In the midst of the coronavirus pandemic, businesses across the Pacific Northwest have stepped up to the plate to help their communities through corporate social responsibility. Local restaurant Ciao Thyme is donating meals to healthcare workers, Amazon is giving out pay raises and donating millions of dollars to King County businesses, and Starbucks is offering unlimited sick pay to all their employees.
All this work comes at a time when people are more skeptical than ever of businesses’ motives for helping out. In such skeptical times, how can businesses show that they really care about the issues they support? One way to answer this question is by looking at local companies that have been successful in showing that they care both during the pandemic and before it.
Why does Corporate Citizenship Matter?
According to a 2017 study by Cone Communications, an award-winning communications firm specializing in corporate citizenship campaigns, 70% of Americans believe that companies have an obligation to improve social issues that aren’t related to business operations.
This belief can translate into profits. According to a study by the Lewis Institute for Social Innovation at Babson College, a well managed corporate citizenship program can lead to an increase in revenue of 20% and a reduction in staff turnover by 50% for a large publicly traded company. The study goes on to explain that “every $1 in corporate philanthropic contributions can generate $6 in increased sales revenue.” Research on the impacts of a good corporate citizenship campaign for a small business is sparse, but one can assume these benefits translate over in some way.
With this information in mind, many business owners have started to invest more in corporate citizenship. According to a 2017 study by KPMG, 93% of the world’s largest 250 companies produced a corporate citizenship report in 2017. To put that number in perspective: in 2002, that number was at 45% and in 2008 it was at 83%.
But that doesn’t mean a business should just jump into a giving campaign. If a business takes the wrong approach, it can lead to backlash and set a business back.
“Organizations have to be doing something for a clear reason that they can communicate,” said Kevin Wilhelm, CEO of Sustainable Business Consulting.
Wilhelm has spent the last two decades consulting with over 115 businesses on corporate responsibility strategy. He is also the author of the recently-released book, “How to Talk to the Other Side - Finding Common Ground in a time of Coronavirus, Recession and Climate Change.”
“Where businesses get into trouble is when they say they are committed to something but then turn around and go back on that commitment or give inconsistent reasons for their commitment,” Wilhelm added.
Case Study 1 - Starbucks: Consistently Caring for Employees during a Crisis
As the coronavirus pandemic threatens to turn into another global recession, many businesses may be contemplating cutting their corporate citizenship budgets. Even with this, one company that has done a great job of remaining consistent in their corporate social responsibility efforts is Starbucks.
Starbucks is known for its generous employee benefits and culture. Forbes recently named Starbucks the seventh best employer in Washington State, according to their ranking page. Forbes ranked them 172nd worldwide.
This commitment to their employees has continued into the pandemic. Starbucks has added onto their employee benefits package, donated millions of dollars to charities across the globe, and partnered with food banks across the United States.
According to Business Insider, Starbucks was one of the first major U.S. corporations to offer catastrophe pay to any barista who might have come in contact with Coronavirus. On March 20, the company said they would pay all of their employees for the next 30 days even if they didn’t come to work. People that choose to come to work also received a $3-per-hour bonus. At the same time, the company also announced that they would provide all U.S. employees and their family members with 20 counseling sessions a year and access to childcare benefits. On April 1, the company extended all these benefits to May 3.
On top of their employee benefits, the company has donated $3 million to global charities fighting Coronavirus and $250,000 to Seattle-area charities.
All of this work highlights an important lesson in being authentic with corporate citizenship: sticking with it even when times are bad.
“It’s fine to make these commitments when times are going well,” Wilhelm said, “but it's another thing to stay committed when things aren’t going well.”
While there hasn’t been much research looking at the impacts of Starbucks’ decision to expand employee benefits, we can infer from previous research that these efforts will help reduce employee turnover in the long run, which will help Starbucks recover from the pandemic quicker because they’ll spend less time training new staff. This will ultimately help bolster the bottom-line in the future.
What we can learn from Starbucks
- When you make a commitment, it’s important to stick with it.
- Your employees are one of your biggest assets. Take care of them and they’ll take care of you.
Case Study 2 - REI: The Power of Breaking Norms
REI Inc. is a retail and outdoor recreation services company founded in 1938. The company operates 162 different retail stores in 39 states and sees an annual revenue of around $2.78 billion. Headquartered in Kent, Washington, REI has long been committed to environmental conservation and exploration.
In 2015, the company demonstrated this commitment by announcing that on Black Friday it would close all stores, stop all online order processing and pay all 13,000 of its employees. At the same time, the company released an online guide to hiking trails and other outdoor activities across the U.S. They invited people to share their outdoor stories on their website and through the hashtag #OptOutside. The company said their move was an act of protest against the mass consumerism Black Friday is known for, which they said had “gotten out of hand,” according to a company press release. The goal was to get people to spend time with family and go outside instead.
The campaign was a massive success in both social responsibility and return on investment. It generated over 6.7 billion media impressions and led to a 7000% increase in social impressions. Overall, more than 1.4 million people interacted with the campaign. Additionally, the company saw a 90% increase in retail job applications the following quarter.
REI has continued the campaign every Black Friday -- evolving and growing each year. In 2016, REI got 300 companies and nonprofits to join them in shutting down on Black Friday and in 2019 the company launched a nationwide trash clean-up effort.
So what made REI’s #OptOutside campaign so successful? It all comes down to the fact that the company took a bold move that broke cultural norms while still holding true to their brand’s values of putting people and the environment over profits. REI has been a long-time supporter of environmental conservation and donates millions of dollars annually to hundreds of local and national nonprofits that support environmental access and stewardship. This consistency and long-time commitment makes people confident that the company is acting in an authentic way.
What we can learn from REI
- Don’t be afraid to try something new and challenge cultural norms.
- You can make a bigger impact by getting other partners involved in your work.
Case Study 3 - Aslan Brewing Company: Building on Strengths and Building Partnerships
Aslan Brewing Company is an organic microbrewery in Bellingham, Washington founded in 2013. Aslan has an extensive public giving campaign -- donating to approximately 30 non-profits each month and donating around $35,000 annually.
Since 2015, Aslan has worked with local nonprofits to produce a unique beer that is sold at their bars, at stores and at a launch party. A portion of the sales from the beer are given to the nonprofit organization when they’ve sold all the beer. Generally a nonprofit will get around $2000.
“Generally we have really good feedback,” said Lousie Gearhart, Alsan’s community outreach director. “Doing this feels tangible. We can meet with a non profit, build a relationship and work with them to address a gap in their funding. We get to expand our network and share their message. Everyone benefits.”
Meeting with their non profit partners and involving them in the process is important. Wilhelm said getting stakeholders and customers involved with your corporate responsibility efforts is a great way to increase the chances that your efforts are well received.
“What we find is that often companies think they know what the customers want. In fact, we’ve found that what the customers actually want may not be the same as what a company thinks they want,” Wilhelm said. “What we find is that when people are engaged with the process, people are more willing to give a company slack.”
Since starting this campaign, Aslan has worked with 10 different nonprofits involved in a wide range of social and environmental causes. Groups they’ve worked with include Northwest Youth Services, Lydia Place, Northwest Avalanche Center and Planned Parenthood.
One of their first -- and most controversial -- partnerships was with Bellingham’s Planned Parenthood. In fall of 2017, Alsan released their “I Stand IPA” in support of Planned Parenthood.
“It was interesting because we had a lot of great feedback but also a lot of pushback,” Gearhart said. “It was one of the first opportunities for us as a business to really identify who we were and what we stood for.”
Due in large part to their community work, Aslan has been named a “Certified B Corporation” since 2016. This certification means the company has met “the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose,” according to the B Corporation's website.
So why has Aslan’s community work been so well received by the community? A lot of it has to do with the non profit relationships Aslan works hard to cultivate. By taking the time to understand the needs of their partners and involving those partners in the entire process, Aslan is able to show that it really understands and cares about its partners.
The program has also been successful because Aslan was able to give back to their community in a way that integrates their existing business model. This makes them more efficient in their giving and allows them to engage the local community in a way people are familiar with. All of this leads to a more effective campaign overall.
What we can learn from Aslan Brewing
- You can increase the chances that your corporate citizenship efforts are well received by getting your community partners involved in your campaigns.
- Find ways to integrate your corporate citizenship with your existing business model and strengths.
Corporate Citizenship in the Future
We’re in uncertain times and companies are preparing themselves by cutting away unessential expenses. This will test many business's corporate citizenship commitments
But as these case studies show, businesses should be wary of halting all of their corporate giving work because that work can have tangible benefits on the community and their bottom line.
It’s unreasonable and unrealistic to ask a small business to introduce the same kind of employee benefits package that Starbucks did, or donate large sums of money to some social cause like REI, but hopefully these case studies show that you don’t need to do those things to have a successful and authentic corporate citizenship campaign.
If a business is consistent in their efforts -- no matter how small those efforts are -- people will notice. If a business is willing to try something new while still integrating their corporate citizenship into what they do best, a business can see results. And if a business is willing to support their employees and support their local partners by getting them involved in the process, they’ll be successful.