Recent YouGov research commissioned by The Social Investment Consultancy has revealed that an overwhelming 91% of senior corporate leaders believe businesses can be just as effective, if not better, at creating social change than charities.
Although the scale of this shift may appear surprising, it fits with a 21st century economy characterised by new models of social enterprise, bottom of the pyramid product innovation, and increasing overlap between sectors.
The charity sector's fear is that in this new environment, their resources will be cut and their expertise ignored by businesses emboldened to 'go it alone' in creating social change. In the same poll, senior charity leaders were twice as likely as business leaders to believe that donations to charity - rather than leveraging core business strengths - were the best way for businesses to effect change.
The truth is that businesses ultimately contribute only a modest amount to the charity sector in purely cash terms - corporate giving currently represents less than 5% of all private philanthropy in the UK. What the world has to gain from businesses pursuing social innovation through the use of their products, expertise, brand, staff and research thus is much greater than what the world would lose from businesses reducing their donations.
That said, very few businesses have the critical expertise and understanding of social issues that charities and governments live and breathe. As Michael Rosen rightly argues in his response to the survey results, businesses may be overestimating their ability to facilitate social change while underestimating the capabilities of the charity sector. Even where businesses possess unique talents that could make a greater impact if leveraged optimally, businesses will fail to achieve change if they are not working with the public and third sector organisations who are the experienced experts with the relationships and reach into the communities they want to support. Consequently, they are critical partners in any business social initiatives.
The stock-taking of current attitudes revealed in the poll in fact presents an opportunity for charities to think about how they can present their expertise to businesses more effectively, and what building more satisfying corporate partnerships could look like for their own work.
Chris Ashworth, Head of Corporate Partnerships at Oxfam, offers a picture of what this looks like at their organisation. He states,
"The key to our most successful corporate partnerships has been a commitment to collaboration from the outset. It isn't right to say that commercial partners should move away from contributing financially, as in many circumstances it is fundamentally the right thing to allow charities and NGO's to determine the intervention they have the expertise in. It is however absolutely right that corporate partners should complement this approach by determining what assets and resources they have that can achieve a common goal. Whether this is human resources and expertise, hardware, logistics, infrastructure, information or access to market, all have their place in a holistic and long term partnership strategy. This type of collaboration should lend itself to measuring impact rather than just contribution. It is the outcome that matters most."
Examples of high-impact, cross-sector partnerships are growing. MTV has linked up with Pepfar, Unicef and the Kenyan government to use its brand and expertise in communicating with young people to jointly develop a widely popular television series about young Kenyans confronting the outcomes of high-risk behaviour that is changing attitudes and practices. Microsoft has partnered with the Charity Technology Trust in the UK to provide local charities and disadvantaged communities with access to bespoke technology that is helping transform their work and improve outcomes.
Businesses are energised to move beyond simply giving money and to make social impact part of what they create as an organisation. Research indicates they are likely to move further in this direction, as increasing numbers of talented employees want to work for - and do business with - companies that have strong social values. 58% of graduating students in a recent study stated they would accept a 15% paycut to work for an organisation they felt had values that matched their own, while 72% of senior executives state that volunteerism and philanthropy are critical for recruiting younger qualified employees. The same percentage of executives say they are now looking primarily to give to causes that will allow their employees to volunteer.
Businesses will be moving their philanthropy further away from cash gifts and towards embedded skills or resource-based partnerships. While charities are already under cash pressure, this trend could be a massive opportunity for charities as, if they are able to effectively present themselves as consultants on projects and distributors for business assets, they are still likely to receive funding from businesses to help fuel these partnerships.
At The Social Investment Consultancy, we've developed an approach that helps businesses realise which of their assets could be leveraged for social change and align those talents with charities, government and business partners to create effective ways of doing so.
While businesses trying to 'go it alone' may not be the best thing for the world, joined up partnerships that move beyond cash donations to make the best use of each partners' unique skills and resources could well be the future of social innovation. It is an exciting time for businesses and charities to get creative about how they can work together.
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