Good Honest Dollar $$

Last Friday, I outlined what I believe to be the main benefits of the trend away from simple corporate donations towards community and stakeholder engagement by companies through community business partnerships.

To recap, community business partnerships involve one or more business entities partering with one or more NGOs or community based organizations to produce a desired social outcome. The benefits of such partnerships include but are not limited to:

• greater certainty in terms of funding and resource commitments through longer term commitments from companies;
• the opportunity to bring corporate expertise and resources to social projects;
• greater impact on public relations and employee morale through tangible community outcomes;
• greater corporate accountability through allowing the community to evaluate the impact of CSR projects more effectively;
• greater understanding of dynamics of local target markets; and
• opportunities for employee learning and development outside of their everyday responsibilities;

Today, I would like to focus on potential drawbacks or disadvantages of greater corporate engagement with the community as opposed to mere corporate donations.

Arguments against community business partnerships

The case against corporate participation in business community partnerships appears to be a difficult case to make. There are few apparent drawbacks or disadvantages of the community business partnership approach. Nevertheless, I would like to consider some possible arguments against this approach to CSR:

 
• Management distraction from the ‘core business.’Unlike straightforward corporate donations, community business partnerships involve active participation from the company and its employees.

Accordingly, such projects have the potential to distract management attention its first and foremost priority – the effective management of core business operations. 

 
• Cost.

Community business partnerships entail costs as well as benefits, which can include management and employee time as well as investment in equipment or facilities.

Companies should carefully weigh such costs against the expected benefits of the project in order to ensure that such projects are mutually beneficial for the company and the community.

 
• Reputable charities are experts at social programs, companies are not.

The lads (and ladies) at BMW are experts at making what are indisputably amongst the best automobiles in the world. They are probably not experts at providing essential blood related products services to hospitals and patients.

But staff at the Red Cross are. BMW should focus on making great cars and leaves the business of blood related services to the experts.  However, BMW’s $1 million donation in America alone, along with donations from private citizens and other corporations, (refer donor’s list) provide the critical funding necessary for the delivery of this vital service.

Community business partnerships are most effective in cases where companies have particular expertise or facilities to contribute toward the project concerned. Where this is not the case, straightforward corporate donations, rather than community business partnerships, may be a more effective way to produce desired community outcomes.

  
• Potential to sway projects toward a corporate agenda.

Some in the community may suspect that corporate involvement in community projects may cause such projects to be swayed in such a way that they meet the corporate demands for publicity rather than underlying community needs.

I cannot see much logic behind this viewpoint. Community business partnerships involve business partnering with NPOs and community organizations, neither of which would enter partnerships which did not provide real community outcomes.

NPOs and community organizations are in the business of delivering real positive community outcomes, not assisting companies with public relations.

 
Conclusion

There are many cases in which community business partnerships provide the most effective way for corporations to assist in meeting community needs as well as providing net benefits to the corporation.

In deciding whether and which projects to participate in, business should carefully weigh up the benefits and the costs of participation.

 
Over to you

Are community business partnerships the best way for companies to contribute to society?

Please feel free to provide your thoughts, opinions and viewpoints by clicking on the ‘comments’ section below.