Why giving back is good for business
Story by Hannah Clark
What goes around comes around, especially in the business world. While the pursuit of profit has traditionally driven most business ventures, one of today’s most meaningful KPIs is CSR: corporate social responsibility. Global disasters, an unstable economy and social issues at the forefront of everyone’s minds have ushered in a do-good renaissance, a trend that even small businesses can’t afford to ignore.
A recent study from MarketingDive found that 63 percent of consumers prefer purchasing from purpose-driven brands. Additionally, a 2022 survey from MetLife and the U.S. Chamber Small Business Index reported that 91 percent of small business owners believe that businesses should give back to their local communities, regardless of their size. When it comes to whether or not a business should give back to its community, most consumers and business owners agree – and to their benefit. Here’s why giving back is good for businesses of every size.
Brand loyalty and reputation
One of the most immediate benefits of giving back is the enhancement of a company’s reputation. Customers are increasingly looking beyond products and services; they want to support businesses that align with their values. When a company actively engages in philanthropic activities, it sends a clear message that it cares about more than just profits, helping customers feel better about the purchases they make.
Giving back also can provide a significant competitive advantage. In industries where products and services are similar, a strong CSR program can differentiate one company from its competitors. Consumers are willing to pay a premium for products and services associated with socially responsible companies. Some government agencies also offer incentives, such as tax deductions or grants, to companies that engage in philanthropic activities. These incentives can help businesses reduce costs and improve their bottom line.
Employees are the backbone of any organization, and their well-being and job satisfaction are crucial for productivity. When a company supports charitable causes and encourages its employees to get involved, it fosters a sense of purpose and pride among its workforce. Many employees today want to work for companies that make a positive impact on society, and they are more likely to stay with such organizations. Volunteer programs and charitable initiatives provide opportunities for team-building and skill development, which can enhance employee engagement and job satisfaction. When employees are proud of their employer’s commitment to social responsibility, they become brand ambassadors, helping to attract top talent.
Innovation and opportunity
Engaging in philanthropy can drive innovation within a company. When businesses focus on solving social and environmental challenges, they often discover new technologies, processes and business models that can lead to long-term sustainability and growth. For example, companies that invest in sustainable practices and technologies not only reduce their environmental impact but also position themselves as leaders in their industry. This can lead to cost savings and new market opportunities.