The term Corporate Social Responsibility (CSR) is becoming more and more common in the business community, but often there remains a question as to what it means. There are a lot of definitions. Some of them speak to the awareness of what we buy and how it is produced in the wake of increased globalization. Often it refers to the responsibility of companies to help make our communities better places to live, work and raise families.
Many companies and organizations, large and small, take social responsibility very seriously. In fact, it is beneficial for businesses to help fill in the gaps in our society. After all, it is that community that will help to make those businesses and organizations thrive or fail. So in some respects, social responsibility is self-serving. Some companies would argue that it is essential. It has taken the business community many years to realize that being more conscious about the world around us adds to the bottom line and is a win-win for all.
It’s not easy for businesses to automatically become more socially conscious in a way that transforms into their business model. It’s more than simply writing a check. It involves taking an active role in helping to improve the communities that the businesses and organizations serve. Working to revitalize neighborhoods, assisting those in need, supplementing educational opportunities for students and teachers, taking proactive steps to improve a cause or issue – these are just some of the many ways that companies can begin to make a difference. Prioritizing volunteerism and making it a core part of a company’s culture is another way businesses can give back. Often volunteering is something that employees do outside of work. However, some companies are placing a value on that volunteer time – providing employees with time to volunteer during the workday.
For example, Berkshire Bank offers employees 16 hours each year of paid time to volunteer through a corporate volunteer program that we call the X-Team. Yes, that initially costs the Bank money, but its impact on employee engagement, skills development and other business goals generate a significant return on investment. Not to mention the good will that it generates for the Bank. In the long run, Berkshire Bank, and other companies like them are measured not just by the services they provide to their customers, but also how they contribute to the community. Stakeholders expect a company to be socially responsible, and many people will choose not to or to do business with a company because of its social reputation. Additionally, employees prefer to work for a company that gives back to the community. As a result, they are happier in their jobs and more likely to stay in their positions longer, thereby saving the company money in recruiting and training costs.
Another reason companies might embrace social responsibility is brand differentiation. The competition is brutal for companies to be recognized as the best at what they do. Constant jockeying takes place to be different in the marketplace. That’s why we have just about every flavor of ice cream, potato chip and cereal. The drive to be unique increases immensely when providing a commodity, such as financial services. Linking your product to a cause that pulls at the heartstrings of your customer base is one way to differentiate without burning out the members of your product development team. This works especially well when customers feel like they’re part of the process. By joining with you, they are making a difference. And if you're a nonprofit in that realm, you want to be the organization with which they partner.
While many businesses embrace their responsibility to invest in the community, CSR works best when its core part of a company’s culture and is a key component to and measurement of success. Having the right people and choosing an issue to address that is connected to your business, coupled with strategic planning, will ensure your effort to give back blossoms into a reputation as a valued corporate citizen, which will pay dividends well into the future.
Lori Gazzillo is Director of the Berkshire Bank Foundation, a position in which she oversees the Bank’s community investment initiatives including Foundation grants, the Volunteer program and Scholarship Program. She serves on the Board of Directors of the Berkshire Chamber of Commerce and Associated Grant Makers of Massachusetts.