A major theme which is increasingly coming through in my conversations with the sector, is the desire to engage better with businesses. There seem to be two main reasons: most often, they’re seen as a potential source of new income at a time when other sources are tapping out; occasionally though, they’re also seen as a potential vehicle for delivering the mission.
The financial reason is self-explanatory, although in my experience it’s also massively underplayed. While 52% of the £48bn a year of sector income, as recorded by the annual NCVO Almanac, is “earned”, only around £1.8bn is earned from corporates, compared to over £11bn earned from individual members of the public. Considering the unique expertise that charities could offer to businesses, this seems like a huge missed opportunity.
There is a rapidly growing interest within certain consumer segments, about what happens to their money once it’s gone into somebody else’s till. The product is no longer the end of the transaction; consumers want to feel good, not just about what they bought, but who they bought it from. Alongside that, there’s an increasing awareness about the standards consumers should expect from brands: on environmental impact; gender and racial representation; the broader themes of inclusivity and corporate ethics and so forth. From LGBTQ to #MeToo, it can often feel like everyone is an armchair activist wanting to be on the “right side of history”, social reaction is instant and often overwhelming, and there is a growing zeitgeist for people to choose what they buy based on what they believe.
The dynamic of vocal ethical consumerism is challenging for businesses, but it’s an area in which charities can offer valuable advice and potential solutions.
In the current consumer environment, a clearly stated, positive social purpose or a distinct ethical positioning, can be a powerful competitive advantage for forward-thinking businesses, with benefits from staff recruitment and retention, to customer engagement, and from product premiumisation to new market development. And the same could be said for taking big strides on inclusion and diversity, from both an employee and a customer perspective. But in order to help businesses become more inclusive, to genuinely embrace and get commercial value from a social purpose and ethical positioning, charities need to speak to businesses in their language, not in the language of charity.
Software companies aren’t trying to find ways to attract and retain employees with Aspergers simply because they want to be charitable, they’re doing it because they want to develop better algorithms. Online businesses aren’t developing accessible websites because they feel sorry for people who are starting to lose their sight, they’re doing it because there’s three percentage points of potentially very loyal market share up for grabs if they can get it right. And manufacturers aren’t aiming to go carbon neutral just because they care about the environment, they’re doing it because increasingly their customers care too, and the first brands to get the badge will snap up the ethical consumer.
The biggest challenge charities have, is that they think like charities. They get as far as the CSR team, and win a few thousand pounds of donations and a few hundred hours of employee time for projects and fundraisers, but they don’t engage with the business itself. They don’t help the business leadership understand and realise the full benefits of genuine partnership, of not just buying a piece of the charity’s brand, but of buying strategically into its mission, and the potential competitive advantages of fully jumping on board.
Of those two reasons that I described in the opening, it’s the second one: using business as a vehicle for mission delivery, that offers the greater strategic opportunity for charities. Today’s global market economy is arguably the single most powerful force for social change that the world has ever seen. Every day, almost every person in the world interacts with a dozen, if not a hundred times as many small businesses and big brands, as they do non-profit organisations.
Influencing how those businesses and brands behave, using them as a vehicle to raise awareness, to offer opportunities and to touch people’s lives, has the potential to reach far further and have far more lasting impact than any non-profit could ever hope to do alone.