In a recent article on the Huffington Post website, Stanley Litow offered his thoughts on how corporate responsibility and business strategy should be woven into an integrated approach to make the world a better place.
Litow, who is Vice President of Corporate Citizenship & Corporate Affairs for IBM, believes that a corporate culture of service can transform the communities in which companies do business, in turn affecting the wider, global community.
“We know that smarter cities are the keys to building a smarter, global society,” Litow offered. “We know that small businesses grow revenue by 250% and increase hiring by 100% within two years of landing a contract with a large company. We know that we can break the cycle of poverty by making quality education accessible, relevant and focused to prepare graduates for real jobs. We know that volunteering our skills—instead of just writing checks—enriches the ecosystem of our economy as it cultivates the next generation of our global leaders.”
The topic of corporate social responsibility has recently been discussed in numerous articles like Litow’s, as well as at recent forums like the Better Business Bureau Forum on Corporate Responsibility V, held last month in New York, which offered corporate responsibility topics and trends to leaders from such companies as American Express, Ernst & Young, Campbell Soup Company, IBM and Time, Inc.
Why the recent focus on charitable giving? It may be that corporations are only now understanding just how important social responsibility initiatives are to creating superior business performance. Employees are devoted to many causes and want their companies to be, too.
Yet, according to Charity Navigator, America’s largest independent charity evaluator, of the $298.4 billion that was given to charitable organizations in 2011, only $14.5 billion—just 5%—came from corporations.
It is a completely different story for companies in the direct selling industry, where nearly three in four direct sellers—a whopping 72%—support philanthropy activities.
Giving back to communities? Providing quality education? Volunteering skills and time? Direct sellers have been integral partners of local, national and global organizations for decades, from feeding hungry children around the world to campaigning against domestic violence to supporting breast cancer research. Many direct selling companies have been founded on a culture of service, with two in five companies (38%) involved in charitable activities since their founding.
According to a 2009 WFDSA Direct Selling Worldwide Corporate Philanthropy Report, direct sellers gave an estimated $336 million in 2008, which represented a 28% increase from 2007.
In 10 countries—Brazil, Canada, Japan, Mexico, Russia, South Korea, South Africa, Taiwan, Thailand and the United States—77% of direct sellers contributed money, goods and services to human services and charitable organizations.
How do direct sellers give back to their communities? Nearly 96% of direct sellers supporting charities make cash donations, 73% make in-kind services donations, 58% donate time (employees and salespeople), 54% sponsor charitable events, 53% donate a portion of sales proceeds from a product, and 31% match a pre-set percentage of donations by employees and salespeople.
If corporations today are searching for business strategies that incorporate social responsibility into their corporate structures, they should look to the direct selling industry for guidance.