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INSIGHTS BLOG

The latest insights on trends, tips, and idea generating support related to your corporate social investment or nonprofit performance road map to success.

Job Ads Referencing Company Support of Nonprofits Can Increase Recruitment

9/15/2019

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Written by Alina Dizik for Chicago Booth. Published June 11, 2018.

A company, if it clearly conveys during the recruiting process its intent to benefit society, can see lasting benefits, research finds. University of Chicago’s Daniel Hedblom, Queen’s University’s Brent R. Hickman, and List used data to track how advertising a company’s support of a nonprofit impacted recruiting and work quality.

To do this, they performed an experiment that doubled as a business venture, which involved launching a data-collection consulting company and hiring 170 part-time workers in 12 US cities. The initial job descriptions they posted were identical, but the researchers tweaked the job details in later emails. When people inquired about positions, they received an email saying the work would consist of either data entry or data entry to benefit underprivileged children. The researchers also varied pay rates, offering some applicants $15 an hour and others $11.

When hired, employees were assigned data-entry tasks that involved looking at Google Street View. Some were asked to tally the number of broken windows or potholes in each image, which produced data that was used in some cases to help identify safe areas near schools where administrators were trying to help students avoid gang violence, and in other cases to benefit Uber. (List is a consultant for Uber.)

Workers who expressed interest in a data-collection company, created as part of a study, were more likely to apply when the position’s social impact was advertised. 1

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Helping schoolkids involved a social impact—and had a big effect on recruiting. When that social mission was mentioned in emails, the company saw 26 percent more people interested in the job, comparable to the 33 percent bump the company saw when it offered $15 an hour. Advertising jobs that had a social mission improved the pool of applicants, with no additional, and potentially expensive, recruiting tactics required. “This generation of young workers is more compelled than previous generations to do social good,” List says.

People who accepted a job originally advertised as CSR-driven were also more effective at work. Employees in the CSR group were more productive, analyzing images in a shorter amount of time than other workers. And while all employees could work any number of hours over a 10-day period, those in the CSR group worked longer hours.

Both women and men were affected by corporate responsibility, but in different ways. Women were 40 percent more productive in accurately analyzing Google Street View images as a result of CSR and worked an hour more per day. Men produced higher-quality results but did not increase the number of images that they analyzed. “Together, these insights suggest that CSR draws out higher output from women and higher quality from men,” the researchers write. “CSR should not be viewed as a necessary distraction from a profit motive, but rather as an important part of profit maximization similar to other non-pecuniary incentives.” Customers and employees, List assures, will still view CSR as authentic, even if it is recognized to boost profits.  

While the results suggest that CSR can have strong, positive effects, List recommends companies keep the findings on moral licensing in mind and monitor employee behavior. He notes that because so much behavior is driven subconsciously, simply making employees aware of the tendency to couple good actions with bad could counteract the bias.

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WORKS CITED
  1. Lea Cassar and Stephan Meier, “Intentions for Doing Good Matter for Doing Well: The (Negative) Signaling Value of Prosocial Incentives,” Working paper, January 2018.
  2. Daniel Hedblom, Brent R. Hickman, and John A. List, “Toward an Understanding of Corporate Social Responsibility: Theory and Field Experimental Evidence,” Working paper, March 2017.
  3. John A. List and Fatemeh Momeni, “When Corporate Social Responsibility Backfires: Theory and Evidence from a Natural Field Experiment,” Working paper, December 2017.
  4. Kai Chi Yam, Anthony C. Klotz, Wei He, and Scott J. Reynolds, “From Good Soldiers to Psychologically Entitled: Examining When and Why Citizenship Behavior Leads to Deviance,” Academy of Management Journal, February 2017.

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Measuring your motivations to contribute to the community and charities

2/20/2019

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Motivations matter. They are what drives a company’s Corporate Community Investment. The LBG Framework enables community activities to be classified according to three categories of motivation.
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This analysis provides an indication of the strategic nature of the community program, shows the degree to which it is aligned with wider business goals and helps companies understand the extent to which they are driving their contributions OR are being driven by external demands and circumstances.
 
The three categories of motivation identified in the LBG Framework are:
  • Charitable gifts
  • Community investment
  • Commercial initiatives in the community
 
CHARITABLE GIFTS  
A general response to a charity request for funds
 
Charitable gifts tend to be reactive in that they respond to appeals for help either directly from charities or through requests from employees (including matched funding or payroll giving) or in response to short-term or one-off events.
 
They tend to be ad hoc or one-off contributions, made because it’s ‘the right thing to do’, not because of any strategic aim or anticipated return to the company. Some might refer to this as traditional philanthropy or grantmaking.
 
COMMUNITY INVESTMENT
Targeted investment, long term partnership, major commitment of resources
 
Community investments tend to be more proactive and strategic than charitable gifts. They can center on a smaller number of larger-scale, longer-term projects and are often run as a partnership with, rather than a donation to, a community organization.
 
These projects address the social issue(s) that the company has identified as being relevant to both the company and the community in which it operates. They will often be: linked to a wider community strategy; be measured; and be expected to help protect the long-term corporate interests and reputation of the business.
 
COMMERCIAL INTIATIVES
Primary purpose PR/ marketing, business development, or promotion for competitive advantage
 
Commercial initiatives in the community are business related activities, usually undertaken by departments outside the community function (e.g. marketing, R&D), to support the success of the company and promote its brand and other policies, that also deliver community benefit.
 
The most common example of this is cause-related marketing. These are primarily marketing campaigns but involve a contribution from the company to a charitable cause. 
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How can you become an Impact Business?

12/15/2018

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​Written by Julia M. Profeta Johansson for the Twenty Thirty Blog: 7 Ways to Rethink Your Business through an impact lens.

There are three big questions that you can ask yourself to kick-start the process to become an Impact Business:

  1. Is my business harmful?
  2. Is my product/service needed by society?
  3. Does my business somehow relate to the Sustainable Development Goals (SDGs)?

If your operation somehow already relates to one of the topics, the first step is to identify a specific target within that topic that you can intentionally improve through your business. The next step is to create a strategy with defined indicators, so you can measure your progress towards that target.

Please note – simply working in an industry related to these topics does not guarantee that you are generating positive social/environmental impact. Unfortunately, this is something that we see happening more and more: people claiming to be impact businesses just because the business is in education or healthcare, for instance. We saw a lot of “green washing” back in the 2000s, when the topic of environmental sustainability became trendy. Now, we are at risk of seeing more “social washing.” That’s why in my previous article I recommend starting slowly and not getting attached to labels. 

It can be a long way to really become an impact business, especially if you are not a start-up, but it can be done. And you have to start somewhere.

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Going back to our process then, the following workflow may help to guide you through this thinking process of understanding where you are now and what are the first steps you can take.

  1. Based on my skills and knowledge, can I reinvent my company thinking about the innovations needed for a brighter future?
  2. Meanwhile, how can the harm be minimized? Companies that aren’t beneficial for the world need to cease their harmful operations. There is a lot of potential to redirect the development path of a company using most of the same resources for other purposes.
  3. Based on my skills and knowledge, can I reinvent my company by thinking about the innovations needed for a brighter future?
  4. Is there anything I could start doing to help reaching the SDGs?
  5. If my operation/core business somehow relates to the SDGs, which target(s) could I include in my strategy?
  6. Do certain social/environmental problems occur in the surroundings of my company? Through my business, can I help solve them?
  7. What is my power in the value chain? Can I help and shape standards, in order to promote more social/environmental impact?
  8. Can I better choose my clients through a positive screening?  For instance, in the financial industry, as a wholesale bank, what can I offer or ask from my clients? If my clients promote some kind of social impact, could they have a better pricing on credit and other financial products? After all, more social impact normally results in less risk…There are already banks doing this.
  9. Could my product serve other markets/clients that would highly benefit from it?For example, if I am in the consumer goods sector, or education, or healthcare, could I make my product and/or services accessible to less obvious clients? Is there space for some kind of cross-subsidy?
  10. Can I improve quality and/or access?  Is my product fair enough for the quality I offer? Or could it be better by refocusing on the beneficiary? Establish metrics to understand better whom you are serving and if there is room to refocus your strategy, like geographic reach, client profile, potential side effects generated…
  11. Can I partner with others in my industry to reach unreachable clients or solve issues that no one has enough resources to solve alone?
  12. Is there anything I could be doing to help reach the SDGs?
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After thinking about all these questions, there is a tool that can be helpful in framing the impact vision of the business and figuring out which KPIs, on an operational and impact level, will help move the business towards that vision.

This tool is the Theory of Change.

Theory of Change is a framework to define the impact vision of a business. It considers 3 different layers: inputs, outputs, and outcomes. Analyzing its inputs (products, services, etc.), it is possible to understand the outputs and design the desirable outcomes of the operation. Simply put, determine operational indicators in relation to what’s core in your operation (outputs) that in turn will lead to more in depth indicators, the outcomes, which should be the true impact generated, reflecting the impact vision of the business.
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The questions to ask when rethinking and repositioning a business, through the impact lens, are practically endless, but I hope this article has provided a starting point if you are interested in the topic.

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Written by

Julia M. Profeta Johansson is an impact investing and venture capital specialist based in Berlin, Germany. Julia was previously a partner at Vox Capital, the first impact investing fund manager in Brazil. Before that she also worked with Yunus Social Business, Rocket Internet, Itaú BBA, and Mundo InNova. She is more than happy to continue this conversation and help your business start this journey of more intentional impact.

Read more from Ms. Johansson on the TwentyThirty blog. 
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  • For Businesses
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