GE Citizenship

Expert Perspective: A Business’s Contract With Society

Charles Moore
Executive Director, Committee Encouraging Corporate Philanthropy

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A corporation’s community engagement starts with the understanding that business has a contract with society. Working off of this premise, it is easy to integrate corporate philanthropy and cross-sector partnerships as part of business strategy. A business’s role is to be as active as it can in the community that it depends upon.

There are three levels of engagement that companies have with society. The most basic level is what a business has to do — for instance, paying its taxes. The next level is what it ought to do. This means taking care of its workforce and the environment. And the third level involves the things that businesses can do. It is this “frontier” space in which corporations are most innovatively building partnerships in their communities for sustainable social investments. Philanthropy, after all, is really just a measure of corporate behavior.

Corporations are at their best when they use all of their resources — money, product, employee expertise, etc. — to be 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. Donations are extremely important, but capacity-building and skills-based volunteering are also important for non-profits and are unique to the corporate community.

Today, the expectations for corporate philanthropy are rising. The economic downturn is going to threaten both the operational support of non-profits and their programming. While it’s easy for companies to invest money in good times, the real mark of leadership comes when times are tough. Studies show that consumers and other stakeholders will insist that companies continue their community investments at this time of need.

This is a defining moment for the corporate sector to step up and maintain their giving. Simultaneously, businesses must step back and assess the changing needs in their communities.

As corporations take stock of their communities’ requests, as well as their own access to funding, businesses need to be creative and consider in-kind donations and other innovative opportunities for effective non-profit partnerships. It will be important that companies communicate with their partners and involve them in thinking about how to do more with less.

This is a great opportunity for companies to build stronger, more effective relationships with their partners.