Why Corporations Invest in Corporate Social Responsibility

For our team, as we considered topics to explore in our second annual Social Impact survey, one question rose quickly to the top: Why are corporations motivated to invest in CSR? And, what are the key success factors and lessons learned from recent CSR efforts? 

Today, we’re releasing the findings of our survey of more than 200 corporate executives in large-sized companies with responsibility for philanthropic, social responsibility or community relations, conducted in partnership with KRC Research in October 2010.

Here’s the major takeaway: Having an impact on critical issues is the number one reason why corporations are investing in philanthropic or socially responsible activities.

• Other Motivating Factors for CSR: A second reason given for funding CSR is the opportunity to see an organization’s values in action. Interestingly, having an impact on critical issues (30%) outranked several more business-oriented motivations, such as building customer loyalty (15%), differentiating the company from competitors (6%) and engaging and retaining employees. The last finding suggests the need for companies to better understand the link between CSR and employee satisfaction, a topic we’ll explore later this month.
• Nonprofits Critical to CSR:  The news for nonprofits is very positive, with 8 in 10 executives saying they consider nonprofits valuable partners.  Nonprofits are seen as ideal partners because they make their CSR investment more effective, provide a critical foundation and infrastructure, contribute expertise and help engage consumers. 
• Senior Leadership Drives Success:  Nearly all executives reported that strong and vocal support from senior managers (94%) and well-defined objectives and outcomes (91%) are the most important ingredients in creating successful CSR programs.

What these findings highlight for our team is a shift in why CSR programs are undertaken.  Corporations are looking at community needs and asking how they can narrow and better focus their resources and expertise to foster genuine change on specific critical issues.  Given the urgent need for action in the U.S. on vital issues such as education, health and wellness, economic development and environmental sustainability, that’s encouraging news. 

We’ve highlighted key findings and our perspective on the strategic implications they present for corporations and nonprofits in a two-page PDF that you can download.  You can also view a detailed PowerPoint.  Let us know what findings you find interesting and if they prompt questions you’d like us to explore on these pages.

WS Social Impact CSR Five Facts