Yuliya Begma

Contemporary Issues, 2003

Organizational models for corporate participation in community outreach

POLICY BRIEF

The subject of the present research pertains to the field of corporate social responsibility (CSR), which for the purposes of this research is defined as operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business.[1] Corporate social responsibility is perceived to be a phenomenon, which has a broad scope of manifestations ranging from protection of the minority shareholders’ rights to the ban of child-labor connected goods, thus, the terms “corporate social responsibility” and “community contribution” can not be used interchangeably. Community contribution with regard to a for-profit institution is defined as a responsibility to respond to the needs of the community, where the company operates consistent with company’s business objectives[2].

            The present research identifies the factors that contribute to the success of the community outreach programs of businesses, examines internal organizational structure a business needs to be effectively involved in community contribution activities and the role non-profit organizations play in these initiatives.  The research aims to study the relations of non-profit organizations and businesses that go beyond direct funding and looks at the expertise provided by each party.

            Based on the review of the theoretical approaches to corporate social responsibility and three case studies of partnerships between non-profit and commercial institutions, several principles were found to be true.

            The environment conductive to the CSR system should be sustained on the state level by means of laws and regulations, which create an incentive for the businesses to get involved into the solution of social and economic problems of the communities where they operate. The right to provide preferential treatment for the specific groups of people or specific areas should also be secured by the legislation. Incentives based on tax-deductions and tax credit schemes should be provided to foster involvement of businesses into activities beneficial for the communities.

            General public should be educated with regard to CSR values. Consumer activism enhanced by the reputational agencies, media, best practices and competition in the field creates pressure on the businesses to act up to public expectations. Specialized consulting firms advancing CSR are of great help in provision of the expertise with regard to CSR tools and aligning these activities with corporate marketing strategies.    

            The support of the owners/top managers of an enterprise is the key factor for the success of the community contribution programs at the company level. This support should be documented in the internal policies (core values statement) of the enterprise. Commitment to the CSR values and community contribution activities in particular should be reflected in the recruitment policies and personnel instruction. 

            Community contribution activities should be staffed: at least 1 full-time employee should be solely engaged in managing community contribution activities of the enterprise. Responsibilities pertaining to participation in the community-beneficial activities should be assigned to several more people willing to take them up voluntarily.

            Direct employee participation is an inherent part of corporate community contribution programs. Certain number of paid volunteer hours per week should be allocated for the employees to get involved with the non-profits they choose to contribute to; one or two events requiring broader employee participation should be held a year.

            Non-profits remain the best available resource in helping the companies translate their commitments into action by means of providing their expertise with regard to socially beneficial activities, creating a framework for the companies to both participate in the projects and to obtain the publicity component. 

            An opportunity for continuing and increasing the involvement of both parties should be provided within the framework of collaboration between non-profit organizations and businesses.

            Non-profit organizations often take up the role of intermediaries between the businesses and the state-owned institutions as they tend to be more accountable and have better managerial qualities and opportunities than the state owned schools, hospitals, etc which also tend to be unable to handle funds separately from the main budget line they receive.

 

A few steps can be made to influence the CSR status of Ukrainian enterprises.

q       Laws and regulations on the state level and statements on the regional level should be created to stimulate involvement of business institutions in addressing the issues pertaining to national social and economic development. The incentives for the business engagement in charitable activities currently existing in Ukraine should be increased and diversified.

q       The attention of the existing NPOs on the first place involved in environmental safety, labor protection and protection of consumer rights should be drawn to the importance of CSR issues in evaluating company’s performance.

q       There should be created independent non-profit institutions focusing solely on CSR – related questions, collecting relevant data, creating ratings of the companies’ performance with regard to CSR, educating general public, non-profit organizations and for-profit institutions.

q       CSR values should be promoted to businesses. One of the ways to stimulate involvement of the top business executives into community contribution activities is to increase their participation on non-profit boards, which would in its turn encourage their commitment to community contribution activities.

q       The marketing potential of the CSR approach to corporate governance as well as its value in terms of sustainable development should not be underestimated.

q       The community contribution policy of the for-profit enterprises should be reflected in the Collective Agreements.

q       Community contribution coordinators both on the corporate and the non-profit side should receive special training.

q       Employee participation in the voluntary activities cannot be ensured in Ukraine until the employees are fully aware of the concept of volunteering.

q       Participation of the non-profit organizations in the projects between for-profit institutions and state-owned institutions is relevant for the conditions of Ukraine as the vast majority of schools, hospitals, orphanages are owned by the state. At the same time they are in great need, and sometimes lack the capacity to manage funds of individual donor and to provide enough accountability for the donor institution to trace the way project is implemented.

    Yuliya Begma © 2003               

    begma_yk@yahoo.com

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