Is a nonprofit socially responsible because it serves the public with a mission to resolve a social issue?
At first blush, it would seem so. After all, our knee jerk reaction when we think about social responsibility programs is that our businesses must do something externally in our communities by philanthropic measures. And, since nonprofits by their very nature are already reaching out into their communities, they have checked the box. But, have they?
Let’s go back to the drawing board again and revisit the basic elements of a social responsibility program, corporate or otherwise, which combines internal and external measures that focus on:
-Responsibility - for our effects on the environment and the well-being of others
-Sustainability - by leaving a lasting and healthy legacy to future generations
-Values based - a strategy where all stakeholders are treated ethically and responsibly
Most of these elements are targeted to how we run our companies and how we impact the entire ecosphere surrounding the business. The three “P’s” of corporate social responsibility in the for-profit world are people, planet and profit. Does this definition differ for nonprofits since by their very nature, they are not generating a profit?
I would suggest not. They still are still attempting to generate the most income possible whether through donations or grants to invest in their outreach programs. They still have stakeholders (employees, volunteers, donors, vendors etc.) they are responsible to, in addition to the populations they serve. They still need to be conscious of the environmental footprint they leave on the planet. They still need to create organizations that are sustainable and able to weather the ups and downs of the market.
In either case, both types of organizations are entrusted with funds, whether from donors or investors, that need to be managed wisely and conscientiously so that they return the most bang for the buck. And like for-profits entering the world of social impact, nonprofits are now waking up to the fact that they will need to manage a delicate balance of stakeholder expectations: mission first versus socially responsible behavior. This is not unlike for-profits who face shareholder expectations of profit first versus social responsibility.
The focus is shifting outward for the for-profit world as they wake up to the fact that the nonprofits, previously anointed the problem solvers for all social problems facing our world, simply don’t have the manpower, funds or complete skillsets to stay ahead of the curve. They must step in and help as global corporate citizens. And, they must ‘walk the talk’ of conscious leadership, focused on the best interests of all their stakeholders, internal and external and our environment even as they concentrate on a strong return to their investors.
The focus is shifting inward for the nonprofit world. As consumers and donors become more conscious and have immediate access to information and resources on the internet, the nonprofits are facing scrutiny about the way that they run their operations and use the funds that have been given to them by people connected to the cause. These hard-earned funds come from individuals and companies who expect them to be used wisely by the organizations they choose for the causes they align with. Efficiency is key, measurement and reporting are more important than ever, transparency is paramount.
So, what are some of the benefits to a nonprofit to have a robust social responsibility program, one that looks internally rather than just externally to its service initiatives?
1. Organizational value creation increases public trust and enhances reputation
2. Increased stakeholder engagement/loyalty of employees, volunteers and donors
3. Spillover effect to partner agencies
4. Green initiative savings equals more fund s for programs (community currency)
5. Strong compliance programs within the sector reduce instances of fraud
6. Development of sensitivity towards problems that impede organizational sustainability
7. Social responsibility programs keep organization current and relevant to society
8. Recruitment tool for new workers expecting cultures of innovation
9. More competitive for funds when viewed as best in class
Social responsibility within all of the sectors has now become the norm, not just a nice to have. By 2020 more than 50% of our workforce will be comprised of new generations who have a heart to serve but are finding new and imaginative ways to fill this need. They are creating new social purpose companies (i.e. benefit corporations) and large social media driven movements pushing for positive impact. If nonprofits don’t jump on board of the social responsibility train, they may be left at the dock.
The times are changing, the hallmarks of the sectors are beginning to get blurry as their roles begin to overlap into each other’s space. The gauntlet has been thrown by the marketplace. Will it be picked up?