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
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.
What happens when your nonprofit is engulfed in scandal? Or what if you have a board member or highly visible donor who’s reputation is significantly on the rocks? As always, being prepared for crisis and scandal is always the best policy. Every nonprofit leader should know when and how to act in times of trouble. Managing these crises is especially important when it comes to fundraising and mission advancement.
Fundraising is all about managing relationships. In times of controversy or not, nonprofit executives should be carefully navigating through their relationships with stakeholders. When there is a crisis, the trust they’ve built along the way will have the biggest impact on successfully wading through the times of murky waters. In general, it is good to have open, honest communication with all of your stakeholders so a crisis doesn’t tip you over the edge but makes everyone come out stronger.
If news breaks that a major donor was engulfed in scandal, a nonprofit executive should remain calm and act swiftly with integrity. A solution and plan of action to mitigate the crisis should be immediately ready to go. This includes knowing who to pull into a room for immediate strategy, who to contact first, and who are the best people to carry out the plan. Communicating clearly, concisely is paramount.
Your main strategy will need to be disassociating your mission with the person experiencing the scandal. Your core group of loyal stakeholders should continue to feel that you are an organization they can trust. Continue to align their passions and initial interest in the work of your organization with the impact and mission you make in the world. The scandal could, in effect, give you an opportunity to engage your stakeholders in a closer, meaningful way that ignites even more respect and loyalty than before.
Should your company publish a community philanthropy investment / Corporate Social Responsibility annual report?
What do Exxon Mobile, Toyota, Coca Cola Berkshire Hathaway, and Apple all have in common? In addition to being some of the most successful companies in world history, they are all also leaders in Corporate Social Responsibility. Entire teams are deployed to build strategic implementation plans to invest in the communities they serve. They develop their community investment plans and corporate philanthropy alongside the highest levels of leadership and produce annual reports to measure, monitor, and report on their social impacts just as they would report on financial returns to investors.
93 percent of the world's largest companies publish an annual report that details community investment and social responsibility initiatives.
You may already guess we absolutely think every company should have a community investment plan -- but should you also plan to publish an impact report? Don't overthink it. A community impact report could be a small as a quick letter to stakeholders with some facts and figures about philanthropy and volunteerism for year. Or, on the complete other end of the spectrum, you could publish a full multi-page, professionally produced report that holds your company accountable to your commitment to the communities you serve year to year.
Key questions to consider when building out a Philanthropy / CSR / Impact / Community Investment annual report:
Read more about what an annual report could include in Boston College's helpful "How to Read a Corporate Social Responsbility Report" guide.
Don't know where to start?
Take a cue from American Express, CISCO, Blue Cross Blue Shield and others in the sample reports we've compiled for you below. When you take a look at the reports, consider all the different ways companies can measure impact, philanthropy, and achieve their financial goals while doing it.
Blackbird Philanthropy Advisors is a social enterprise devoted to Driving impactful and innovative change through philanthropy. Based in South Bend, Indiana, USA.