By Elliot Green
05 Jul 18
The idea of the Triple Bottom Line (or TBL), is not a new one. It was introduced into the business lexicon over two decades ago back in 1994 by John Elkington, the man behind award-winning British consultancy SustainAbility.
The Triple Bottom Line
To recap, the Triple Bottom Line refers to the three different bottom lines which a company should always be considering and measuring: Profit, People and Planet. These three all-important Ps break down into the building blocks that can make or break your business. The first is, of course, corporate profit. This is the fundamental purpose of corporations, but the other two pillars of Ps are, in our opinion, at least as crucial to a company’s survival and success. ‘People’ refers to a company’s commitment to social responsibility, while ‘Planet’ is unsurprisingly how the company impacts upon the environment.
Do you have the time for the Triple Bottom Line?
For some business owners, this concept is immediately exhausting. It might seem like it’s hard enough trying to guarantee that you’re generating a profit every year without throwing in these other to some people seemingly superfluous Ps.
But this attitude fuses two devastatingly mistaken beliefs. First is the misconception that the three Ps truly are separate. Increasingly, a business’s performance in measures of social and environmental responsibility directly influence its profit margins. Second is the division not only of the ends, but of the means. You don’t need separate teams, departments or projects dedicated to each of these three all-important areas. You can actually boost them all exponentially in a matter of minutes. That is the wonderful and immense power of a thoughtfully channeled Corporate Social Responsibility budget. If you ask us, the quickest, simplest and by far most effective way to achieve this is by becoming a Wonderful Partner.
What’s ‘good’ got to do with it?
It’s easy to say that having a positive impact upon your community and environment are as important as your turnover, but - from a strictly business point of view - should you really care?
In short, absolutely. Businesses which don’t prioritise garnering a positive (and legitimate) reputation of responsibility will generally lose out on customers, employees and income.
1) Profit margins
To the short-sighted, it may seem somewhat counterintuitive that cutting out a bigger chunk of your budget for charitable purposes will augment your profits, but it is almost always true; especially if you choose your causes carefully.
For anyone who still can’t quite reconcile the facts, you could even get away with adjusting your pricing to reflect your higher costs: around three-quarters of millennials have said they’d be happy to pay more for goods and services in exchange for the knowledge that the company is socially and environmentally responsible. Evidence to support this has been demonstrated in multiple (and separate) markets - a convincing indication that corporate ethics are becoming more important to consumers.
Those business-minded, number-oriented amongst you needn’t take our word for the fact that investing in good causes will translate to higher profits. There are plenty of studies, surveys and statistics to back us up.
One such survey was carried out by Cone Communications and revealed that a staggering 87% of consumers would buy a product because the company in question advocates for an issue which the buyer considers important. So not only are they willing to pay a little bit more, it’s actually a really significant factor in the age old decision: to buy or not to buy?
The thing is, having a strong commitment to CSR won’t really earn you brownie points, just like having decent customer services isn’t going to dazzle many people. Being an actively ethical organisation isn’t about going the extra mile anymore. These days being socially-minded is regarded as the bare minimum. In the same Cone Communications survey, 70% of respondents stated that companies are obligated to actively improve issues which aren’t related to their everyday business operations.
That statistic also explains why a whopping 89% of those surveyed said they would purposely switch brands in favour of one associated with good causes, if the price and quality were similar. Essentially, fail to commit to good and you’re giving away your customer base to your competitors - or at least 89% of it. Is that a figure you can afford to lose?
2) Branding and Marketing
So why does dedicating a decent sum of money to a decent cause mean a boost to the profits you can expect to make? A lot of it comes down to the growing importance which your brand has in dictating your company’s monetary value and its income. The fact is, the strongest brands are based upon emotional connection, and the surest way to create a positive emotional connection and customer loyalty is to show genuine support to causes which your customer base values.
The importance of doing good to an organisation’s brand is increasing, as demonstrated by things like its inclusion in Euromoney’s annual brand perception survey. This year will be the first time the survey takes into account the impact of CSR in its ranking of the banks with the most powerful brands.
If you make social responsibility a core strand of your company’s image, people are going to feel a more powerful and deeper bond to it. Not only are you meeting their needs with the product or service which they purchase, you also satisfy their psychological need to feel that they are impacting positively upon the world, and interacting with companies which hold the same values as them.
And of course, this translates to more impactful marketing - a secondary consequence of donating to good causes. The effects of this are threefold and the first is pretty straightforward: you will be able to infuse as much of your own marketing with your charitable contributions as you wish. You can include your efforts in your blog posts, on your website and in your adverts. You can tailor special events you do to fundraising for causes you support or include pledges for donations in your monthly emails to customers. It’s totally up to you how you let people know about the good stuff that you’re doing, but you can be sure that they will notice and remember.
The second and third marketing effects of your endeavours have the added bonus of coming at no extra cost or effort. You’ll probably find that a lot of your customers interact much more with your brand if it’s associated with social responsibility. Think about it: if your posts are about the good you’ve been doing for the community, and about how others can get involved, isn’t it much more likely to get a Like or a Retweet than something straightforwardly advertising interest rates or breathable running shoes?
Basically, your brand can become enmeshed with how your customers are trying to mould their own image online. If buying from you makes them look good, if it echoes and reinforces the values they espouse on their own profiles, they are going to want to engage with you. Just like that, you have your customers doing the work for you. And you all get to enjoy the glow of doing something good (and letting other people know and join in!).
Similarly, the causes which you choose to support will doubtless want to express their gratitude and give credit where it’s due. At the Wonderful Organisation, we certainly give a great deal of thanks to our Wonderful Partners, Amazon Web Services, Twilio and WHYPAY?. Without these organisations' generous provision of funding and services we simply wouldn’t be able to provide totally fee-free fundraising. That’s why we have their logos proudly emblazoned upon our website. And yours could find pride of place on the websites of the causes you choose. In fact, we hope Wonderful might be one of them, and you can join these three brilliant organisations on our homepage! But more about that later…
Choose where you funnel your CSR budget wisely, and you could see your branding at huge events, allowing you to reach millions of people. Suddenly, you’re being marketed not only to your own customers and to their followers, but to everyone who supports the causes you’ve picked. That’s pretty powerful.
Now that we’ve established the potency of charitable giving when it comes to profits, loyalty, branding and marketing it’s a no-brainer that CSR is of ever-growing significance when it comes to investors’ decisions.
Again, you don’t have to just listen to us. Maybe hearing it from the mouth of one of the world’s most influential investors will sway you: Laurence D. Fink, who founded BlackRock investment firm, recently and unequivocally told some of the most powerful businesspeople in the world that in order to gain his company’s support, they’ll have to show that they are making positive contributions to society.
This is pretty significant. Fink’s firm is the largest existing investor, managing over $6 trillion in investments. Yes, trillion. The man knows what he’s talking about.
He isn’t suddenly revolutionising the way investments happen, either. It’s a trend which we’ve been seeing for a few years, and which is becoming ubiquitous, rather than showing Fink’s firm to be particularly philanthropically-minded. In fact, the Responsible Investment Association Trend Report found that in 2016, 75% of professional investors take into account a company’s position on environmental, social and political issues before coming to a decision on whether to offer them an investment.
So if you don’t want to lose out on key funding, you’ll want to make sure that you can show the people with the money how much of a positive impact your company is having upon society. If you ask us, becoming a Wonderful Partner will offer you the most bang for your buck - something that investors are especially likely to respond to. After all, they're all about getting more for less!
Of course, an organisation’s success isn’t just determined by whether it has access to funds or not. Your team makes up your business, and they’re responsible for most of its day to day activities. There’s no doubt that you want, even need, the very best employees.
It turns out that they want the very best, too, and they’re not willing to settle. It isn’t higher pay or more holidays that the workforce is demanding, but the knowledge that employers are ethically-minded.
This isn’t just an ideological thing, either. It seems to be translating into very real actions. Deloitte’s 2018 Millennial Survey has found that a massively significant 43% of millennials are going to quit their job within two years as a direct result of their mistrust of their employers’ ethics. That’s nearly half of your employees potentially walking out if you don’t show them your commitment to doing some good.
And Deloitte weren’t cherry-picking or targeting particularly socially responsible groups. Over 10,000 millennials and nearly 2,000 Generation Z-ers from 36 different countries were surveyed, so the results seem to reflect quite a universal trend.
How exactly can you show your employees that they can trust your ethics, then? What are the uncertainties and problems which the young workforce has with businesses?
For one, a tunnel-vision focus on profit is unsurprisingly going to damage your image as a socially responsible organisation. And unfortunately, 75% of those surveyed think that businesses are currently prioritising their own agendas over the implications on wider society. Giving a little of your income to a good cause could make a world of difference in rectifying this perception.
To strike a positive note, Deloitte isn’t seeing the downward trend in how business leaders are being seen as entirely negative. They’ve said that their findings suggest now is the ‘ideal time for business leaders to prove themselves as agents of positive change’ and regain the employee loyalty which seems to be declining.
The simple fact is people are becoming more and more concerned with working for companies with strong CSR frameworks and an interest in having a positive impact. And with so much information at our fingertips, and so much being monitored and exposed, employers have nowhere to hide and no amount of tricks to play to pretend to do good. The time has come to prove your commitment to good causes or lose the most talented and capable employees.
How to kill three birds with one stone (or some other more compassionate analogy…)
At the beginning of this article, we told you that there was a way to take care of the three Ps in one fell swoop. It might sound too good to be true, but the Wonderful Organisation gets that a lot (if we do say so ourselves), being the only fundraising platform which passes 100% of every donation, including Gift Aid, onto charities. So let’s explain…
As touched on earlier, Wonderful is able to function as it does thanks to corporate sponsorship. The donations which our sponsors pledge are used to cover our hard costs, namely card processing fees and website hosting expenses. That way, every penny which our hardworking fundraisers earn reaches their chosen cause. And just to clarify, these costs are minimal, in large part because nobody at the Wonderful Organisation is being paid. Our hard costs run at about 2.5%, meaning that for every £100 of donations we process we have to spend around £2.50 - it’s this £2.50 which our partners’ sponsorship covers.
If you’ve been convinced that it’s worth spending time and money on corporate social responsibility (and if you haven’t, you clearly haven’t been reading very attentively), we’d love for you to consider becoming a Wonderful partner. We think it really is the most effective use of your money.
By teaming up with Wonderful, you can make your CSR budget work astronomically harder than it would by giving it to a charity as a straightforward donation. In business terms, you’ll be inflating your ROI colossally.
This is what we call the Wonderful 40x multiplier. Yep, 40x. We turn every £100 of corporate sponsorship into £4,000 for charities. So instead of a charity receiving £100, it (or several charities) will receive £4,000 to continue their amazing work.
When you’re showing investors why they should choose you, and how your company is doing even more social good than others in your industry, this is a pretty powerful argument.
And not only do you get to stand out from your competitors in terms of having a 40x bigger financial impact, but you are moving beyond the act of passive donation and enabling fundraisers to do their wonderful work and all of their supporters to see that your company is responsible, philanthropic and working to support its community.
Soon, we will even be able to ensure that the sponsorship you pledge is dedicated to the causes or geographical areas which are important to you and your customers. That way, you retain your brand’s focus and amplify the positive impact which your CSR spending will have on your brand, making it resonate even more powerfully with your customers.
Neglect CSR at your peril… Don’t say we didn’t warn you
The last thing we want to do is to sound the bell of doom and gloom, or to claim to know what’s best for every business out there. But we do think that it’s hard to argue with the figures, and probably even harder to argue with the Fink.
CSR can do a world of good for you and for your business. If you get left behind while your competitors are growing their CSR budgets and directing them more and more carefully, you will almost definitely see your business suffer. Profits will fall, customer loyalty will weaken, employees will walk, investments will trickle into non-existence and most importantly, your community will suffer.
Our belief that doing good means doing well is truly becoming undeniable, so it’s time to be Wonderful and reap the wonderful rewards it brings! If you’d like to support our work, please call Kieron James on 03456 808 808 or email [email protected].