A new economic reality has arrived. It came how they often do—gradually, then all at once. Leaders who’d gone all in on rapid growth are downshifting to focus on short-term viability.
All the sudden, quarterly financial goals loom larger. Long-term projects slide to the back burner.
Unfortunately, this atmosphere puts corporate social responsibility programs (CSR) at risk. But abandoning CSR when the market gets volatile is like tossing your compass overboard when a storm blows in.
The truth is: markets might be changing, but expectations are not. All the reasons a CSR program made good business sense last year are even more valid now. Both consumers and employees have high expectations when it comes to social impact, with more than 70% of consumers interested in how brands are addressing social and environmental issues and 60% of employees choosing where they work based on their values. And they are all watching to see how brands respond to the current market.
Plus as the recent report from Deloitte highlights, environmental and ethics regulations continue to add pressure.
If anything, this is not the time to abandon your CSR mission. It’s time to double down. Because you don’t change course when the seas get rough. You get more strategic. Here’s how.
Respond to reality, not headlines
It’s true that the market is shifting for many high-growth, high-profile companies, but the headlines don’t tell the whole story. There are a whole lot of businesses still quietly growing and innovating—they’re just not on the front page right now.
As with much public storytelling, the loudest voices are the ones that make sweeping, dramatic proclamations about where things are headed. Look at the recent conversations around quiet quitting and the shift to remote work. For a while, everywhere you looked, someone was making a new exaggerated claim about the future of work. Reality tends to be more nuanced than headlines would suggest.
Right now, the sky may be cloudy, but it’s not falling.
It’s also important to understand the long arc of social progress. Equity, diversity, justice, and sustainability are not achievable as quarterly goals. They take a sustained, coordinated effort. Candidly, if our commitment to making meaningful change wavers every time the market dips, we don’t stand much of a chance.
Strengthen the ties between CSR and business objectives
In the same way that a volatile market can expose the cracks in a business strategy, these fluctuations also provide a stress test for your CSR strategy.
If company leaders have been treating CSR programs like pet projects, that has to change now. Corporate purpose is an essential business initiative. It needs to be planned and resourced as such.
To be effective, CSR programs need to be strategically integrated with other business initiatives. If you haven’t already, now is the time to tie your CSR mission clearly to business goals.
For example, Splunk, a data company, focuses a good portion of their CSR work on bridging the data divide—the gap between those who have access to the internet, computers, and technical skills, and those who don’t. The mission is a natural extension of their business strategy and it leverages their greatest strengths as an organization.
As part of the Impact Studio Conference, Patricia Toothman, the social impact manager at Splunk, talked about linking the pillars that support business and social impact work: “Connecting all of those pillars and really working towards our overall mission of bridging the data divide, that’s our new BHAG—our Big, Hairy, Audacious Goal. And that’s our North Star as we’re evolving, iterating, and creating new programs.”
As you advocate for your programs, be sure to connect them to your own North Star. And make an effort to explicitly tie your work to broader company objectives such as:
- Employee satisfaction
- Brand loyalty
- Professional development
- Customer engagement
- Strategic partnerships
Measure the full value of your CSR programs
In times like this, it’s easy to get locked in on the black/red dichotomy of money in/money out. When it comes to measuring the true value of your social impact programs, don’t get stuck here.
Look at the full range of outcomes that your program contributes to. Alongside the internal outcomes around company culture and employee engagement, the impact of your programs extends into the community. In 2021, corporate giving accounted for over $21 billion of support for charitable causes.
In the past, the effect on communities was considered more a feel-good aspect of CSR. But recent events have reminded all of us how interconnected community and business are. Larry Fink’s letter is proof that the most successful corporate leaders are the ones who understand the full ecosystem that their business exists within. In reality, when the community thrives, businesses do too.
CSR and ESG initiatives also help your business future proof. Rather than reacting to new social and environmental regulations as they happen, you’ll be proactively planning for them. In the long run, a gradual, intentional approach to these changes is good for everyone. Even investors are prioritizing ESG compliance.
Kari Niedfeldt-Thomas, managing director of corporate insights & engagement for CECP, explains how CSR can help you future proof this way: “Companies for generations were focused around what shareholders wanted. And shareholders sometimes were only concerned about the short term. They wanted to be able in the short term see a company increase their profits to a point, see the stock go up so they could sell. They weren’t there for a long-term model. Yes, maybe the company is meeting all minimum regulatory standards, but they’re not necessarily looking at a net-zero future of where the market is potentially headed and where they have to be prepared to operate as a business when the rules might change.”
When company leaders cut CSR programs, they are sometimes focused on the operational costs they’ll save. But you have to take into consideration the costs and the damage to the brand and the community. Revealing your company to be a fair weather ally is a particularly bad look. Plus, if market forces are impacting your business, odds are nonprofits and community members are feeling the squeeze too. Pulling back support now will be extremely destabilizing.
Setting up the infrastructure and partnerships to support your CSR work and then dismantling them can be like taking one step forward, then two steps back.
Find opportunities to innovate
It’s true that the current economic pressure might force you to shift how you provide support to community organizations. It’s time to think outside the box. If you don’t have the resources to fund the same level of grants or donations you’ve done in the past, consider other avenues of giving such as:
- Employee giving & matching: Set up a fundraising campaign to encourage employees to donate.
- Volunteering: Organize volunteer events to give nonprofits additional capacity.
- In-kind donations: Donate your products or services directly to a nonprofit.
- Marketing & advocacy: Use your platform to spread the word about an organization and its cause.
As much as this moment tests your commitment to social impact, it will also reveal a lot about your relationships with your nonprofit partners. Do you know what they need? Or do you at least know how to ask what they need?
If you’ve just been writing checks, now is the time to pivot and start building a deeper relationship. Think of the organizations you work with as true partners. Invest time in seeking their feedback and learning how you can better support their work.
This moment also calls for efficiency. Teams will be doing more with less. Case and point: many DEI teams are being cut, but if you look closely, many companies are not backing off their DEI goals. Do everything you can to streamline and centralize your CSR processes to put your team in the best position to deliver results.
Come out stronger on the other side
Like many moments of adversity, this is a chance for your team to weather the storm and come out stronger and wiser on the other side.
As belts tighten and business leaders get even more obsessive about ROI, there’s intense pressure for CSR professionals to make programs as compelling as possible. Now is the time to shore up your strategy.
The big upside of this pressure? Leveraged in the right way, this intensity can shape your social impact programs to be more effective, more efficient, and more ingrained with your business.
For those in the business of social impact, there may be a storm to weather, but the future is bright.