Why Social Responsibility is Just Another Cost of Doing Business

Dec 24, 2013

Is a business "socially responsible" if it does no harm, follows government mandates, and recycles?

Well, doing those things isn't socially irresponsible but these days customers expect more than the bare minimum of "do no harm." They expect positive action. They expect you to make the community that supports the business a better place.

The degree of positive action that will attract customers depends on your size, your community, your market, and your business. It may be as easy as donating a prize to the school fair or as complex as making sure that your supply chain doesn't include sweat shops or pesticides or animal cruelty.

Social responsibility does not mean that you need to lose money or give something away for nothing - although donating to nonprofits is one way to be socially responsible. The idea is that as your business grows so, too, will your positive effect on the community.

One day, instead of just giving a prize to the PTA, you may be able to donate food for its fundraiser or underwrite a scholarship program.

Like advertising, social responsibility is a cost of doing business. Like advertising, it gets your business noticed and increases customer loyalty. Social responsibility comes in many forms:

Partner With a Cause - It's easy to find a cause, no matter what the size of your business or the culture of your community. A gift for the PTA raffle is one way. Or provide refreshments to a local charity's fundraiser. Or serve as a drop-off point during a winter coat drive. The smaller you are, the more important such partnerships can be: You get high visibility, good vibes and, depending on what you do, new walk-in traffic.

But do your research first. Make sure the cause is one that matters to your target market. Advertise your participation, even if its only with posters in the window and next to the cash register. Make sure your partner mentions your help as well, on event programs and in newsletters.

Donate to Non-profits - Give part of your profits, whether for one night or on a regular basis, to a nonprofit.

Go Green - Change your light bulbs, cut down on A/C use, even dim the lights. You'll be doing a good thing and cutting expenses. Win-win! Consumers want to feel virtuous; help them by offering discounts if they use their own shopping bags. Use recycled materials in your advertising (and say so).

Treat Employees Well - An often overlooked aspect of social responsibility is treating employees well. Employees paid a living wage have a stake in making the business succeed. They'll work harder and smarter. That's to you benefit. For the community, an employee with discretionary income can support other businesses and may not need to use tax-supported services quite so much. (Think WalMart and the publicity it received in the bad old days when it encouraged its underpaid employees to sign up for Medicaid.)

Buy From Socially Responsible Suppliers - Buy from other socially responsible businesses. Even if you donate to nonprofits and pay your own employees well, it just doesn't ring true if the goods you sell are produced in sweatshops.

Collaborate and Communicate - Join groups that promote social responsibility in your community or sector. In New York City, try Sustainable Business Network New York City, whose members range from contractors to party planners. You'll get ideas for improving the social responsibility score of your own business as well as the support to implement those ideas. You may also increase your b-to-b sales.

None of these suggestions takes a lot of money. Small businesses, even start-up businesses, can be socially conscious and profitable.

Geri Stengel is president of Ventureneer.com, an online peer learning service for small business, especially those making a social impact such as nonprofits and social enterprise, and Stengel Solutions, strategic planning, marketing and marketing research firm. An adjunct professor at The New School, she honed her online experience at companies like Dow Jones and Physicians’ Online. Geri co-founded the Women’s Leadership Exchange. Geri is a past Vice Chair of Governance Matters, a nonprofit organization that counsels New York-based nonprofits on issues of stronger governance and a past board member of the National Association of Women Business Owners (NAWBO)-NYC.

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