The strength of Corporate Social Responsibility (CSR)

The role of Corporate Social Responsibility (CSR) in helping NGOs and voluntary sectors to flourish should not be underestimated.

View from the Snowline

The other day I was sitting on a train chatting about CSR. I guess for the purposes of this conversation, we were referring to all private sector social initiatives as CSR; it’s a shorthand way of separating public sector, and voluntary sector social initiatives out from statutory or trust/foundation funded initiatives.

Why would we separate them out? Fortunately, in UK at least, CSR initiatives are voluntary and shaped by the CSR strategy of the company involved.

Why is this significant? Well, it gives them an important edge; the ability to be creative, and the ability to innovate. Essentially, it is their money and they can use it anyway they like. They are not accountable to taxpayers or trustees.

The current model for funding social initiatives kills creative problem solving and innovation to a large degree. This is in part at least to funding cycles and performance metrics. The classic pathway to delivering a project takes place over a fairly standard timescale; three years usually.

Firstly, an idea for a project to solve a particular social issue is launched, funding applications are submitted, and this process can take anything up to a year, from application to funding arriving.

Typically, once the funding is in place, it can take anything up to a year (or even longer in some cases) to put partnerships in place, hire and train staff, and set up the infrastructure for a project, particularly if capital infrastructure is involved.

This is particularly the case in countries that have monsoon seasons, or strict agricultural seasons, where project activity is curtailed often for months at a time. It is quite usual for sizeable projects, that it would be only during year 2 that the project starts to deliver outcomes.

It is now 3 years since the original idea was launched. Often that problem has moved on in three years, and adjustments would be advisable. It could make sense to remodel the project to re-align with the social problem.

Now the real dilemma starts. If you adapt the delivery, then unless you manage to agree that movement with the donor in advance, you are technically in breach of contract.

Logical frameworks would need to be rewritten, new outcomes agreed, and performance indicators set up. A time-consuming process.

In some areas such as human trafficking, traffickers are very adaptable, flexible, and smart. They constantly adapt to combat anti-trafficking measures.

They are classic innovators; if they are not, they end up in prison. This is just one example, there are many more.

By the time you agree (if the funders are at all willing), you will likely be into the last year of funding and will be preparing to dismantle the project or preparing for final impact evaluations.

If you then come up with a new or innovative idea for the next funding round (based on the previous three years’ experience), then it will have no track record as it is a new idea.

This presents a risk to potential funders, as they would usually prefer something more than “a good idea” to put significant amounts of money into.

The irony is that donors often like the idea of innovation but would prefer something a little more predictable that presents a little less risk. Of course, this is not universally true, but it is common enough.

This is the beauty of private sector investment in social projects. Private sector donors, as part of CSR initiatives are not bound by funding cycles, or stodgy performance metrics.

A corporate donor could feasibly look at a behavioural change project, apply reasonable timescales for outcome and output milestones, and commit to a longer-term investment (subject to contractual renewals related to performance).

They could agree to renegotiate targets if the social issue changed too fast; they could agree to support innovation and creative problem-solving, and they could tie both staff and customers into helping develop creative solutions to problems, without worrying about project drift.

In my personal experience with a corporate donor. They partnered my employer in a high-trust manner. They were happy to have conversations about difficulties, and they were completely comfortable if the goalposts suddenly moved.

They trusted that we would do the most good we could with their investment, as long as we kept them informed. They would support initiatives to work on social issues that were aligned with their values and philosophy. In short, they invested in people and trusted them. A perfect arrangement.

CSR simply gives NGOs and voluntary sector organisations the best chance of making value-for-money impact in their area of work. That is the strength of private sector funding.

Image courtesy of author.