How Do You Measure Your Company’s ROI in the Community?

Businesses are always asked to report on their Return on Investment. Whether a company is rolling out a new product, hiring additional team members, or restructuring a department, it needs to present the ROI to prove that it’s worth the company’s investment in time and resources. And yet, there appears to be one exception to the rule: when it comes to supporting or “giving back” to the community, more often than not, companies do not have a defined ROI.

SHG Advisors was recently engaged to conduct a survey to understand how companies “give back” to their communities. We are helping our client launch its own Corporate Social Responsibility (CSR) program and the client wanted to better understand the benchmarks established across the private sector. The most surprising revelation from the survey was that, when asked how the respondent’s company defines the impact it is seeking to make in the community (an open-ended question), nearly one-third of the respondents indicated that their companies haven’t defined the impact or established indicators. Most of the companies that did respond said that it is simply defined by how much money is given away, or the number of hours that are volunteered. Given the number of companies that have some kind of community giving program, whether that is pro bono projects, board placements, or a formal CSR program, it is surprising how few have thought about how to demonstrate the value of their efforts.

Points of Light and Bloomberg recently released “The Civic 50: Best Practices in Corporate Community Engagement.” Companies selected were based on four dimensions, one of which was impact. “Impact” was defined by three key performance indicators: community impact, employee engagement and company reputation. SHG Advisors and our client have embraced this definition and are challenging other companies to define corporate social responsibility beyond the number of volunteers, number of hours or grant dollars. Define your ROI – your outcomes – and you’ll have a much more robust and targeted program that “gives back” and demonstrates your internal and external values.

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