Why Corporate Social Responsibility spending does not equal improved social outcomes

AUTHORS: Rosemary Maguire and Joanna Allan.

Corporate Social Responsibility (CSR) programmes now seem ubiquitous among corporations. Many claim to put communities first, trumpet their own contributions to environmental sustainability, and attempt to convince us that they have a wider social and “do-gooder” purpose, beyond that of merely pursuing profits. Yet few corporations reveal exactly how much they spend on CSR. Cynics would argue that transparency is avoided to curb criticism of how minimal CSR spending is in comparison to net profits.

Few corporations measure the impact of their funding on the communities in which they invest, and fewer still publish information on measurement and impact. As NEF Consulting’s Managing Director, Graham Randles, pointed out in The Guardian recently, if corporations do not measure what their funding has achieved, they cannot realistically know whether or not they are supporting positive change.  Indeed, corporate profits and social and environmental welfare are often in direct opposition. Corporations, their stakeholders and the general public should not therefore assume that CSR spending equals improved social and/or environmental outcomes. Before blowing their “altruist” trumpets, corporations should be held to account on their CSR programmes and prove that they are working.

Given the lack of importance traditionally afforded to measuring outcomes in CSR programmes, NEF Consulting were delighted to be commissioned by Lloyds Banking Group to evaluate their 2012 Community Fund, measure its impact and make recommendations for increasing the impact of future programmes. NEF Consulting’s research reveals the importance of small grants for creating individual change within communities, shows the achievements of the Lloyds Banking Group Community Fund, and creates a baseline  for future measurement of the  Fund’s impact. Going beyond a statement of where and on what the funding was spent, Lloyds Banking Group can now state with confidence what changed in the communities as a result of their support. Any other corporation that is serious about creating positive change should also, at the very least, measure the impact of their spending. Ideally, of course, such corporations would also measure their impact globally, acting to mitigate any negative effects and using CSR spending to expand positive benefits beyond local communities.

RoseeRosemary Maguire has extensive experience in providing clients, including local authorities, NHS organisations, national and local charities with bespoke outcome measurement frameworks and evaluations of their work. She leads on NEF Consulting’s research into education, skills and public health. Her interests lie in supporting organisations to understand how their interventions can create the building blocks of change in the lives of citizens, and how this can be effectively measured and communicated.

Joanna Allan is an associate of NEF Consulting.