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Seven Levels of Corporate
Philanthropy
Making Money While Making a Difference
by Richard Barrett |
Wherever you look in America you will find more and more companies making some form of contribution to society. They have discovered that making money and making a difference are mutually supportive goals. In 1995, when I began work on my new book, Liberating the Corporate Soul, I started with the thesis that the most successful companies over the long-term will be those that could be characterized as socially responsible. I was not disappointed with my research results. The more I looked into the issue, the more evidence I found to support my thesis: when companies care about their employees, the local community and society, their employees, the local community and society care about them. The dynamic that I was measuring was simply the wisdom of the golden rule: do unto others as you would have them do unto you, or, as I prefer to describe it, the energy you put out into the world is the energy you get back. This is particularly true with regard to employees.
In January of 1998 Fortune Magazine published a list of the 100 Best Companies to work for in America. They found that high worker morale and outstanding financial performance go together. Out of the 61 publicly traded firms in the 100 best companies, 45 yielded higher returns to shareholders than the Russell 3000, an index of large and small companies that mirrors the 100 best. Over a ten -year period the 61 averaged annual returns of 23.4% vs. 14.8% for the Russell 3000. This result is not surprising since how employees feel about their company is directly related to their level of productivity and creativity. Research shows that highly motivated employees are up to 127% more productive than averagely motivated employees in high complexity jobs.
A survey of Polaroid and Gillette found that 84% of employees believe a company's image in the community is important. Fifty-four percent it was very important. Those who feel the company has a strong community presence feel loyal to the company and positive about themselves. Maceo Sloan, CEO of Sloan Financing Group, says that his company's bottom line is that "companies that are indifferent or callous to their social responsibilities are, by definition, poor business people who will not maximize the creation of shareholder wealth." New job entrants feel
the same way. A study of 2,100 business students found that 79% of them think a company has to take into consideration the impact it has on society. Fifty percent said they would accept a lower salary to work in a very socially responsible company. Forty-three percent said they would not work for a company that was not socially responsible. The Cone/Roper Cause-Related Marketing Trends Report of 1997 found that 76% of consumers would be likely to switch to brands associated with a good cause if price and quality were equal. This figure is up from 66% in 1993.
Some small companies are now offering volunteer work as an employee perk. At Wild Oats Markets Inc. employees are paid one hour of charity time for every 40 hours of work. At Nantucket Nectars, part of their credo includes "promoting community participation." Large companies are also getting in on the act. In September 1995, a consortium of 21 major
corporations pledged $100 million for a family care aid program in 56 cities. The money is being used to fund day care centers for children and elderly people, and improve the skills of care providers.
Ryuzaburo Kaku, Chairman of Canon, states that, "If corporations run their businesses with the sole aim of gaining more market share, they may well lead the world into economic, environmental and social ruin. But if they work together for the common good they can bring food to the poor, peace to war torn areas and renewal to the natural world. It is our obligation as business leaders to join together to build a foundation for world peace and prosperity." This focus on the common good lies at the heart of organizations such as the World Business Academy and the Caux Round Table. The Caux Principles, developed by an international group of business leaders, focus on the moral imperative of improving the lives of customers, employees and shareholders by sharing with them the wealth that business creates.
It is becoming clear that the number one principle for business success in the 21st century will be, "Who you are and what you stand for are just as important as what you sell." Who you are, is related to the level of consciousness from which you operate.
A key aspect of my research over the past three years has been the discovery and development of the model of the Seven Levels of Corporate Consciousness. This model is used to measure and analyze organizational and team cultures. I have also used this model to explain the motivations of corporate philanthropy in its broadest sense---how corporations spend their excess dollars. Corporations will generally operate at several levels of consciousness at the same time. What level does your company operate from?
Survival Consciousness
The corporate focus at this level of consciousness is purely and simply making money. The motivation is greed. It usually takes the form of bribery. There is a underlying assumption in this form of giving that the organization will get back far more than it will give away. If you want to rationalize it, call it an investment.
Relationship Consciousness
The corporate focus at this level of consciousness is relationships that serve the companies needs. The motivation is a milder form of greed. It takes the form of financial support to a cause or campaign to get favors at a later date. If you want to rationalize it, call it putting money aside for a rainy day.
Self-Esteem Consciousness
The corporate focus at this level of consciousness is being the best. The motivation is looking good. It takes the form of financial support to an institution, a charity, or some other cause that is in the public eye. At this level of consciousness the organization wants to be seen to be giving. Preferably they want their contribution to be publicly acknowledged by the institution or organization or get some publicity out of the exercise. If you want to rationalize it, call it building a public image, or indirect advertising.
These first three levels of consciousness are about self-interest. The driving force is getting rather than giving. At the next level of consciousness the emphasis begins to shift to the common good. As we proceed through the higher levels of consciousness there is less concern about returns and more concern about the impact the giving will have on the beneficiaries and society in general. In the higher levels of consciousness the organization recognizes it operates within a social context and that it ultimate success depends of the success of the whole.
Transformation
The corporate focus at this level of consciousness is learning and growth. The motivation is increasing knowledge. It takes the form of contributions to institutions and organizations that foster new ideas and help people learn and grow. At this level of consciousness the organization is concerned about increasing the education level of a general pool of candidates for future employment.
Organizational Consciousness
The corporate focus at this level is the physical, emotional, mental and spiritual needs of employees. The motivation is employee fulfillment. It takes the form of exercise facilities, child care, emotional support and personal development. It is about creating great facilities and helping employees become all they can become. Underlying this motivation is the dual purpose of attracting the best people and building a better world by growing people.
Community Consciousness
The corporate focus at this level of consciousness is support to the local community. The motivation is caring about what employees care about. It takes the form of financial contributions to local charities and local communities as well giving paid time off to employees so that they can contribute to their favorite charities. Underlying this motivation is the recognition that the organization and employees are part of a larger social construct. The success of the company and the community are interwoven.
Societal Consciousness
The corporate focus at this level of consciousness is to support society as a whole. The motivation is to
make the world a better place to live. Corporations at this level recognize that whatever contribution they can make to improving societal conditions will benefit everyone. They understand the interconnectedness of all life.
Copyright © 1998 Richard Barrett & Associates LLC
Richard Barrett is Managing Partner of Richard Barrett & Associates LLC, Fellow of the World Business Academy, Former Values Coordinator at the World Bank, Speaker,
Consultant and Author of "Liberating the Corporate Soul: Building a Visionary
Organization" and "A Guide to Liberating Your
Soul."
Contact Richard via E-Mail at: richard@corptools.com.
Visit his website at: www.corptools.com
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