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The Guardian: Corporate social responsibility: The beginning of a beautiful friendship?

As business comes under more pressure to be socially accountable, new charity and corporate partnerships are redefining the way the two sectors work together. Anita Pati reports.

Wednesday November 8, 2006

One fan’s idea of corporate social responsibility (CSR) is another cynic’s greenwash. Over the last decade, the concept of CSR has been pummelled and massaged to suit countless agendas. Both campaigners and corporates thumb their noses at a term whose meaning zigzags from ethical supply chains to carbon trading to human rights. But behind evolving definitions of CSR is a crude formula: charities need funds, and companies need cudos.

Scrutiny by the NGO sector of corporates such as Shell and Gap has mobilised firms to align charitable and community activities increasingly with core business strategy. Companies are being judged on ethical business practices towards staff, customers, suppliers, local communities and host countries, rather than the size of their cheque to charity.

“Corporate social responsibility has moved on from the constant knocking on doors, cold calling and asking for fund-raising donations,” says Catherine Sermon, director of cause-related business at Business in the Community, a charity that helps UK companies improve the impact they have on society. “There’s been a big mindset shift towards shared goals and common objectives.” This comes in a climate where charities need to diversify income streams as statutory funding becomes increasingly prescriptive.

According to Jason Suckley, new head of corporate partnerships at Macmillan Cancer Support, many charities are failing to get to grips with the programme. “There are still charities out there that rely on philanthropic principles too much,” says Suckley, former BP European marketing director for petrochemicals.

“The trend is that pure philanthropic contributions are being replaced by CSR investment and, quite rightly I think, business wants a return from that investment. The challenge there for the charities is to be able to get a real understanding of the objectives of the corporate.”

Suckley has understood the aims of the energy giant npower, with which his charity enjoys a £1m, three-year partnership. Both are using economies of scale to develop a fuel management programme for people with cancer who, through job loss and extra heating needs, can incur financial hardship. Npower’s brand benefit is loyalty from existing customers, most of whom, says Suckley, will have been affected by cancer in some way.

The traditional, money-spinning mechanisms remain sponsorship, charity-of-the-year partnerships, philanthropic donations and cause-related marketing. One celebrated CRM strategy is that of Marks & Spencer and Breakthrough Breast Cancer. The campaign has flourished, with a portfolio of 90 CRM products now being sold during Breast Cancer Awareness Month. This raised £1.9m in 2005-06 – 8% of the charity’s total income. The tie-in exploited both parties’ expertise and core female customer base, and led to the launch of a lingerie range designed for women who have had mastectomies.

For years, the debate over the rights and wrongs of CSR has been polarised between diehard refuseniks who will use only sticks to engage with capitalism and charities that nuzzle up to the cash cows. Some campaign groups, like Greenpeace, refuse to accept corporate or government donations for fear of bias. At the other end of the scale, campaigning group Campaign Against Arms Trade’s annual Clean Investment list reveals the names of scores of UK charities who hold shares or investments in arms exporters such as BAE Systems.

Conservation partnership

Others are happy to work with energy companies. WWF, for instance, lists nuclear, oil and gas companies in its non-investment policy. The charity and HSBC bank side-eyed each other for 18 months before committing to work together on a five-year freshwater conservation partnership. HSBC’s £12.7m donation has enabled WWF to rejuvenate river basin habitats in China’s Yangtze, the Amazon in Brazil, and the Rio Grande on the US/Mexico border. In turn, WWF seconded an environmental analyst for three years to advise on HSBC’s sustainable investment policy.

For some, such as Tom Fyans, head of campaigns at Amnesty International UK, the “endless conference circuit about CSR” can be “boring” in its rhetoric. Amnesty has been educating companies on human rights for 10 years. It is now focusing on its work with the Trade Justice Movement, lobbying for a regulatory approach to corporate behaviour in the company law reform bill that is going through parliament.

And are “corporate citizens” always the swashbuckling saviours? While cash and in-kind donations by the UK’s top 500 corporate donors grew by 15% in real terms between 2004-05 to just over £1bn, this did not match the hike in company profits which soared by 31%. Donations as a proportion of pre-tax profits dropped for the third consecutive year to 0.8% in 2004/05, according to latest figures by the Charities Aid Foundation.

In an increasingly competitive fundraising market, partnerships can be unequal. Charities frequently underestimate the value that their brand can bring to a company or industry fighting criticism of their business practices.

“There’s often a built-in power imbalance arising from the sheer size of corporate brands and the ‘cash is king’ imperative that drives many fundraising charities,” says Manny Amadi, chief executive of CSR consultancy Cause & Effect. Relations, he says, are often corrupted when companies treat tie-ins as a sponsorship rather than a partnership.

Operating in a highly competitive fund-raising market means some charities can be reluctant to go on record with anything other than a glowing case study of a benefactor. One small charity spoke of alleged bullying and contractual breakdown from a corporate titan but retracted its story just before publication of this article because of what it described as legal reasons. “We don’t want to be perceived as troublesome,” said a spokesman. “We have an institutional obligation to speak out against injustice. But at the same time, our bread and butter is our corporate partnerships.”

Brand alignments can also be ill-advised. The Youth Sports Trust came under fire for endorsing Cadbury’s £9m chocolate for footballs promotion. Obesity campaigners claimed it encouraged mass chocolate consumption before tokens could be swapped for school sports equipment.

The trick to successful partnerships, according to Liz Markus, of Think Consulting Solutions, is to think laterally. “If the charity is just looking for cash, they shouldn’t look to the corporate sector. Few companies now see pure philanthropy as their responsibility. But what they can deliver beyond funding is huge – a skills base to help with IT, planning and financial management; high street communication channels for access to customers; influence with supply chains; and donations of goods and services. Charities just need to be creative.”

Weblinks

Business in the Community: www.bitc.org.uk

Company law reform bill: www.actionaid.org.uk/100326/company_law_bill.html

Shell’s charity rebuked by watchdog over Benn meeting – go to article below:

http://www.guardian.co.uk/frontpage/story/0,,1924170,00.html

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