Holiday Reading, part 1 - Responsible & Philanthropic?

Apologies for the long delay between posts. I’ll address in more detail the reasons behind the lag in an upcoming post. Let me start with a post I drafted about three weeks ago.

If you haven’t already read it and passed along to your fellow devo peers, pick up a copy of the Harvard Business Review’s current issue. The lead story in the December issue, by Michael Porter and Mark Kramer, is indeed a strategy manifesto about corporate social responsibility (CSR). If you are too frugal to buy the magazine, try the corresponding HBR podcast (HBR IdeaCast #22 featuring Mark Kramer available via iTunes) which will give you the snapshot in a nutshell, but not the depth.

Here’s the Cliff Notes edition: companies are not using CSR strategically. Most companies back into CSR in reaction mode when under attack from the outside (think environment groups and oil companies). The authors suggest that companies should use it more strategically, integrate the activity into the company’s infrastructure and it will help the bottom line. Of course, the authors provide a multi-step plan for reviewing a company’s current CSR and the roadmap for improvement. My first reaction to the whole article is: Is anyone in the halls of corporate America is listening?

I’ve followed CSR thinking and writings along with the rest of the fundraising fraternity for a while (most notably via Stanford’s Social Innovation Review, but recently CSR has picked up steam. At least, PR steam. The cynic in me rolls my eyes and says: trendy and convenient way for corporations to punt on issues that matter to a community or society more broadly. One of the opening stats is a doozy though, “Of the 250 largest multinational corporations, 64 % published CSR reports in 2005.” I can’t tell if I should be impressed or insulted. When our economy is powered by small- (mostly) and mid-sized companies and only 160 mutlizillion dollar companies have bothered to proactively tell the public about their work, it’s fair to land on the insulted side. I say this just as a citizen of this world, my fundraising orientation aside.

In reality, there is some good meat to chew on in the Porter/Kramer work and research, but one item in particular that caught my eye was the challenge that companies should prioritize social issues. I can’t help wonder how much easier corporate fundraising would be if this suggestion was addressed. Clearly it would make a fundraiser’s job easier: go here for X issue and there for Y cause. This aside, from a big picture stand point, how is it that corporate executives don’t see this as smart business? My gut says so little money is actually moving out of most companies philanthropically that it is fair to reason it doesn't merit their attention. This is the deadly corporate sin. Because once crisis hits, it’s too late to spin the last $2,500 gift to the Nature Conservancy’s Gala as CSR.

On the flip side, I see a major flaw in their theory. The authors argue that corporations should use their supply chain and operations as a leverage point to get suppliers to change how they address societal issues. (One example talks about drip irrigation and how Nestle can force supplier farms to change their farming methods to lessen the wasteful impact on the global water supply). Maybe those multizillion dollar companies have the power to do this (and they should!), but this goes back to my small- and mid-sized companies point. Most companies don’t have the type of buying power or influence capital to affect that kind of change upon their business partners. I suppose we have to start at the top and work our way down, but this left a fairly large question in my mind. This quickly leads one to the much larger, philosophical question that puts this whole CSR concept on shaky ground: should business help solve society’s woes or must society continue to push business to play a larger part in society? Now there’s a question for the ages.

All in all, the fact that HBR actually ran an article on CSR and that the notable subscriber base needs more education and thought-provocation on the issue, I’d call it a good thing for us money beggars.