When any company enters a community, it creates jobs and pays taxes. The resources that good companies invest in operations, workforce development, pro bono work, partnerships with local organizations and philanthropy have the potential to improve quality of life and build community capacity.
Community factors such as quality of life, community reputation, standard of living and the potential for economic development are important considerations for any company. The company, however, must be an active participant. Since a company’s workforce and operational strength depend upon the economic and social health of its communities, this relationship is mutually reinforcing. More than ever, a company’s strength depends on the health of the community in which it operates.
Corporations are becoming particularly concerned with the health and sustainability of integral societal systems, such as education and healthcare, and are looking for the opportunity to support these systems by leveraging their own skills, talents and core business strengths. These targeted investments will become increasingly important given the current economic downturn and the potential for impact on the socio-political structures designed to ensure healthy social systems.
The Committee Encouraging Corporate Philanthropy (CECP) recognizes three levels of engagement that companies have with society — what corporations have to do, what they should do and what they can do. It is companies who engage fully at all three levels that have the greatest impact.
“Corporations are at their best when they use all of their resources — money, product, employee expertise, etc. — to be a part of the solution. Individuals and foundations may also have access to cash grants, but corporations have the power to effectively integrate a variety of assets for community benefit.”
— charles moore, executive director, cecp
“Having a GE manufacturing facility in an area means that the company will look after the environment and make sure employees are taken care of. In countries such as ours, where there is an enormous amount of people who don’t hold formal jobs, that’s a huge issue.”
— josie jardim, general counsel, latin america, ge corporation
Direct Corporate Impacts
When a quality corporation with strong values moves into a community, the changes ripple throughout the surrounding business landscape. Josie Jardim, General Counsel in Latin America, GE Corporation, says she has seen a marked change in the cities where GE has presence in Brazil as a result of GE’s local operations. To begin, community members who become GE employees are given a virtual “life upgrade,” with access to decent wages, medical benefits, pension funds and labor rights that not all other members of their community enjoy. In addition, GE’s stringent environmental, health and safety processes help create safer workspaces for these employees.
A wider impact of GE’s operations in Brazil is the raising of the “ethical bar” in the community. By bringing solid standards of compliance to business relationships, GE helps create new expectations for doing business well and is helping to develop better business environments there and wherever it operates.
These impacts are especially significant in an economy such as Brazil’s where the formal employment sector, and the coinciding processes and standards, is in rapidly advancing stages of growth and development. Jardim says that GE’s employees are proud to work for an ethical company. She also attributes recent advancements in the region to area multinational companies investing in maintaining Brazilian national talent in key leadership positions.
Companies should also acknowledge the impact reducing its operations will have on the community. Business cycles shift over time, requiring shifts in production or productivity to meet customer and market needs. By coordinating closely with community and business leaders, the impact of dispositions and restructurings can be mitigated through training and other benefits provided to the business.
“The social contract is changing the role of business, government and civil society — issues that were outside of the role of business are now whiting the expectations of engagement.”
— Brad Googins, Executive Director, Boston College Center for corporate Citizenship
Expectation Of Employees And Other Key Stakeholders
The level at which a company engages in purposeful and strategic corporate community investment is reflected in the expectations of its stakeholders — such as employees, customers, investors and community organizations. Society in general is strengthening its belief that companies can and should be engaged alongside other stakeholders to address the pressing issues of the day. For the Center for Corporate Citizenship at Boston College, this changing set of expectations signals a new priority for businesses.
Enlightened self-interest is how Carolyn Pereira of the Constitutional Rights Foundation Chicago (CFRC) describes the mutuality of these relationships. She frames her thoughts in terms of investment in education: a business needs to have good schools in the area for its employees’ children to attend; local school children in turn are a pipeline of future employees, and the health of local schools reflects the health and safety of the community. If a dysfunctional school system reflects a community in which a business will have a hard time operating, the business’s investment in the school system is an investment in a strong operating environment.
Working with the CRFC, GE Foundation is again creating alignment between monetary and skills investment in a community. In schools throughout the Chicago metropolitan area, lawyers spend time in classrooms to teach young students about the rule of law, using new learning toolkits funded by GE Foundation. These volunteer hours impart real world learning and connect students with adults otherwise outside of their spheres of interaction, widening GE’s impact and the students’ experiences.
“Businesses need to assess the needs in their local communities so that they can interact with them in ways to determine what skills the company has that fit these needs.”
— brad carolyn pereira, executive director, cfrc
Corporations must also be able to adjust to the current economic times. For example, GE Foundation has announced that it will direct more than $20 million in funding to food and shelter organizations responding to the impact of the economic downturn. Focused on addressing basic needs, these organizations continue to experience significant increases in demand without the proper funding to keep pace with the need. One key component of this re-direction is the decision that the GE Foundation gift to the United Way come with assurances that this allocation be dedicated exclusively to food, shelter and related services.
The Power Of Partnership
Finding partner organizations that can maximize corporate investment is an important component to strategic community development. While corporations can provide much needed financial, human and infrastructure capital, the right partner organization can have the skills and relationships necessary to make the most of that capital investment. Kumi Naidoo, of CIVICUS in South Africa, encourages “mutual ownership” of a community building relationship, in which community members can expect corporate investment and corporations can expect community sweat equity in return.
Corporations can also partner with community organizations for the sole purpose of making those organizations more effective. Many community organizations do not have the leadership and training resources a corporation like GE has to offer its employees, specifically in the areas of financial, human resources and change management. By investing directly into building the capacity of these organizations, by providing them much needed operational support; corporations increase the impact of these organizations on their own constituencies. One example of this partnership is the engagement between the GE Transportation information technology team and the City of Erie School District. The GE IT team helped the district take their previously paper driven processes for attendance, grading and scheduling online to improve efficiencies for teachers, principles and parents.
“The value of a corporation in a community is not just conventional capital; reputation and relational capital are very important too.”
— Kumi Naidoo, Honarary President, Civicus
Pro Bono Alignment
Pro bono investment, in which professional services like those described above are made available to organizations serving the public good, is one of the most effective methods of creating positive change, both for the target organization and for the employees of the corporation.
Employees are encouraged to offer time and skills to an organization in a targeted and ongoing relationship develop a deeper sense of respect and appreciation for their employer.
Companies and communities also benefit from aligning their business strategies with community needs, and in doing so, expand the impact of their corporate philanthropy, reinforcing the skill sets important to their employees’ success. This alignment creates more effective longer-term relationships with the beneficiaries of their investments.
An example of this alignment is the GE Foundation Developing Futures™ in Education, a $150 million investment in selected school districts throughout the United States to improve math and science curricula, improve collaboration, provide teacher professional development and improve student achievement. In addition to the financial investment, GE employee engagement is a critical part of this program. GE leverages its core skill sets and employee expertise to provide myriad of improvements to the school districts.
For instance, in Cincinnati, Ohio, a GE facilities manager acted as a pro bono consultant to the Cincinnati Public Schools on a project to rebuild or refurbish 51 schools. Through his knowledge of process, he was able to standardize building plans, initiate a bulk-purchasing program and coach school district facilities managers. Under his guidance, the school district saved more than $12.5 million on the project. The integration of capital giving with targeted employee skills sharing creates a greater level of change than is possible with only a monetary gift.
Looking To The Future Of Community Investment
A corporation’s greatest impacts are directly tied to its strengths and how companies partner to address community needs. In challenging economic times, community building activities are both more important than ever and increasingly harder to commit to. Leadership companies will continue their commitment to building community capacity as part of their business portfolio, seeking to maximize their impacts by using their strengths and the alignment of those strengths with community need.
Through its core values and company culture, GE continues to commit to operating with integrity, building longer-term partnerships and continuing its dedication of skilled employee volunteers. While this level of corporate involvement may not be new in many communities around the world, the partnership of investment capital and pro bono employee expertise is creating both new value and stronger community building efforts by companies in partnership with the people who live and work where they operate.
