Profit with Purpose: We call it Shared Value

Impact Development
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The concept of creating shared value has been heavily explored over the last few years, engaging the conversation of doing good while doing good business. What is shared value and how can it impact how you operate at the intersection of profit and purpose. Let's explore how one organisation, the Sage Foundation is doing it.

The impact of the global pandemic has been engaged through various lenses, including that of the economic impact on women, small businesses and the imprint of digital transformation, and national government preparedness and response strategies on what has been a turbulence that has resulted in a loss of life, funds, and intensified public sector engagement and call for collaboration. A new lens engaged by the Sage Foundation, spotlights the impact on over 4000 businesses, its leaders, and employees, and how they have and are driving and thinking about corporate philanthropy.

In their Harvard Business Review essay entitled “The Competitive Advantage of Corporate Philanthropy”, scholars, Michael E. Porter and Mark R. Kramer excellently paint the inception of the term, how the business practice has evolved over time, and the (potential of the) value created from strategic, focused corporate philanthropy and how it can drive company competitiveness beyond the outlook of charity. One of the latter arguments that the essay makes prominent, is the obscene vapidness that the true aspiration of this business engagement loses itself to, resulting in this chilling statistic from the People Powering Change Report by the Sage Foundation on the effect and residue of the pandemic, and that is how businesses’ engage in philanthropy, with 64% reporting that funds for corporate philanthropy have already been cut – or will be cut in the coming 12 months.

But what if corporate philanthropy wasn’t a charitable drive? Instead, an opportunity to invest in not only the public image of the company, but to strategically support the business’ bottom line and how it contextualises its corporate social responsibility to strengthen its competitiveness for its engaged stakeholders.

“My company encouraged volunteers to assist individually in their local communities. People also opted for money donations as opposed to the usual giving of time. My organisation matched the money donations received.”

At the end of 2020, the Sage Foundation commissioned Kantar, a leading  data, insights, and consulting company to conduct a global study of business leaders and employees on corporate philanthropy and its current state. The findings of the report were anchored on unpacking the influence of the COVID-19 pandemic on corporate philanthropy, to challenge the relationship between purpose-led businesses and engaged employees, and to standardise the various four markets (of Sage) in South Africa, United Kingdom, United Sates and Spain. Here is what the report has informed us about corporate philanthropy:

  1. COVID’s Negative Impact on Corporate Philanthropy Investment

For corporates, the impact of the pandemic has been felt mostly by the Corporate Social Responsibility (CSR), Corporate Social Investment (CSI), and Socio-Economic Development (SED)  departments, often observed through the singular lens of expenditure and non-revenue generating business activity. As such, the study reveals that 64% of the interviewed business leaders believe that COVID will impact on their businesses’ ability to invest in corporate philanthropy in the long term, and as a further consequence, 49% of the business leaders believe the ripple effect of reduced investment will cause a delay in progress being made against reaching the UN Sustainable Development Goals by 2030.

Where does your company stand?

In South Africa, according to the latest data published by the latest Trialogue Business in Society Handbook, corporate philanthropy investment grew by a marginal 1,2% in real terms from R10,2 billion in 2019 to an estimated R10,7 billion in the 2020 financial year.

  1. A Company’s CSI Engagement Matters

Who engages on the billions of dollars, globally, that companies invest in? One of the 4000 group of stakeholders that the People Powering Change Report by the Sage Foundation engaged, was socially responsible employee. Globally, 58% employees referred to an organisation’s commitment to corporate philanthropy being a priority to choosing the company that they end up working for; and even through 2 out of 3 businesses do not offer volunteering opportunities to their employees during paid working hours, 1 out of 3 business leaders have felt the increased pressure from their employees since March 2020 to support the local communities.

“Great Management that gives the right level of autonomy and support. Great tools that allowed me to do onboarding remotely, great culture of the company that communicates a lot, and Sage Foundation is the cherry on the cake. Very happy to be part of this great company.”

  1. The Opportunity to Redefine Corporate Philanthropy

For the Sage Foundation, their 5 paid volunteer days provides the business with a differentiator for their talent acquisition attraction strategy, a context-based objective that participates in the broader purpose-led business agenda of Sage.

Financial services company, Investec’s CSI strategy engages through the lens of education and entrepreneurship as they see these two pillars being “critical to creating employment and socio-economic growth in South Africa.” During the pandemic, Investec invested their corporate philanthropy through the Solidarity Fund, the YES programme with 1440 interns receiving funding and for entrepreneurs, supporting Uconomy.

“Sage Foundation is excellent -5 days a year each for everyone to give back to our charities and communities is great. This is only part of a good benefits package you get for working at Sage.”

The rise of smartly investing in corporate philanthropy, paired with the commitment to SDGs and strategically engaging with stakeholders like employees and investors, enlightens us how far the school of CSI thought has come. A business led by operating with purpose at the center, with an inclusive and diverse way of consulting is sure to grab the opportunity to redefine how it innovatively engaged in corporate philanthropy, and not just for the community it aids, but those who can volunteer their time and money.


In Conclusion

“Employees are keen to keep their commitment to volunteering despite the global health crisis with almost all (97%) employees saying that disadvantaged people and non-profits needed support now more than ever due to the pandemic. Over half (57%) go even further than that and say they would volunteer their own time money to the organization or initiative that their company supports.”

From the People Powering Change Report and the case studies provided, it is clear that corporate philanthropy’s role and impact is well understood and articulated by stakeholders involved and engaged. It benefits the company’s triple bottom line, provides an elevated attractiveness and competitiveness from a talent acquisition and retention strategy, and introduces capabilities of strategically and smartly investing in company growth.

Does your company care, how does it engage philanthropically? As an investor, employee or business leader, does this matter to you?

I’d love to hear from you!


Vuyolwethu Dubese