Giving Thoughts

The Impact-Aspiration Gap: Why Companies Aren’t Living Up to Their Own Ambitions

By Richard Hardyment, Associate Director, Corporate Citizenship

How many businesses can claim to be making a real difference in their communities? If you take a look through any Corporate Social Responsibility (CSR) report, it’s filled with bold statements about “transforming lives” and “scaling impact.” However, the reality—according to new research from Corporate Citizenship—is that there’s a big gap between aspiration and impact.

Corporate Community Investment (CCI) has grown rapidly in recent years. Many more businesses are giving philanthropic donations, running employee volunteering programs and making in-kind contributions, such as product or facilities. The latest LBG Annual Review tracks over $3.6 billion into community activities by 173 companies. Giving in Numbers, published by CECP in association with The Conference Board, reports similar growth.

The impact-aspiration gap

For our latest research, Corporate Citizenship wanted to better understand what’s really going on behind the scenes. The results make for some startling reading. Over 130 corporate responsibility and sustainability practitioners were engaged around the world. We asked them about their programs, aspirations and impacts.

A massive three-quarters of company representatives said that they aspire to achieve long-term impact with their CCI. However, fewer than one in four currently feel that their organization is delivering on that promise. It’s a huge gulf—something we call the impact-aspiration gap—between what business aspires to do and is really delivering on the ground. Critics might say companies are failing to live up to the hype that they create by marketing CCI efforts. That should make management sit up and worry.

Understanding and closing the gap

Two big questions arise. What’s causing this massive gap? And how can we close it?

Our study reveals several clues to the causes. Fewer than half (44 percent) of organizations said that they are measuring their impacts in the community. An even smaller proportion (28 percent) is trying to work out the benefits to the business. As companies that are members of LBG often tell us, making sense of impact is essential to delivering effective programs. Most businesses simply haven’t put in place the right systems to capture the change that they are creating. We also heard that a lack of clarity over what to measure, and a perceived lack of resources, both create additional barriers to effective measurement.

So how can we close the gap? All organizations need to start with some searching questions about how best to approach CCI. What can realistically be achieved given the available budgets? How ambitious do we want to be?

Our new report—Hard Outcomes or Hollow Promises—sets out out our I.M.P.A.C.T. approach to getting to grips with the issues:

• Intent is about setting clear objectives
• Map means understanding what’s currently going on
• Plan requires setting the right measurement framework
• Act involves carrying out the calculations
• Consider means analyzing and interpreting the findings intelligently
• Tell is getting your message to the audiences that matter.

It’s all part of a broader research program we are undertaking in 2016, looking at the impacts of companies on society. One of the key insights to emerge from Impact for Change, a Corporate Citizenship program that helps companies measure, communicate and improve on their impacts, is that numbers don’t matter on their own. It’s what you do with the insights that really counts.

Strategic philanthropy means investing resources where corporations can genuinely make a difference. But impact cannot just be a buzzword. It requires measurement of long-term change.

In a world where more and more firms are making bold assertions and producing glossy reports, having tangible and concrete data on impact has never been more important.

About the author:

Richard Hardyment is an Associate Director and Head of Research at Corporate Citizenship, a global management consultancy specializing in responsible business and sustainability. A copy of the new report can be downloaded from www.corporate-citizenship.com