Corporate social responsibility (often referred to as the shortened ‘CSR’) is a practice followed by many companies where they work to improve society in some form. CSR is often seen in terms of philanthropy, environmental leadership, ethical labor practices, and economic responsibility.
If you’re wondering how CSR impacts businesses—particularly the businesses that enact these practices in the first place—the advantages are expansive. These include:
- Offering unique marketing opportunities
- Increasing employee engagement
- Attracting new talent to your team
- Improving the company’s internal culture
In this complete CSR guide for businesses, we’ll explore the top benefits of corporate social responsibility to the businesses themselves. Let’s begin!
1. Offering unique marketing opportunities
Cause marketing (or cause-related marketing) is a form of CSR in which a business supports a charitable cause while receiving strategic marketing benefits from the relationship. These types of CSR campaigns often involve a company offering to give a certain amount of money to a nonprofit organization in response to increased sales results.
One example of a successful cause marketing campaign is Lyft’s partnership with organizations like Bread of Life, United Way, and the National Council on Aging. During the COVID-19 pandemic, Lyft offered free rides to essential workers and vulnerable populations through an initiative called LyftUp. With this model in place, Lyft has elevated its brand reputation as one that cares about the underserved in its communities, thus driving popularity and sales.
When done well, cause marketing results in consumers being willing to pay a higher price, switch brand loyalties, or increase quantities of their purchases due to it benefiting a good cause. Not only will this benefit a good cause, but it also means more customers and more dollars toward your bottom line.
2. Increasing employee engagement
The fact is, people want to work for companies that they feel good about contributing to. When an individual knows that their efforts at a business help drive social good, they’ll be driven to produce elevated results in their roles. And for that reason, there’s a significant positive correlation between employee engagement and corporate giving.
In fact, research shows that more than 54% of employees who are proud of their company’s contributions to society report being fully engaged in their job. Pride in the company, along with belief in senior leadership, are some of the most essential drivers of employee engagement levels—and luckily, both components see benefits from social responsibility as well.
When employees are particularly engaged, the company will also see high levels of productivity, increased retention rates, and more.
3. Attracting new talent to your team
Just like effective CSR efforts drive existing employees to want to do more in their roles at your company, the same efforts can also attract new employees to the team.
In fact, this research-backed resource from re: Charity shares that 71% of survey participants said it’s very important to work at a company that partakes in philanthropy, while 77% stated a sense of purpose as part of the reason they selected their current employer. 55% would even take a pay cut to work for a socially responsible company!
As a result, many HR representatives are prioritizing corporate social responsibility in their recruiting efforts and within conversations with prospective candidates. Individuals looking to join a company that participates in CSR will be drawn to your business, and you’ll have a competitive advantage against other potential employers.
4. Improving the company’s internal culture
Companies partaking in CSR also tend to have more positive internal cultures, which, of course, helps drive increased levels of engagement and retention. Company culture is more of an abstract concept and often incorporates the attitudes and behaviors of the business, its leadership, and its employees altogether.
Let’s take a look at a few examples to see how this works. Here are three types of CSR initiatives that can bring about a positive business culture:
- Group volunteer opportunities. Picture this—your company is looking for a fun out-of-office team-building activity to boost morale and get staff members better acquainted with one another. You reach out to a local food pantry and decide to organize a company-wide volunteer excursion. Employees come out to participate one Saturday afternoon and get to spend time with their colleagues in an informal setting which helps strengthen relationships while enabling your team to make a positive impact on your community.
- Annual giving campaigns. Imagine that, once a year, your company hosts an annual employee giving campaign benefitting your neighborhood animal shelter. Employees are encouraged to bring in pet supplies and cash donations, and you turn it into a competition between departments. Whichever team collects the most for the shelter receives a prize, while a sense of friendly competition brings the business as a whole closer together.
- Fundraising events. Let’s say a nonprofit is hosting a 5K event to raise money for their medical research. Your company decides to get involved, forming a team of employee team members willing to collect pledges and participate in the final event. Staff participants get to know each other throughout the fundraising process. Individuals share tips and tricks to drive total donations and help reach a company-wide goal. You participate in the event and, after the walk, celebrate your success with a pizza party!
Utilizing philanthropic initiatives as a way to build a positive company culture is a common practice for many businesses. But remember, the most successful efforts involve hands-on involvement by leadership as well.
When employees see their management and company leaders participating, they’ll be more inclined to do so themselves. And when individual team members get involved, the company’s culture is more likely to benefit.
Corporate social responsibility is often framed as a win-win-win situation because companies, nonprofits, and the greater community each benefit greatly from its existence. As you consider how CSR impacts businesses like yours, think about all the good you can do in the world as well!
Ready to learn more about the benefits of corporate social responsibility and philanthropy to businesses like yours? Check out these other guides: