Doing Good By Doing Good. Baines Peter

voluntary basis’.

      We could fill the chapter with such definitions but that would get tedious very quickly. The common thread is that it is about businesses conducting themselves in ways that benefit the community. It might be as simple as donating a sum of money once a year to a charitable organisation. Or it might be much more complex and include integration throughout the company, including indexing remuneration to sustainability measures, as is the case at Unilever Global. The proposition that CSR can be so much more than corporate philanthropy leads us towards the concepts of shared value and conscious capitalism. Both of these ideas sit outside the common model of CSR and offer a new view on how business can be done.

      A paradigm shift

      If you ask most employees what their company's CSR strategy is, they would typically answer along the lines of ‘our company supports charity XYZ and they give me one day off a year to volunteer with a charity of my choice’. What many would identify as the sum total of their CSR strategy most likely accounts for less than 50 per cent of the commitment made by businesses towards the community as part of their CSR model. As we will see, in 2014 Optus made a commitment of $9.7 million to its community programs, with $300 000 or just over 3.2 per cent in cash.

      The proposition that CSR can be so much more than corporate philanthropy leads us towards the concepts of shared value and conscious capitalism. Both of these ideas sit outside the common model of CSR and offer a new view on how business can be done.

      The concept of shared value by its very name points to a value exchange between business and the community. Business creates economic value and at the same time creates social value by addressing the needs and challenges that exist in the community. Shared value is not about cause marketing or programs such as employee giving, employee volunteering or matched giving programs. It looks for opportunities within new markets that address a community need, incorporating the entire value chain into the process and the concept of local cluster development.

      Conscious capitalism is another spin on how business can work with the community to create benefits on both sides of the ledger. The term is attributed to Muhammad Yunus, who in 2006 was awarded the Nobel Peace Prize for his 1983 creation of the microlending institution the Grameen Bank. John Mackey and Raj Sisodia, the authors of the 2013 book Conscious Capitalism, argue that there are four specific tenets at play: higher purpose, integration of stakeholders, conscious leadership, and conscious culture and management.

      Mackey and Sisodia's view is that ‘business is inherently good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence, and it is heroic because it lifts people out of poverty and creates prosperity’. They argue that companies who embrace conscious capitalism create positive impacts for customers and their employees, and also suppliers, communities and the environment. The authors argue that this results in better experiences for the customer, and lower costs and more growth for companies.

      They suggest that CSR is a part of conscious capitalism, which sits above the concept of CSR. It seems fair to conclude, however, that many of the advantages and benefits they see as accruing from the concept of conscious capitalism are embraced by the more mature CSR programs. Conscious capitalism certainly embraces a concept of deeper integration with all stakeholders, which is not necessarily part of your typical CSR program.

      Drawing a clear distinction between conscious capitalism and shared value is more difficult and potentially a matter of semantics. Both conscious capitalism and shared value are based on the idea of businesses working more closely with their community partners and improving their profitability by doing so. Advocates of both propositions nominate companies who integrate the fundamentals throughout the company. Shared value looks to create new lines of business through addressing a community need, while conscious capitalism focuses less on new markets than on improving the mode of operation.

      In an article for the Ivey Business Journal, ‘A Case for Conscious Capitalism: Conscious Leadership through the Lens of Brain Science’, authors Srinivasan S. Pillay and Rajendra S. Sisodia distinguish conscious capitalism from CSR, shared value and other models as a way of ‘doing business that goes beyond the ideas of philanthropic thinking or virtue in that it is meant to create an entirely new structure for businesses whose financial integrity rests upon the following: the thought processes inherent in purpose-driven leaders; creating multifaceted value for all stakeholders; leading through mentoring, motivating and developing people rather than through diktat or simple reward and punishment incentives; aligning leadership style with organizational purpose, and creating a culture of trust, authenticity, caring, transparency, integrity, learning and empowerment’.

      Shared value looks to create new lines of business through addressing a community need, while conscious capitalism focuses less on new markets than on improving the mode of operation.

      While Pillay and Sisodia may suggest that the match of values, leadership and going beyond philanthropic thinking is what sets it apart, advocates of shared value would suggest these components are of equal importance in their model.

      Shared value, conscious capitalism, triple bottom line, blended value – call it what you will – what is clear is there is a different way of doing CSR. An opportunity exists to move on from the thinking that simply giving money to charity will bring meaningful returns. At the core of the various models that seek to operate above traditional CSR is the need for external engagement with their operations and strategies.

      The traditional approach

      The traditional approach to CSR has focused on corporate philanthropy. It is the simplest form of giving for companies and individuals alike, and the untied funds provided to charity groups can be the most welcome form of donation. If it is the easiest way for corporates and individuals to give – and certainly it's easy for charity to receive funds in this way – does that mean it is necessarily the best model? We know that easy in life doesn't always mean best, and that is certainly true in this case.

      The qualifier to this discussion, though, is do the players involved here want more than they currently get from the relationship? Giving money, whether as an individual or as a corporate, can be the least engaging way of interacting with a charity. But who says engagement is the desired outcome? By giving money you can end the conversation and relationship quite quickly, and perhaps that is a desired outcome. By giving you have been seen to have ‘done your bit’, but by choosing just to give money you have limited your engagement and that might suit you.

      Structured workplace giving programs are one of the simplest forms of giving. Companies like them because they are easy to implement, usually entailing little or no expense to them; the employees like them because they are pre-tax, set-and-forget donations; and the charities like them because it is often money for jam. But where is the engagement?

      If you have no desire to divert resources away from core business and are more than happy to make an annual contribution, then you must accept the returns from that giving strategy will be limited also.

      Is the issue, then, a lack of desire to create a more engaging experience or a lack of understanding of the opportunities that exist? I believe it is the latter. Australians constantly rank in the top 10 of donors on a per capita basis across the globe. But are we engaging in the most effective way of giving, and does the current model encourage growth?

      The current model of most CSR programs, which is limited to one-off donations, matched grants and/or volunteering days, imposes an invisible ceiling on the sector, limiting potential and growth. Who then misses out? Well, everyone involved. The companies and individual donors don't capitalise on their donation and the charities aren't necessarily turning their donors into advocates and storytellers.