There is a lingering, but out-dated, misconception that business and charity are two mutually exclusive concepts (and ‘never the twain shall meet’!). The role of business is to make a profit and generate wealth, while charity is about social upliftment and the provision of care and access to resources and services that meet the basic needs for the poor, vulnerable and disadvantaged.
However, the plight – and the future – of those in need affect us all and cannot simply be left to private charities, government bodies or aid agencies. It is equally the responsibility of business to be involved in the work of social upliftment of some form or other.
A company is made up of people that work together, performing different functions, to make the cogs of a business turn in order for that business to prosper and profit. These people come from different backgrounds, cultures, educational levels, socio-economic circumstances and communities. The fact is that business is part of many, different communities – linked through the geography of their operations, the communities represented by the company’s various stakeholders such as their staff, suppliers, shareholders, and of course, consumers and clients.
The implication of this is that companies cannot truly separate their business operations from broader social issues in healthcare, education, unemployment and socio-economic inequality. What happens in “the community” inevitably affects the business itself. Enduring business success needs broader economic stability, and this needs people (whether employees or in communities impacted by the business) being healthy, empowered, with access to basic services, able to provide for their families, and living lives of dignity.
This isn’t to imply that the private sector could, or should, solve every challenge facing our country, but it does have a unique role in improving circumstances and creating opportunities through its social investments that unlock the positive potential in people. A simple example of this comes when businesses help to lay strong foundations for the future by investing in community early childhood development projects.
Since businesses have the greatest potential to improve the prospects and quality of life of citizens and communities (through their resources, expertise, influence and networks), as they become more and more prosperous, they also have a moral obligation to improve the conditions of a system and of communities that have helped them succeed, and on which they are also fundamentally dependent.
‘Good giving’, or social investment, is not just about altruism, moral obligation or philanthropy. A socially responsible company that is engaged with various stakeholders, looks after its people and their communities, takes matters of sustainability seriously (and makes business decisions accordingly) has the potential to be a great and thriving company because it considers and invests in the long-term future and foundations of the business: people and their environment.
After all, as Henry Ford once quipped, “The highest use of capital is not to make more money but to make money to do more for the betterment of life”. More recently, Starbucks CEO, Howard Schultz, put it like this to the Harvard Business Review interview:
“It is no longer enough to serve customers, employees, and shareholders. As corporate citizens of the world, it is our responsibility — our duty — to serve the communities where we do business by helping to improve, for example, the quality of citizens’ education, employment, health care, safety, and overall daily life, plus future prospects.”
Let’s hope Starbucks’s recent arrival on South African shores will reflect this philosophy.
So, social investment and community engagement by companies are not new concepts – although they have mostly been carried out as non-strategic charitable deeds in the past. The difference is that social upliftment work that was once considered as primarily the work and purpose of charities is now increasingly being seen as a fundamental imperative of commercial entities that have a strategic, and sustainable business approach to their long term health and success.
It is a changing management outlook that is growing, is fundamental to company purpose, and whose positive effects across society is something to encourage and celebrate.