Do more with community investment

By Kate McCaffery | November 13, 2008 | Last updated on November 13, 2008
5 min read

(November 2008) Businesses are starting to be measured on the basis of their community involvement — employee engagement efforts hinge on it, consumer perceptions are changed by it and special interest groups like Imagine Canada are beginning to quantify it in an effort to help businesses assess their contribution practices.

The benefits of social engagement and charitable support are perhaps most obvious in human resources and employee retention efforts; nearly half of the Canadian population volunteers and brings the same values with them to the workplace, but the reality is many companies find it a challenge to measure the impact they have.

A study of 1,500 Canadian businesses is outlined in an Imagine Canada report entitled Corporate Community Investment Practices, Motivations & Challenges: Findings from the Canada Survey of Business Contributions to Community. The report itself focuses on the results from 93 of Canada’s largest corporations with revenues over $25 million.

Many in the survey say there are too many charities trying to solicit for the same cause — that managing the increasing requests can be difficult, even posing reputational risk at times when the demand for support outweighs the ability to help, forcing company leaders to refuse aid.

Dr. Michael Hall, vice-president of research at Imagine Canada, says this is in fact the number one challenge businesses face in charitable giving. “The request for support in the community, it’s unrelenting. It’s not that charities are scrambling for support for no particular reason; they’ve been freighted with a lot of responsibility and we haven’t — as a country — figured out how to support them,” he says. “They’re coming to us as citizens and they’re coming to us as businesses to try and support their work.”

Despite this stress, more than 71% of the companies surveyed agree that charities and non-profit organizations generally improve the quality of life in Canada, 79% strongly agree that businesses and non-profit organizations can mutually benefit from collaborative relationships and almost the same number agree that they would donate to charity, even if there were no financial benefits. The majority of those surveyed, 82%, report they also support different employee volunteer programs.

Interestingly, Imagine Canada says the attitudes of respondents were overwhelmingly positive — even more positive than the attitudes of the broader community and the general public. “Larger businesses recognize the value of collaborating with non-profits in a way that exceeds that of the larger business community,” says Hall. “They value these organizations, they think they’re important and they think there are opportunities to work together with them.”

On a smaller scale, too, advisors already know the benefits community engagement yields.

Hosein Ansary is a financial planner and head of the Ansary Financial Group in Montreal. Twice a year, he hosts nearly 1,500 people at a community barbecue to support a Saturday language school that teaches Persian to children growing up in the Iranian community there.

“They all know it supports the school, so they all come. It’s been good for me. It gives you a nice place, a nice name, and you meet people,” he says. What’s more, “you’re taking some of the money that you make from the community and you’re putting it back into the community. That circle should continue — there’s a snowball effect. That big circle just gets bigger and bigger. Every year, you need to spend more because you have more, there are more people coming to you and everybody is happy.”

On a larger-scale, First Calgary Savings and Manulife Financial are two of the companies presented as case studies in the Imagine Canada report.

A representative from First Calgary says it is important to articulate the business and community benefits when championing a social investment. The measurement programs in this case focus on tracking input from the company, and the community and business outputs that result.

“One key benefit of establishing measurement procedures for a community investment program is that it forces a company to think about what it hopes to accomplish, how long this will take and how the company will know it has succeeded,” say the report’s authors. “For First Calgary Savings, this process has resulted in greatly improved relationships with many of its community partners and to the identification of new opportunities for leveraging its brand.”

For the champions of would-be social investment programs, Dani DeBoice, manager of corporate citizenship at First Calgary, says implementing a measurement program can reap great dividends. “Being able to provide certainty and demonstrate value creation made our work even more supported by the entire management team.”

Implementing such efforts, though, almost certainly won’t yield results overnight. Manulife Financial, perhaps one of the largest companies in the study, donated over $25 million to more than 600 organizations in 2007. Even with the company’s significant resources, it will take a three-year study to determine whether its efforts will yield a competitive advantage.

“We always knew this had value for the company,” says Sara Saso, director of community relations. “But we’re just proving it now.”

The Imagine report says the company’s measurement efforts “are one of the most extensive evaluations of the business benefits of employee volunteering ever conducted in Canada.” Among the findings, they say those who volunteered were three times more likely to stay with the company compared to those who did not.

Saso agrees that measuring the value of community investment programs helps to ensure their longevity. “In a difficult economic climate, corporate donations of time and money can be seen by some as a luxury rather than a necessity. What we see at Manulife is that these programs can reap huge rewards for the HR functions of a corporation, for example. Community relations professionals need to prove the value of the sector to those who demand accountability.”

Even without massive corporate resources, Imagine Canada’s authors say any company can adopt some of Manulife’s practices by collecting employee volunteer testimonials and charity testimonials to demonstrate program engagement, and by tracking program participation rates or the number of hours volunteered.

Hall also encourages businesses to be organized and strategic, to set objectives, and then “line up behind those objectives.” More, he says having a written policy available for charities that explains the company’s interests will help manage community demand.

“Get organized. It doesn’t take a lot to get organized. Frankly, charities don’t know who’s going to support them so they’re sending out solicitations — requests for support — furiously to anyone who will pick them up. If you can organize yourself and outline what causes you’re interested in, you can reduce the demand and also reduce the wasted efforts from charities that are spending a lot of time trying to find dollars to keep their doors open.”

For those interested in differentiating themselves, a significant opportunity exists outside of the large, well capitalized traditional charities that are usually the first to spring to mind.

Large corporations are spreading their charitable giving activities around, but the majority of assets and resources being donated are concentrated on only a few organizations. “There are opportunities here for businesses,” says Hall.

“Many businesses tell us that they’re looking for a unique niche or some way to distinguish themselves from the crowd. A lot of small charities are not on the radar screen for corporate Canada, but it’s those small charities that are leading the way in finding new causes and innovative solutions. The AIDS issue started off as a small charity issue. I would encourage businesses to look beyond the traditional causes and see what opportunities there might be.”

Filed by Kate McCaffery,


Kate McCaffery