How Corporate Philanthropy Has Changed One Year After the Business Roundtable
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On August 19, 2019, the CEOs of 181 large corporations signed onto the Business Roundtable’s updated Statement on the Purpose of a Corporation. The well-publicized statement asserted that a company should no longer be beholden only to the interests of its shareholders but to all stakeholders, including employees and the communities within which the companies operate. The about-face was met with a mix of optimism and cynicism. One year later, that same blend of healthy (and justified) skepticism characterizes the evaluation of if and how well the signatories have acted on the Statement.
When they signed on, the executives could not have known that they would be put to the test in a big way in just over half a year. The pandemic, closely followed by the reckoning for racial justice, has many Americans asking corporations: “What will you do for us?” Whether or not the roundtable was intended as lip service before, corporate silence and inaction in this moment are not acceptable for many consumers. Nonprofits and the corporate world alike have known for a while that the public wants genuine philanthropy, engagement and community development. But that desire has morphed into demand. Many Americans are asking that companies not only respond to and incorporate racial injustice into their CSR platforms but that they lead on it.
- 42% of consumers would start buying from a brand’s competitor if the brand doesn’t honor their social justice commitment (Sprout Social survey from August 2020)
- “55% of consumers expect brands to take a stance that goes beyond corporate statements and monetary donations such as new corporate initiatives, or commitments to specific goals. These expectations are significantly higher among millennials (65%).” (Sprout Social survey from August 2020)
The pressure has never been higher on the C-Suite, internally from employees and externally from consumers and competitors. Corporate Social Responsibility will emerge from 2020 bigger and bolder. This means that companies’ needs and pain points are different than they have been in past years. Partnerships must be more than tangible (monetary or in-kind) donations. In partnering, a nonprofit brings its goodwill, core values, knowledge, relationships, and expertise to the table. Your organization then is in a position to show companies what genuine, impactful action looks like, how they can be effective in your cause area, and how that work is communicated to all stakeholders. If the partnership is deep enough, then your nonprofit’s intangible value lends itself to humanizing the company’s identity in the hearts and minds of stakeholders and changing it from within.
When you talk to current or prospective partners, highlight that intangible value. When they want to talk dollars and campaigns and return on investment, remind them that it’s only one part of the equation. Push your partners toward deeper employee engagement, vendor activation, executive buy-in and long-term projects that benefit from core value alignment and stable relationships. The ultimate goal is working toward sustainable partnership that seamlessly aligns your organization and their brand.