Business Sharing Value

Social Enterprise by

“Traditional charity and aid are never going to solve the problems of poverty” Jacqueline Novogratz, Founder of Acumen

Corporate Social Responsibility (CSR) is a term that became popular in the 1960’s, when being used to describe the moral intentions and activities in business.  However, it’s only really been a common part of every day business in the last 10 to 15 years – the relevant ISO standard being introduced as recently as 2010.

When most people think of CSR, they think of company donations or staff volunteering. CSR was (and still is for many companies) seen as a ‘nice to do’ part of everyday work. Something that generally has an impact on the bottom line but is good for staff morale and can help to boost the company’s public profile.

This isn’t the case for all companies though and many now view CSR through a more strategic lens. Instead of simply donating or volunteering, they are designing programs that have brand relevance as well as social impact within the company’s geography.

This is commonly referred to as ‘creating shared value’ and works on the principle that the competitiveness of a company and the health of the communities around it are mutually dependent. So when rolling out a program under a shared value principle, by definition a business advantage can be achieved as a bi product of social improvement.

Good for people and good for business!

For the past 6 months I have been working with a company on a social program in Malaysia which, though in it’s infancy, clearly demonstrates how business and nonprofit working together can be put to good effect. The collaboration between the two, means there are more resources & skills available, the time required to roll out the program is reduced and the overall impact increased.

The Horlick’s School Journey

We have a growing number of social issues in the world. Almost half the world — over 3 billion people — live on less than $2.50 a day. Nearly a billion people entered the 21st century unable to read a book or sign their names and around 400 million have no access to safe water. If that’s not enough, the continuing trouble in the Middle East has seen refugee numbers overtake those of the 2nd World War.

These kind of statistics make you want to bury your head in the sand, but thankfully there are numerous nonprofit organizations out there, working tirelessly to make a difference.

But is that really enough?

Frankly speaking, not by a long shot. The nonprofit sector is always in need of more funding but even with the cash to do more, the continual public pressure on efficiency and low operational expenditure makes it is very challenging for a charity to be innovative in the way a business is.

The great thing about shared value is it does away with these obstacles. The close alignment of corporate and nonprofit means the charity can leverage additional skills, they would other wise not have access to and with the company able to recognize a business gain, the money can keep coming and programs continue to flourish.

Of course creating shared value on it’s own is not the answer and there is still a lot more that can be done: additional government support, skills volunteering, and specialized training all act as a catalyst for social innovation. But the more that business is able to recognize the benefit as appose to the cost in social, the bigger role the corporate sector will play, and with large companies actively involved in solving social issues, far greater progress can be made.