Taking corporate community investment to the next level

If you work in corporate community investment (CI) – sponsorships, partnerships, programs, volunteering, pro bono and the like – chances are you’ve had a massive year. 'Massive' is probably the right word for corporate CI in Australia in 2023. Corporate giving from the big end of town surged by nearly 10% this year, with donations from the top-50 givers surpassing $1.5bn for the first time (representing a remarkable fifty per cent increase since 2019).

Giving, which fell during COVID, has recovered to and surpassed pre-pandemic levels.

Both these figures, and our own experiences working with clients active in the corporate CI space, strongly suggest there is an ever-growing recognition of the importance, usefulness, and potential power of well-executed corporate investment into communities.

But as Dr Emily Heath and I argue in our forthcoming paper on the evolution of CI (due for release in early 2024), there is a real difference between large reportable contributions and meaningful, measurable impact. And, indeed, between increasing the volume of giving and increasing the strategic value for the firms that give.

In short, volume does not automatically equal value.

Whilst we are in full throated support of the continued expansion of corporate CI, all investments are not created equal for the companies that make them, nor for the communities and partners who are beneficiaries.

Based on our work with both public and private sector clients who are designing, funding and running large-scale community investment and social impact programs, we suggest a few areas for new year’s reflection which might help bridge the investment-impact gap.

1: You can’t hit a target you can’t see. Many companies’ community investments fall short of desired outcomes (both social and business) because they lack a clarity of purpose. In too many organisations, community partners and/or programs represent causes that are chosen based on legacy thinking or ‘chairman’s choice’, and not through a careful design process which aligns them to strategy and purpose. If we want to maximise impact, we have to get crystal clear on the objectives of our investments and relentlessly measure our progress towards them.

2: Impact is an act of alignment, not of articulation. Australia has recently seen our first case of fines being levied for ‘greenwashing’ in financial services. In CI, there is similarly no shortage of bold claims being made by organisations about the amount they give or the number of people they reach through their community investments.

As we argue in our paper, some of the methodologies that underpin these claims are questionable at best, and downright deceptive at worst. Perhaps this is why, according to research by the US Bureau of Labour Statistics, “90% of CSR leaders say companies should spend more time acting on social justice issues through their own practices and programs rather than making bold statements”.

We use the term ‘give-flation’ to describe the relentless pursuit of larger reportable numbers. The truth is that impact comes through aligning your strategy, with your investments, with your execution and with your measurement; not through reporting ever-larger contributions.

3: Customers are thirsty for authentic community investment, and your social impact is a valuable story worth telling. About 40% of Gen Y and 50% of Gen X consumers are enrolled in a monthly giving program; in a recent global survey, 66% of all respondents and 75% of millennial respondents say they consider sustainability when making a purchase; and up to 80% of young US adults say they are likely to base purchases on a brand’s mission or purpose. Whilst there does seem to be some tendency for surveys like those quoted to overstate the influence of ESG, social impact and sustainability-related factors on consumer decision-making, data do suggest that the demand for companies to be more pro-social is real.

Given this growing demand for authentic impact, companies who are doing genuinely great work with their CI (and there are many) should find compelling, inspiring and authentic ways to tell the story.

As we return to work in 2024, the stars are aligning to put more focus than ever on an organisation’s?social impact. That will be in large part viewed through the lens of ESG – and I would suggest this presents a real opportunity for corporate CI to be integrated into the ‘S’ part of that agenda in a visible, powerful way. Driving that agenda could be a valuable focus for the year ahead.

The views expressed in this article are the views of the author, not Ernst & Young. This article provides general information, does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information.?Liability limited by a scheme approved under Professional Standards Legislation.