Philanthropy can be beneficial for everybody, including a business owner. Laser Group managing director Steve Keil explains how giving back can be a two-way street.

Setting up and running a profitable contracting business takes a lot of heart and determination.

Those that are successful understand the power of perseverance. You started your business to earn a living and through perseverance, hopefully you’ve exceeded that goal.

But what comes after that?

Beyond profit, we should realise the importance of what we can do for our community and in the process, make our brand and businesses effective in reaching out to society, to make the world a little bit better to live in.

What makes a company truly successful?

Let’s assume your business is successful and is not a drain on the community. That is, you employ people (even if only yourself), provide products and services your community, which appreciates and acknowledges you by willingly paying you as invoiced, and you pay all your suppliers as agreed.

If this sounds familiar then you are a successful business owner who makes a positive impact on the community. But where to from here? How can you make a greater impact on your community and in turn, your business?

Social responsibility

A lot of people see social responsibility as simply an act of kindness to society and the community by aiding those who are in need and they’d be correct. However, socially responsible businesses not only help the community but also help themselves.

I know many of you already understand this. When your business sponsors the local kids’ sport team by providing uniforms with your logo on them, or promoting your business at the local oval, or maybe even being active in local charities, you’ve ventured into the area of social responsibility.

Such ventures can have different motives. For example, your involvement in a kids’ sports program may be to ensure the survival of that program for the benefit of your children, but having your sign at the oval may help uncover reciprocal business opportunities with other local businesspeople. Irrespective of whether the motives are business-driven or altruistic, having a socially responsible position is good for society and for your business if done well.

Social responsibility for growth

It is often assumed that only businesses at the big end of town can truly afford to be socially responsible. This of course is untrue.

Recent observations on the link between social responsibility and the growth of companies, has shown that small businesses and start-ups are actually the ones who can benefit most.

According to Susan Salgado, co-chair and co-founder of the New York chapter of Conscious Capitalism, “Being socially responsible is often easier for small businesses.”

This goes directly against what is widely assumed, which is that small companies often do not have the funds to initiate social responsibility movements and give back to the community.

“Small companies are more nimble, so it’s easy to stay more closely attached to your purpose and values,” Salgado stated.

“There are a lot of small businesses that are actually doing it – even in the restaurant industry where I come from, where margins are incredibly small.”

In the simplest sense, social responsibility is more viable as an option for small businesses since they are the ones who are quite often more connected in to their local community. This ability to relate better is why we often see smaller companies doing the most, in their own way, to serve the people who will one day become their loyal consumers, if not their lifelong fans!

What the numbers say

According to a study by Nielson called Sustainable Selections: How Socially Responsible Companies Are Turning a Profit, from the company-consumer point of view, a company that is more socially responsible is more likely to make a bigger and better profit than a company that is concerned solely about their profits.

Nielson identified that consumers are 66% more likely to pay for goods and services produced by brands that have a social and environmental impact. 43% of these respondents to this online survey claimed that they are most likely to buy a product from a company established in its commitment to society and 41% said that they are compelled to support brands which are known to be committed to the community.

This highlights that becoming socially responsible is good for your business, contributing to the community and creating strong brand trust, credibility and a reputable name for your company in the process.

Think of it this way: earning straight from your business is all well and good, but gaining more traction and influence in society by helping the community? That is how you draw in customers and retain their patronage. This is hardly surprising at all, since the public is now more aware of what companies do through social media and other means.

Marketing versus publicity

Marketing can go a long way to drive your business forward. I’m a strong believer that all businesses should have a marketing plan. If your marketing budget is tight (and whose isn’t?), then think of how you can leverage free publicity to drive business growth.

You can grab the eye of local media by getting featured for good community work, when it’s of genuine interest to the community. It’s well worth the time and effort to brainstorm and plan how you can develop programs that contribute to society. You can gain the interest of the public, promote your brand and build your business.

A word of caution

Having a sign at the local sporting club oval will portray you as having strong local community focus. At the same time, it’s seen as outdoor advertising. Self-promotion in this circumstance is not only totally appropriate, it is expected.

When your efforts are more philanthropic, such as supporting a charity or donating to a cause, you will more likely be viewed as a business who is giving, as opposed to it being marketing. Importantly, the community, who are also giving, will simply view that as your donation is from a business, you have a greater capacity to give.

Branding can be beneficial in such cases, as people want to know who is giving and why. However, in philanthropic circumstances, it should be secondary to the cause. You certainly may promote your businesses involvement with the cause to encourage others within your business circles to also get involved, i.e. for the greater good of the cause.

And when done well, with credibility and authenticity, you will be rewarded. Personally, it’s good for the soul. Your business will enjoy the benefits too. When done poorly, however, you’ll be punished as a business trying to leverage a ‘not for profit’ or charity for personal business gain.

There have been some massive fails where celebrities and businesses have run campaigns asking for social medial ‘likes’ for charity donations. One Australian online shopping site tried to trade the 2013 Tasmanian bushfire crisis for ‘likes’. For such campaigns, most people will think: “Don’t be a dick, just donate the money”. Don’t be that company.

A Final Word

Corporate social responsibility is becoming an indispensable part of the business world. It is important for a business operating in the current era to recognise that its actions are impacting all its stakeholders including the society. It’s about time that we recognise that doing good does not just look good but is, in fact, good for the community and for business too.