Charitable Giving, CSR and Small Business: The Fix is In

By |2019-04-19T00:54:32+00:00April 18th, 2019|

Charitable giving, CSR and small business have been disconnected for too long. And that means that 90 million working Americans lack access to charitable giving, volunteering and other programs created to promote Corporate Social Responsibility (CSR). It is time to fix this.

As an industry, we have the knowledge, experience and technology to make this happen. And we continue to innovate. So you might say that “the fix is already in.” In fact, the future for CSR and small business is very bright. In this article, I will explain why. I will also tell you about two innovative companies helping small businesses launch new, creative and highly engaging workplace giving programs.

But as we start, attention CSR professionals and charitable giving program managers in companies of ALL sizes. I encourage all of you to read this article. Solutions targeting small business today may just be the solutions that every company is using tomorrow.

Side note: I am using the term “small business” to refer to businesses with fewer than 10,000 employees. I know, there is an entire tier of companies that we should define as “mid-sized”. I’m asking for some latitude here, and the post will explain why as we go. Thanks.

The disconnect

In corporate circles, “charitable giving” means CSR, or “Corporate Social Responsibility”. CSR emerged as a discipline in the early 2000’s. And it brought together a number of business practices including: corporate philanthropy, workplace giving, community affairs, volunteering, and sustainability. In more recent years, the discipline of CSR has blossomed via the twin towers of cause marketing (aligning corporate missions with social impact) and employee engagement (measured by the employee’s commitment to the mission and goals of the organization).

CSR and small business

But CSR has long operated in the domain of the enterprise corporation. Why?

The answer is pragmatism. CSR software did not exist, and somebody had to pay for its development. CSR programs were immature, and somebody had to invest in expertise. And beneficiaries of CSR activity (e.g. charities) needed to concentrate limited internal resources on the greatest possible returns. Ergo, enterprise companies were the natural focal point of everyone’s CSR energy.

From personal experience, almost every CSR software company I have worked with or for has had a minimum employee count of 10,000 as the target for sales activity. That target reaches only one-quarter of the U.S. workforce. In fact …

CSR efforts targeting enterprise companies of 10,000 or more employees ignore 90 million Americans working in small business!

Ugh!

The opportunity, the challenge

That 90 million working Americans number IS the opportunity. If we can reach them, we can generate more than $100 Billion for charitable causes. Think about that!

Little league and small businessThe good news is that companies of all sizes are active in their communities and contribute resources to improve social impact – what pizza restaurant doesn’t want to sponsor a Little League baseball team? Check Small Business Trend’s 10 Creative Ways that Business Can Give Back. These ideas are tailor-made for small business. In fact, companies everywhere – here’s a great story about a supply chain management company, BlueGrace – get behind causes they care about, especially where they see that their efforts directly translate into impact.

The challenge, however, is that most small businesses do not have the time or resources to operationalize CSR programs. They squeeze CSR activity into already full schedules and budgets. Most small businesses, in fact, do not even know what the term “CSR” means. It’s true! Terms like “sponsorships”, “community relations”, “day of caring”, and “giving back” resonate with small business leaders. But not the vocabulary of CSR.

Reaching small business is not rocket science. It means understanding their needs, speaking their language, and finding them in their spheres of activity. For example, you won’t connect CSR and small business at a CSR conference, because small business won’t be there. But you will find them through social media, chambers of commerce, and whole host of other mediums.

I believe that the time of the “Great Disconnect” between CSR and small business is ending.  This happens in every industry where enterprise companies are the initial sales target. Solutions scale. Software gets cheaper. Lessons are learned. And the long tail of every industry becomes profitable at some point. For CSR and small business, that “some point” is now.

What has changed?

The simple answer would be to talk about the state of CSR software, the amount of capital invested in the industry, and the consolidation of major players. We could even underscore the point by asking this question:

How much longer can the leading CSR software and service vendors chase the same 500 Fortune 500 companies?

The answer should be “no longer”. But there is more to story to share.

Some leading CSR software vendors have begun moving downstream in the market. That 10,000 employee threshold often looks more like 5,000. CSR software has gotten much better. We find improved UIs, creative program templates, better search, and impact reporting. And the better the experience with any software, the more people will want to use it.

Add to this an attitude shift in business. CSR is now good business. You can’t open a leading business publication without stumbling into CSR-related stories such as companies with a purpose, impact investing, or millennials wanting to work for companies that care.

In sum:

Society expects businesses to help improve the quality of life for everyone in our communities. And we now have the capacity – the resources, systems and willing participants – to do so.

Furthermore, small business is part of the equation. The CSR and small business disconnect is ending. What was once a gap is now being bridged. The fix is in.

Changes benefitting CSR and small business

The first cavalry to ride to the rescue of small business has been the larger CSR software providers. They invested in their own software and are scaling to reach down market. In doing so, these vendors are reaching out to you, the small business leader, to say: “We want your business.” This is a very good thing. Cavalry riders include:

  • Benevity takes its solution to smaller companies, and can offer pricing where software costs are partially underwritten by fees taken from the donation (the old United Way model).
  • Blackbaud acquired YourCause and has the potential to create a giving marketplace that will make it easier and cheaper for all donors (and their employers!) to give.
  • Salesforce just acquired Salesforce – yes, you read that correctly – in a move to consolidate company assets and improve service to the entire nonprofit sector. And those improvements will reach thousands of small businesses already using Salesforce software.
  • Fidelity created a workplace giving platform to expand its services to employers and employees.

By the way, if the above leader board of CSR providers for workplace giving programs looks unfamiliar to you, you are not alone. The market is changing … fast. And nobody will benefit more than the 90 million workers in America’s small businesses who will now have much greater access to giving and volunteering programs through work. As a benefits and employee engagement consultant mentioned to me not long ago:

The CSR landscape reminds me of the early days of the 401k. From a benefit limited to a handful of companies, 401k’s are now the norm for how we save for retirement.

So the big software companies are seeking small business customers. Good. What about innovation and new opportunities?

Best new developments in CSR

Before wrapping this post, I promised to tell you about two companies bringing needed focus and innovation to our industry.

StratusLIVE is a CRM company out of Virginia Beach, VA. Having worked with local United Ways and several very large nonprofits to improve their donor management and fundraising capabilities, StratusLIVE jumped into the world of CSR. And there are several notables about their entrance that I really like.

First, StratusLIVE is not targeting the same 500 Fortune 500 companies that almost every other CSR vendor fights over. Instead, their target is the mid-sized company. Second, instead of trying to fit an enterprise software product peg into a small business hole, StratusLIVE is delivering a “lighter weight” product that is not burdened with unnecessary features and unnecessary complexity. And third, they  provide the support that every small business needs when conducting an activity that is not their core business.

Debbie Snyder heads up StratusLIVE’s CSR business, and she puts it this way: “I’ve learned throughout the course of my CSR career that the people responsible for managing CSR programs are over-worked. Too many things to get done every day. So we are making it as easy as possible to launch your next community engagement program. The software is super easy to use, with just the features you need. Even better, we provide free toolkits, help guides and on-call support standing by. Nothing turns off a potential donor faster than a question that can’t get answered.”

RightGift is a young company out of Austin, TX with the goal of transforming the giving experience for workers in small business. RightGift provides an in-kind donation platform that is bringing innovation to an industry that has not innovated in years. Companies and charities can build wish lists in support of a favorite cause from product lists provided by leading retailers such as Target, Home Depot and Bed, Bath and Beyond. The platform simplifies both the purchasing and distribution experiences for in-kind gifts, while providing communication tools that encourage engagement between donors and the benefitting charities.

RightGift CRO, Scott Goldberg, shared this story. “We want to deliver a giving experience that fuels engagement and participation. Duet Design Group came to us to create a giving program to support a charity partner. Brent’s Place, the charity, is a long-term home-away-from-home for families experiencing a life-threatening illness in Denver. The campaign wrapped in about a week with 80% participation from Duet employees. Their generosity impacted more than 100 families at Brent’s Place. This was a big success for everyone involved.”

Better service. Greater transparency. Innovation. These are key ingredients that will help propel the CSR industry forward.

Bringing it home

The disconnect between charitable giving, CSR and small business is being bridged. Yes, we still have a challenge with the language of CSR – small business simply doesn’t use the same vocabulary. But that too will change.

More importantly, a large segment of our workforce can now be reached for workplace giving, community involvement and employee engagement.

Workplace giving and small business

And that means that a $5 billion annual workplace giving market can finally begin to tap its true potential – $100 billion or more. Think about unlocking these numbers:

  • 90 million workers
  • 30,000 businesses with 500 to 10,000 employees
  • Average annual giving of $700 per donor, versus an average gift of $80 generated on a charity donation page
  • Matching gifts offered by companies as incentives for employees to give

We have experienced players in the market extending their reach. We have new capital focused on the long tail of the market. And we are seeing innovation the likes of which we have not see in years. The fix is indeed in.

And the future for giving is bright!

If you would, please share this post with a colleague … especially a small business.

And if I have overlooked your company’s contribution to bridging the CSR gap for small business, drop me note and tell me about it. I would welcome the opportunity to follow up this post with more good news.

Thank you for reading!

 

 

About the Author:

A Principal at CSR Matters, Gary has 25+ years of experience working in Corporate Social Responsibility, including nonprofits, software development and the financial services industries. "It's a labor of love. I have a number of professional interests, and they all intersect with CSR." Over the past several years, he has been actively involved in the acquisition, growth and consolidation of a number of companies in the CSR space, including AmeriGives, Good Done Great, WPG Solutions, and Dexterity Ventures, plus donor advised funds DonateWell and Place2Give. Gary's prior experience includes leadership positions with Bank of America, United Way and KindMark. To learn more about the breadth and depth of Gary's operational, financial and executive experience, please visit https://www.linkedin.com/in/gpfcarr/.