation was on community needs assessments, priority-setting, and allocations processes; today, the focus is on impact and return on investment. In the coming years, given dramatic changes in the marketplace, the context and scope of CSR may need to take a giant paradigmatic leap.

What was once a matter of checkbook philanthropy is now decidedly strategic, and the driving forces of CSR revolve around the convergence or fit between the company’s business interests (its customers, product line, and brand) and the offerings of potential nonprofit beneficiaries.

Corporate support is today an indispensable component of the nonprofit organization’s diversified fundraising strategy. Corporate presence and visibility in the community have been most effectively accomplished through relatively low cost/high yield investments, including short-term project grants, event sponsorships, cause-related marketing, voluntarism and hands-on projects, in-kind giving (e.g., printing, marketing, human resources, information technology services), and board membership.

This is all good and deeply appreciated. However, it may not be enough.

The nonprofit business model is increasingly vulnerable to the volatility of the nonprofit marketplace and broad social, political, economic, and technological trends.

For example, health, behavioral health, and social service organizations, already limited in capacity and infrastructure, will have a devil of a time adjusting to new models for care delivery, requirements for electronic documentation of metrics and outcomes, and changes in the financing of services.

Likewise, for nonprofit arts and cultural organizations, similar challenges exist because of the impact of new technologies and alternative forms of entertainment on audience tastes and behavior.

Among the most severe impediments to nonprofit sustainability are fundamental deficiencies in funding, capacity and infrastructure. Notwithstanding countless initiatives and grants to address this dilemma, the business model problem remains.

It is because of this altering landscape and the inherent threats to nonprofit viability that I believe that there is an urgent need to rethink the nonprofit business model and our structural arrangements for philanthropy and governance. In this context, I believe that corporations have a unique and vital role to play in the reinvention of the nonprofit sector – because nonprofits can’t do it alone and because corporations have the infrastructure and intellectual capital to help nonprofits transform their business models.

So, the time is ripe, I believe, for the next shift in CSR: from strategic branding-driven philanthropy to pragmatic collaborative philanthropy, whereby corporate leadership is actively invested as partners with government and nonprofits in business redesign, technology transfer, community problem-solving, and capacity-building.

The challenge for progressive CSR leaders is to delineate their company’s role in these endeavors and accessible processes for deploying their resources. Because corporations are deep reservoirs of human and intellectual capital that extend beyond their corporate contributions and foundation programs, they have much to offer in cultivating environments where individuals and families can thrive – where they want to work, live, play, and stay. After all, if corporations wish to be defined as people, then they need to act like people and share more proactively in building the common wealth.

Likewise, leaders in the nonprofit sector, individually and collectively, should develop a unified strategy for leveraging corporate resources for broad-based and integrated organizational development, capacity-building, and community development. The advocacy strategies of nonprofits may need now to shift from a focus on government to a focus on the private sector, encouraging if not urging active public/private partnership for community development.

Herb Paine is a business strategy consultant specializing in organization development, governance, turnaround management,and mergers.


ASU Lodestar Center Blog