CORPORATE SOCIAL RESPONSIBILITY

Why it makes sense to set up a foundation

In Summary
  • Creating a lasting positive impact on society matters more than the profits that a firm may make
  • To achieve sustainable development, a foundation CSR strategy should be drawn to meet publics requirements

In today’s era, corporations that invest in Corporate Social Responsibility improve their reputation and brand visibility. Indeed, an entity’s brand’s reputation can only benefit from charitable deeds from the communities its operate in.

It has been proven that people appreciate when they deal with entities that are helping the communities in which they operate. Further, to achieve sustainable development corporate entities must invest in a proper CSR plan. It is with this thinking that has seen most corporate entities accelerate charitable plans within communities they operate in.

Undeniably, CSR has become a crucial facet of corporate entities development plan objectives. In Kenya, the aspect of CSR is gathering momentum unlike before and most entities have realised the need to give back to society.

The advantages of CSR are many, including helping organisations in impacting on their reputation and brand positively. Additionally, giving back to society helps in fostering development as well as good relationships. However, for CSR to be successful there is need for organisations to formulate a deliberate strategy that informs the implementation of CSR programmes.

Further, sustainable CSR, which has now morphed into Corporate Social investment, demands a critical appreciation and understanding of the key issues that affect communities within which they operate and offer solutions that give them hope.

Corporates must meaningfully engage as they direct their social investments to such issues sustainably and in line with their strategic configurations. The impact on education, health, infrastructure among others should be key considerations in an organisation’s strategic vision.

Creating a lasting positive impact on society matters more than the profits that a firm may make. Consequently, entities need a more organised vehicle to drive this strategy. It is this thinking that has driven several entities to establish foundations whose sole goal is to drive their CSR agenda.

Certainly, foundations accelerate investments to communities and the impacts are usually huge.  Further, foundations are critical for effective and centralised philanthropy. It is a vehicle that allows organisations to have an organised, systematic and targeted charitable activities.

Moreover, it helps in enhancing company image since foundations are in most cases named after the company’s name. A foundation’s charitable activities positively impact on the company image leading to increased loyalty and creating new business opportunities. Indeed, communities continue to give positive feedback about organisations because of the charitable activities undertaken in their communities.

Besides, foundations enhance giving options for corporates by allowing a broad latitude to pursue other activities that advance a charitable purpose such as making grants for disaster relief and economic hardship and setting up of scholarships and award programmes and selecting recipients among other activities.

Additionally, apart from achieving sustainable development through a foundation, in a well-executed CSR strategy, the government becomes a secondary beneficiary of CSR as this lessens its burden for responding to a wide range of issues for communities.

Thus, for companies to achieve sustainable development through CSR it is imperative to establish a foundation.

Through the foundation, a corporate entity should have a consistent strategy and specific annual budget amounts for CSR projects. CSR should be the product of a planned strategy, rather than occasional charitable activities. Also, a foundation will allow a corporate entity to source for more resources externally to support its CSR agenda which would not be possible if done directly through a corporate entity.

To achieve sustainable development, a foundation CSR strategy should be drawn to meet publics requirements. Formulating and implementing CSR strategies should be a more proactive, rather than a reactive process. The foundation must follow the cardinal rule of a winning strategy.

A foundation helps by reducing costs and risk while maximizing profits and competitive advantage and overall increasing reputation and legitimacy and creating synergistic value for an entity. Thus, for CSR to be employed as a strategic tool, it is important to institutionalise it within a Foundation.

Significantly, sustainable CSR can easily be achieved through a foundation. This is because sustainability demands that firms should prioritise increased and high-level accountability and transparency not only with the key shareholders but the community at large.

Such candidness is easily achieved through a foundation appropriately, in partnership with the community and stakeholders. A Foundation must respond sustainably to potential environmental and health hazards associated with the business since it is much easier to communicate the impact of the business to the society, without having to justify your existence in times of a crisis.

Communication specialist and Certified Public Relations Analyst