Corporate Social

Initiatives:
What are the Challenges of
Doing Good?
Reporter: Angelica A. Magdaraog

Corporate Social Initiatives

Making a positive explicit social impact.
Corporations are not simply providing cash donations to
nonprofit organizations but are directly involved in, and
provide significant resources to, their community projects.
The nature of these initiatives reflects the growing outlook
among stakeholders that people need help solving their
problems, not just money. (Hess et al. 2002: 113)

Why Do Good ?

Increased sales and market share

Strengthened brand positioning
Enhanced corporate image and clout
Increased ability to attract, motivate, and retain
employees
Decreased operating costs
Increased appeal to investors and financial analysts

Corporate Social Initiatives:

Six Options for Doing Good

Cause Promotions
Provides funds, in-kind contributions, or
other organization resources to increase
awareness and concern about a social
cause OR to support fundraising,
participation, or volunteer recruitment

Cause Related Marketing

Commits to making a contribution
or donating a percentage of
revenues to a specific cause
based on product sales e.g.
donate 10% of the price of each
product sold

Social Marketing
Supports the development and/or
implementation of a behavior change
campaign e.g. anti smoking campaign
A corporation may develop and implement
a behavior change campaign on its own

Corporate
Philanthropy

Makes a direct contribution to a

charity or cause, most often in the
form of cash grant, donations,
and/or in-kind service

Corporate
Philanthropy

The most traditional of all corporate social

initiatives and for many decades was
approached in a responsive, even ad hoc
manner.
More corporations are now experiencing
pressures, both internally and externally, to
move to a more strategic approach,
choosing a focus and tying philanthropic
activities to the company's business goals
and objectives.

Community Volunteering
Supports and encourages employees, retail
partners, and/or franchise members to volunteer
their time to support local community organization
and causes
Volunteer activities may be organized by the
corporation, or employees may choose their own
activities and receive support from the company
through such means as paid time off and volunteer
database matching programs.

cially Responsible Business Practice

Adopts and conducts discretionary
business practices and
investments that support social
causes to improve community
wellbeing and protect the
environment e.g. community trade,
environmental friendly process

Safeco: Changing Values for

Generations to Come
Safeco has been protecting individuals and families with personal
insurance coverage since 1923.
Safeco is a Liberty Mutual Insurance company. Liberty Mutual
Insurance ranks on the Fortune 100 list of the largest U.S.
corporations.
In the aftermath of a 1996 wildfire that destroyed 19 homes and
17,000 acres near Bend, Oregon, vice president of public relations
for Safeco Insurance, called Bends fire marshal, Gary Marshall,
offering to contribute $40,000 toward the purchase of new
firefighting equipment but REJECTED THE OFFER.

A new piece of equipment might save one more home, but

to really save homes, individuals have to take personal
responsibility for their property before a fire. Gary
Marshall

Safeco: Changing Values for

Generations to Come
Instead of buying new equipment, Marshall wanted Safeco
to pay for a comprehensive public education program on
fire safety.
When they saw the various campaign models designed
by a local Bend marketing firm and ranging in price from
$50,000 to $150,000 they opted for the most expensive
one.

The FireFree program recommends

10 tips to protect your property:
1. Define your defensible space.
2. Reduce flammable vegetation, trees and brush.
3. Remove or prune trees.
4. Cut grass and weeds regularly.
5. Relocate wood piles and leftover building materials.
6. Keep your roof and yard clean.
7. Post directional signs and addresses.
8. Rate your roof.
9. Recycle yard debris and branches.
10.Be prepared if wildfire strikes.

Safeco funded the

FireFree
program in Oregon to
help
homeowners protect
against
wildfires. The
premise:

FireFree Program Today

The Central Oregon FireFree program is a successful
educational movement that has changed attitudes and
behaviors about wildfires over the last decade. Each year
thousands of residents participate in the spring and fall
recycling events, but more importantly, they are
protecting themselves and their neighborhoods from
devastating wildland fires.

WHAT ARE THE MAJOR CURRENT

CHALLENGES TO DOING GOOD?

Choosing a Social Issue

Selecting an Initiative to Address the Issue
Developing and Implementing Program Plans
Evaluation

Choosing a Social Issue

How does this support our business goals?

How big of a social problem is this?
Isnt the government or someone else handling this?
What will our stockholders think of our involvement in this issue?
Is this something our employees can get excited about?
Wont this encourage others involved in this cause to approach us (bug us) for
funds?
How do we know this isnt the cause du jour?
Will this cause backfire on us and create a scandal?
Is this something our competitors are involved in and own already?

Selecting an Initiative to
Address the Issue

How can we do this without distracting us from our core business?

How will this initiative give visibility for this company?
Do these programs really work? Who pays attention to these?
What if consumers perceive the amount of the sale that actually goes
to the cause is too small?
Have you calculated the productivity cost for giving our employees
time off for volunteering?
Giving visibility, especially shelf space in our stores for this cause,
doesnt pencil out. Shouldnt we just write a check or give a grant?

Developing and Implementing

Program Plans

How can we do this when money is needed for increased performance?

What do we say to stockholders who see this as money that belongs to them?
Why is our department being asked to fund this?
Will having partners bog down the decision-making process and therefore
take more of our staff time?
Will we be doing as much good for the cause as we spend?
Isnt this just brand advertising in disguise?
What is our exit strategy?
How do we keep from looking hypocritical?

Evaluation
By contrast, the track record for measuring return on
investments in Corporate Social Initiatives is very young
with little historic data and expertise.

THANK YOU!