Companies that obtain real value from their social impact programs have a clear value plan, a strong metrics plan, and a thorough due diligence methodology.
Many top corporations are increasing their use of social impact programs within their organizations to help shape brand image, drive marketing programs, engage employees, and attract top talent. According to a study by the Governance and Accountability Institute, while just 20 percent of S&P 500 companies published a Corporate Social Responsibility report in 2011, 86 percent reported doing so in 2018[1].
Companies are trying a variety of strategies as they learn what creates the most value for their unique situation. Some companies are expanding their existing community engagement and giving programming by establishing permanent structures such as corporate foundations or internal social enterprises. Some are re-evaluating their entire approach to giving, starting from scratch to develop a strategic plan that aligns business goals with their activities for creating social impact. In other cases, companies are implementing the idea of “purpose” into the core of their businesses, integrating social impact throughout their strategies and business models.
Regardless of the approach, the most successful and impactful corporate teams have implemented three key process elements: Value Creation, Impact Measurement, and Due Diligence.
Why are these elements important to the success of every social impact program? Below, we share what top corporate impact programs have in common:
Value Creation. A corporate social impact program is only sustainable and scalable when it generates real value and supports the company’s strategic objectives. Social impact programs create value for companies through marketing (brand, product, message), human capital (attraction, retention, engagement), and strategy (opportunities, removing obstacles). A value plan helps determine financial and other direct tangible value. Ideally, this plan is designed with input from multiple internal stakeholders, such as marketing, human resources, finance, and executive leadership.
An effective value plan includes specific, testable activities that have the potential to drive measurable value for the company. The activities that yield the most positive test results are then piloted on a larger scale alongside the impact being created. After a successful pilot, the company can integrate the program as a permanent feature throughout the organization, just as it would with any other value driver.
Impact Measurement and Metrics. Metrics in a sustainable corporate model for social impact serve at least three key purposes: they gauge the impact generated by the investment (what happened?), serve as input to compare versus other social impact programs (was it effective?), and provide learning and data to guide future choices about deployment of resources (what happens next?). Without these measurements, a team cannot make an objective assessment of how well the program is functioning and whether changes need to be made.
To be optimally useful, companies should create and implement a metrics plan that is built for all three of these purposes. The process of creating this plan begins by identifying consensus among any program team, internal value stakeholders, financial/management observers, and the benefitting partners and their stakeholders.
Due Diligence. Methodology-driven due diligence provides a company with the information needed to ensure its investments are responsible, values-aligned, and effective. A well designed due diligence process should include review and documentation of each partner organization’s social impact model, financial stability and performance, leadership, and affiliations.
Effective due diligence routines include both qualitative and quantitative components. Qualitative data is particularly useful in assessing mission and alignment with the company’s core values. It also gauges the depth of impact (e.g. outcomes vs. outputs), and it can uncover any concerns or unintended negative impacts created by partner organizations. Quantitative data helps ascertain the ability of the organization to produce results within its cause area efficiently without sacrificing mission. It also helps assess the long-term sustainability of the organization, which is important if your company is looking to scale a partner organization’s impact to new communities and/or regions.
Companies today are frequently challenged in effectively implementing one or all of these three critical social impact program elements, even as they recognize their importance. Overcoming these challenges will make your company more effective in generating social impact, and ultimately will increase the performance of your programs for stakeholders (shareholders, management, employees, customers, etc.).
If your company faces these challenges, contact us. We can share tools that will help you overcome them.
To learn more about creating a value plan, implementing a metrics plan, standardizing social impact due diligence, or maximizing the results of your social impact programs, reach out to us at info@goodreturns.org.
[1] https://www.ga-institute.com/press-releases/article/flash-report-86-of-sp-500-indexR-companies-publish-sustainability-responsibility-reports-in-20.html