A 2014 Nielsen Survey says, "Fifty-five percent of global online consumers across 60 countries say they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact." That means it is easier to grow and scale your business if you are connected in some way with creating social change. Social responsibility increases your bottom line.
Social Responsibility Models
Corporate Social Responsibility (CSR) has become the new norm for business. Not only do consumers want it, but according to a Deloitte survey, 70 percent of millennials listed their company’s commitment to the community as an influence on their decision to work there.
In the corporate world, social responsibilty is more than just traditional philanthropy, such as raising money to support a cause. Authors write in Harvard Business Review that there are 3 types of CSR, which they describe as "theaters." These models can also apply to entrepreneurs.
Theater One: Focus on Philanthropy
Programs in this theater are not designed to produce profits or directly improve business performance. Examples include donations of money or equipment to civic organizations, engagement with community initiatives, and support for employee volunteering.
Theater two: Improving Operational Effectiveness.
Programs in this theater function within existing business models to deliver social or environmental benefits in ways that support a company’s operations across the value chain, often improving efficiency and effectiveness. Thus they may—but don’t always—increase revenue, decrease costs, or both. Examples include sustainability initiatives that reduce resource use, waste, or emissions, which may in turn reduce costs; and investments in employee working conditions, health care, or education, which may enhance productivity, retention, and company reputation.
Theater three: Transforming the Business Model
Programs in this theater create new forms of business specifically to address social or environmental challenges. Improved business performance—a requirement of initiatives in this theater.
These so-called "theaters" can overlap. The key to running CSR effectively, says the HBR, is to run each theater with only those programs that align with your core business. For example, a food industry can operate a program that provides extra food to a food pantry.