How to Build a Strong Business Case for Philanthropy

To be doing good deeds is man’s most glorious task.

These are the words of Socrates, the Greek philosopher credited as one of the fathers of Western Philosophy.

Indeed the best investment of time, effort, and resources in a man’s life is doing good for others. Kindness and generosity always enrich your life. Looking back on them brings a sense of fulfillment. You’ll never regret them.

This being said I don’t think that the decision to give, doing good, and philanthropy, in general, needs any reason or justification.  And from this point of view, philanthropy does not need a business case. It is as it’s always been and will always be: a part of our human nature.

Despite that, however, several businesses look for ways to justify their social efforts and their giving. Not so much in SMEs where the business owner’s motivation is enough of a reason. Larger companies are more complex and chaotic. They have more stakeholders to consider, especially shareholders, which requires justification.

And I understand that – businesses, by nature, are designed with profit in mind, not social purpose. So from a business point of view, looking for a business case is justified. I justify corporate philanthropy and encourage business owners to engage in social issues because of its potential benefits. Social engagement can positively impact both businesses and society.

If your business needs to understand the benefits of corporate philanthropy, here’s a quick summary. Social responsibility and engagement address key business challenges. These solutions are essential for any business.

Here’s what I mean:

Too many costs eating into your profits?

Many businesses suffer from rising costs the sources of which could be anywhere along the value chain. Adopting a sustainability philosophy can help you cut those costs tremendously. An effort or even an investment into becoming a greener business could impact your bottom line more than you can imagine.

This is more obvious in manufacturing and retail businesses than it is in the service sector, but it is equally true for every organisation. This is only part of the equation, however. Proactive social engagement can take your business to the next level. Adding a social element could, for example, help reduce employee salary costs.

Studies show that more employees would accept lower-paying jobs if they offer meaning and fulfillment. Many value the chance to make a difference over higher monetary rewards. And as you know employees are every business’ highest expense. Not to mention that by simply introducing social engagement you will improve retention thus saving an awful lot of money.  Just to give you an idea of how much: according to a report by ERE Media, the cost of replacing an employee at any level costs your business 30%-50% of their annual salary.

Experiencing growth stagnation?

As a business consultant, I meet and work with business professionals from an array of industries and sectors all the time. Many directors and business owners feel they’ve plateaued at a certain profit level. They struggle to break through the profit glass ceiling. The truth is that a lot of effort and a lot of work is being thrown into maintaining the level that’s been achieved. But what people don‘t realise is that there’s a level of comfort and complacency that comes with that.

This is how they discovered that Kenya presents an untapped opportunity for their business and thus entered the Kenyan market. Vodafone is just one example, however. The list of products and services inspired by a need in the community or out of environmental concern is longer than you think. That being said, the community and environment are two great places to look for new avenues for growth.

No relationship with your customers resulting in poor customer loyalty?

Another quite common complaint of business owners is that they constantly need to look for new business which consumes time, effort, and consequently money. There’s nothing more valuable than customer loyalty that results in repetitive business which not only decreases your spending on business development but also gives you some security.  I’ve said it before but the reality is that some of the most profitable and thus successful businesses out there are those whose brands ignite people’s hearts.

Be it Patagonia and environmental protection or Apple and what is perceived as a cool lifestyle. These companies have passionate followers who identify themselves with what the company stands for. In today’s world, where Millennials are growing as a proportion of the general public, what has become an increasingly important value is the concern for the community. People care about communities, the environment, and disadvantaged groups and they want to identify themselves with and give their money to organisations that share the same values and spirit.

Just so you understand the scale of this growing trend, a Cone Communications study on Millennials and CSR from 2015 has shown that 9-in-10 Millennials would switch brands to one associated with a cause. Being able to respond to these new customer values is essential to your ability to engage with your customers and create a strong relationship with them. Thus creating loyalty and ensuring repetitive business.

If you want to make a difference and thus would like to integrate a social element into your business, what I would advise is that you look into the specific challenges your business is facing and see how these can be solved through social engagement. Regardless of whether your organisation is large or small, finding your business case for doing good is always valuable. It gives you extra motivation to overcome challenges in building your engagement program. It boosts your team’s dedication to the cause. Ultimately, it helps you achieve more than you would on your own.