In the previous article in this two part series, our CEO Edward Shuttleworth explored how evolving expectations in Corporate Social Responsibility increase the ways business can benefit from ‘giving’ to charities. In this article Ed examines the long term impact giving can have for the communities supported, surely a key measure of an effective giving strategy.
Part 2: Returns on Social Investment
A starting point when assessing return is to identify different types of charity and their aims. Excluding – for the purposes of this discussion – single purpose initiatives focused on evangelising, politics, animals or medical research, there are three broadly accepted categories of charities: those providing ‘relief’, ‘development’ or ‘welfare’. ‘Relief’ provides temporary support to people in emergency situations after natural or chronic disasters. ‘Development’ addresses structural inequalities, working with communities to help them meet their basic needs. ‘Welfare’ provides direct assistance to alleviate immediate needs rather than the root causes of those needs, such as food, clothing sponsorship or scholarships, institutionalised care, and medical care or hospices.
Selecting between these charitable models requires, at its most stark, a choice between sympathy and selective investment. The immediate relationship between problem and action, by welfare and relief agencies often appears to be relatively clear, providing a compelling case for a compassionate response focussing on a quick fix. For ‘development’ organisations, this relationship may be extremely complex with problems appearing intractable, action having to be multidimensional, and solutions naturally only emerging after some time.
We must acknowledge the complexity of measuring a return on investing in ‘doing good’ in any context. Such a return might be more appropriately considered an impact, rather than a function of a traditional measure of profit and loss.
First consider the return from relief. For example, supporting victims of the Nepal Earthquake, where we are encouraged to give ‘Just £5’ by a poster depicting a person still covered in dust, being lifted from the remnants of what was presumably once their home. There is a clear appeal for sympathetic support and this investment feels appropriate. But answering deeper questions like “How does the £5 change the lives of those affected beyond the blanket it buys?” is a complex exercise.
This feeling of appropriateness for the immediate, still dominates the rationale for business giving, generally set in a local context, such as feeding the homeless in London. However, donating to organisations that focus on ways to reduce future risk, (for example – teaching the Nepalese about earthquake proof buildings) is increasingly being considered.
Measures, such as teacher training, that go to addressing the circumstances underlying the social inequalities abundantly evident in the world’s poorer populations, offer less obviously gratifying returns. They are however, generally easier to define, with this form of charity more used to the rigours of reporting impact through such measures as student attendance levels, examination marks, teacher achievement levels, community involvement etc. A note of caution should be applied to these static measures, given lasting solutions generally emerge over the long term. (Possible regression once a project is complete is a major difficulty with achieving sustainability and a subject for a future article). The longer term impact is the key measure.
Pursuit of development goals has been the province of the more sophisticated donors or Government. However this is changing as business applies more rigorous standards to its ‘giving’ and better understands the dangers associated with long term dependency and institutionalisation. It may be far better to go to the source of the problem, than continue to nurture its consequences, recognising that these interventions do not have to be mutually exclusive.
This move is being greeted with huge applause by many in the charity sector wary of some of the more banal welfare-based initiatives. Donors have to explore beyond their own experiences in order to gain a contextual understanding of the issues, an appreciation of realistic benchmarking, and empathy with predicted levels of impact. In this regard, there is no substitute for direct involvement, seeing and experiencing what is happening on the ground. Gaining an appreciation for the broader issues faced by charities is perhaps one of the biggest dividends from that investment, both for the investor and for the beneficiaries.
Unashamedly, we argue that taking people to see and be involved with what we do, achieves real impact in the communities where we work and lessens their feelings of isolation. We understand sympathy, but that rarely generates lasting improvements and all too often has unanticipated adverse consequences. There is no substitute for a contextual understanding of the underlying issues that achieve long term impact.
This article was originally produced for Thinking Aloud, the news and opinion forum for Aberdeen Asset Management.
Photo: Project Teams enable our corporate partner staff to come and experience first hand the impact of their organisation’s investment.