Does CSI Impact On Your Brand and Business Relations?

development ngos donors corporate social investment
Tuesday, 2 October, 2012 - 10:35

Companies, through CSI, invest in communities to improve the lives of the poor, enable NGOs to sustain their development projects, while enabling both beneficiaries to relate to their brand

There is a school of thought arguing that Corporate Social Investment (CSI) should be done discreetly and below the radar. I have tried to find the business advantage or any advantage, either to the beneficiary organisation or the donor company, in this way of working and came up with a blank. The argument for the donor company that it will prevent a flood of other applications does not really hold water, because the flood is probably already there.

A firm and public association with a specific cause make the inevitable and very difficult decisions not to support some other applications more credible.  The argument on the side of the beneficiary organisation that it may create a perception of wealth and drive away other donors is also naïve. Unless the donor usurps the beneficiary brand entirely, association with a success story in CSI is beneficial to other companies too. It provides an opportunity for companies that may otherwise not do business or share an interest to work towards a common cause.

A public and high profile approach to CSI has distinct advantages. The most important of this is the level of transparency and accountability this promotes. A bag of food, intended for emergency relief and clearly branded to indicate what it is intended for, is slightly less likely to be used for personal profit. When things are done in the public domain, the public tends to notice and that is a good thing. The mutual association between a credible NGO and a successful company holds benefits for perceptions on both brands. When it is done right, it also builds employee commitment and loyalty.

CSI is an intrinsic part of today’s business environment. The planning of CSI strategies and its implementation should probably not be left to the office manager; to organise a ‘feel-good’ event for the employees to support a charity conveniently situated near the office.

A well-defined strategy can help your company to reach out to communities and achieve business objectives through best practice formulas. Several multimillion rand brands familiar to the South African public do this successfully. These include Clover and its Mama Africa Project, and Siemens with its ‘Youthspace’ brand. Telkom and Total CSI initiatives not only support community projects, but are aligned to their respective vision and mission statements. The benefits that their contributions generate reflect positively on their respective reputations and their brands. A fine example is the Steinhoff ‘Extended Family’ programme in support of Abraham Kriel Childcare. The purpose of the programme is to provide care in all aspects to HIV/AIDS infected and affected families, with special focus on child-headed households to improve their quality of life and to help them function independently.

The majority of organisations have some way in which they are giving back to the community – either by donating or investing in projects. It is obvious what difference these companies are making in communities provided they proclaim it. What is not so obvious is how social responsibility reflects on these companies. Effective programmes can change your business relations, share values and customer loyalty.

It is not just the biggest companies that are involved in CSI; even the smallest pharmacy in a rural town is hands-on busy in their communities and that is why their community returns the support. Recent research studies revealed that companies that are perceived by the public to adopt more socially responsible business practices and ethics are more likely to perform well financially than those who do not. Companies who engage in CSI gain a better public image, which translates into better sales and customer loyalty and may lead to improved financial results.  

Another benefit of strategic engagement in CSI is that it satisfies both the internal and external stakeholders of your company. The external stakeholders’ interest will be in the outcomes of the overall results of their investment. The internal stakeholders, who include employees, often need the workplace to find an outlet for their own needs to make a positive impact on the world around them. They are normally more involved and would therefore like to know the details, the measurable progress and latest news. This contributes by strengthening employees’ commitment to the company, which again improves working relationships within the company.

All organisations strive to be seen as worthy competitors by their peers. Michael Porter, internationally renowned corporate strategy authority says that today’s companies ought to invest in corporate social responsibility as part of their business strategy to become more competitive. The leaders of most companies that engage in CSI initiatives are considered ‘captains’ of industry by the media. A company is required to comply with specific corporate governance guidelines to qualify for a listing on the Johannesburg Stock Exchange (JSE). So, if ever you had a dream of your company making it into the big leagues - start now. It does not matter how small the investment, the multiplier effect of benefits is extensive. In addition, your company qualifies for tax benefits when you are supporting an acknowledged public benefit organisation in a measurable way.

Should your company already engage in a CSI programme, tell your clients about it. Distribute relevant news items to the media and publish your programme internally and externally. Use your employees as ambassadors and involve them to spread the word of goodwill. Align your CSI with your company values and goals.  According to petroleum company Total, it makes sense for businesses to align their corporate social investment with their core business objectives and imperatives. A business-like approach to community engagement will attract greater notice and support. It moves CSI out of the charitable sphere and into one in which true partnerships with beneficiaries, government and NGOs bring about sustainable development to the benefit of all. In that way your company can be sure to report on achieving the triple bottom line.

- Hilda du Toit is marketing manager at Abraham Kriel Childcare. For more articles or stories visit abrahamkriel.tumblr.com or www.abrahamkriel.org.

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