LBG is the global standard for measuring and benchmarking corporate community investment (CCI). LBG’s measurement framework ensures a robust and credible approach to corporate partnerships.
At its heart LBG is a simple input/output model that can be applied at a pace that works for individual companies. It allows a company to consistently assess its community activities in terms of the resources committed (the inputs) and the results achieved (the outputs and the impacts). LBG is aligned with leading sustainability indices such as DJSI, GRI, and BITC’s CR Index.
Corporate-community partnerships have come a long way. I have been working in the corporate social responsibility space for over 20 years, and in that time I have seen how partnerships have evolved from one-off charitable donations, to cause-related marketing, to cross sector partnerships that encompass employee volunteering, in-kind products and cash contributions.
Today I am inspired by the ways in which companies and non-profits are innovating in this fast-changing world. Corporate partnerships of the future will be underpinned by the principles that have been tried and tested through best practice in the past. Principles such as a having a clear strategic intent or shared purpose and a social impact measurement framework in place. However partnerships of the future will be more innovative and impactful. They will be embedded within core business strategy and draw on the strengths of the business to address social needs.
My predictions for the future are echoed by the recent findings from Corporate Citizenship’s 2017 State of Corporate Community Investment Survey. We asked participants to identify where they believed CCI to be going over the next ten years. The greatest trend identified was towards “social innovation” such as shared value and social procurement programs, with 74% of respondents highlighting this.
This was followed by strategic community investment (62%), alignment with the United Nations Sustainable Development Goals (SDGs) (55%) and commercial initiatives such as cause related marketing (47%). These results demonstrate continued drive towards investment opportunities that align with business strategy. This is further reinforced by the fact that only 7% of respondents felt that more traditional charitable giving, such as ad-hoc and one-off donations, would play a key role in the future. To support this view, LBG has tracked the proportion of resources contributed as one-off donations by companies over the last 12 years. In 2006, in our region, 37% of the total contributions reported by businesses as a one-off donation, in 2017 it was down to just 12%. This has been a consistent year on year reduction over the last 12 years. More information available at http://review.lbg-australia.com/
LBG has developed an approach to social innovation programs. A foundation of this approach, LBG and Corporate Citizenship’s ‘Investing for Shared Value’ paper, proposes a framework for measuring shared value and presents a companion assessment tool for organisations.
I’m cognisant of the fact the world faces some big challenges that can’t be solved through CCI budgets alone. CCI remains important, but we must harness the scale and resources of business to achieve the change needed. LBG’s upcoming guidance on social innovation will support the companies and their partners to understand this exciting and impactful new area.
I am often asked by both companies and non-profits how to align CCI with the SDGs. It is almost two years since the launch of the SDGs. Responses to the State of CCI survey suggest some businesses are starting to seek out associated business opportunities, with just over half of respondents indicating alignment of community investments with the SDGs. Furthermore, 55% of respondents see alignment with the SDGs as being a primary focus for CCI over the next 10 years.
While these numbers represent a slight majority, they somewhat lag behind Corporate Citizenship’s research that revealed 81% of millennials surveyed believed that the private sector has a very important role to play in achieving the global goals.
The four goals most referenced by respondents were:
- GOAL 4: Quality Education (25%)
- GOAL 11: Sustainable Cities and Communities (23%)
- GOAL 3: Good Health and Well-being (22%)
- GOAL 5: Gender Equality (19%)
While there is clearly growing engagement from the corporate sector, we need to drive new collaborations and innovation to translate the global goals into local action. Corporate Citizenship recently undertook some research to look at how businesses have responded to the Global Goals, and what initial implications and opportunities the Goals have presented.
In this year’s LBG benchmark review we saw a 150% increase in the number of companies that report impact. Respondents to the State of CCI survey highlighted increasing internal pressure to justify spend and demonstrate value, both in terms of social impact and commercial return. Respondents also noted the importance of measurement in enabling performance improvement of programs over time.
However impact measurement remains a key challenge for companies, and in the State of CCI, almost 80% of respondents said they need help with measurement and storytelling. Aligned with this, a quarter of respondents felt that upskilling community partners and building their capacity would help them achieve their goals. Several noted tensions between aligning to corporate strategy and “doing social good”.
Some of the key themes to emerge from respondents were:
- Standing out from the crowd: “Everyone wants a piece of the media action”
- The need for collaborative working/solutions: “Trying to help fix a huge problem with small projects”
- Resourcing constraints: “Competing demands for funding”
- Demonstrating impact: “Measuring value, ROI, and showing correlated brand loyalty as a result of community investment”
- Storytelling: “Meaningful aggregation of the community impact in order to “Tell our Story” at an aggregated level” and “Remaining authentic and credible in an environment of increasing ‘impact washing””
So it is clear the conversation about impact is, I am pleased to say, not going away any time soon, but support and guidance is needed and LBG has developed a range of tools to support organisations on their journey. LBG for Community is a new program that supports not-for-profits with strategic partnership development, reporting and impact measurement. Over 25 organisations have completed the program in 2017, and registrations are open for the program in 2018. http://www.lbg-australia.com/about-lbg/lbg-community/
Over 40% of companies are aspiring to invest in contributions that achieve value by 1) focusing on achieving greater alignment with business strategy and delivering shared value projects; and 2) improving measurement of outcomes. The survey found that the average spend on a key flagship partnership ranges from $100k-$250k. We expect that value to increase as companies seek to align their partnerships further. I predict the dollar value of flagship partnerships will increase but the number companies manage will go down.
Corporate volunteering has been around for several decades now, and organisations appear to acknowledge the value of having a corporate volunteering program – 83% have a program in place. The State of CCI survey found that over half of respondents are seeking to either increase participation or increase focus on skilled volunteering. Similarly to workplace giving, in addition to resourcing requirements and employee engagement, one of the common challenges stated was the alignment of the volunteering program with the community investment and business strategy. Achievement of this continues to present a significant opportunity for companies to grow their positive impact on society whilst accruing meaningful business benefits. Connecting volunteering to employee development remains an underutilised opportunity. A study commissioned by City of London and undertaken by Corporate Citizenship, analysed the business case for volunteering, seeking to assign a financial value to the skills gained by employees. ‘Volunteering: The Business Case’ presents the findings of the study and includes an evaluation tool designed to enable companies to gather hard data on competency development.
So what about the cause areas companies are investing in? In this year’s LBG Benchmark Review, we saw Health reach an eleven-year high after seeing Social Welfare dominate for the all previous reporting periods. The biggest change in what members support was in economic development, which saw a rise of 12% to 17%, specifically around financial competency.
Globally we saw over 160 reporting members contribute over $3bn USD with an average contributing member giving $19.8m USD, so CCI budgets remain significant. This year the Retail & Wholesale sector contributed the highest proportion in the Australia & New Zealand cohort.
Each year within the LBG Benchmark Review, we also look at how CCI teams are resourced. This year we saw a drop of 10% in the size of CCI teams. However this did not affect the size of CCI budgets. Perhaps companies are trying to do more with less, however this is not a trend I envisage for the future.
In addition to the funds companies contribute from their own bottom line, they continue to facilitate funding from third parties such as customers, government or their own employees. This additional funding is called ‘leverage’. This year companies reported $76m in additional contributions.
Overall we identified some key areas for improvement in CCI during the benchmark process this year. Firstly, alignment of strategy and company subject focus areas. Materiality assessments can assist companies in ensuring they are addressing the issues most important to their stakeholders.
Another opportunity relates to in-kind donations (for example, donations of products and services). Most LBG members said they contributed on some level but without systems across their business it was hard to ensure that all contributions were being captured. This is an area we feel is under reported.
Tracking leverage continues to be an opportunity for companies to increase overall contributions to the community. This also represents a great opportunity to engage stakeholders or partners and to determine alignment and possible joint ventures to tackle common community initiatives.
LBG is measurement framework, but it’s also a membership and a movement of companies and their partners connecting, learning and sharing. As we look to the immediate future, our key focus is the integration to become one global LBG network rather than separate chapters. LBG members will have access to more data, more benchmarking, more learning and more innovation in CCI than ever before. Never has there been a better time to join our global movement to drive more effective and valuable CCI.