Little or large: different approaches to CCI

April 01, 1994

There is widespread acceptance these days that business can only prosper in the long term if the society in which it operates prospers. That’s one reason why many large companies run active community involvement programmes. The same logic should apply to smaller firms too, but the current perception is they are not getting involved. Andrew Wilson from Ashridge recently conducted a study on corporate attitudes for the charity, Action Research, and half his sample was smaller firms. He reached four main conclusions which debunk the myth that small companies don’t take CCI seriously.

First, it is not true that small firms don’t provide a wide range of different types of support to charities. Certainly cash donations are the most popular, used by 91% of smaller respondents, but more than half have sponsorship arrangements, and more than a third provide gifts-in-kind. The main difference is on employee involvement, with firms employing over 10,000 staff being twice as likely to have secondment or volunteering programmes.

Second, it is not true that small firms don’t give much. An analysis of giving as a proportion of turnover shows smaller firms are no less generous. No correlation emerges from the data linking size of business with generosity. The average value of cash donations in the sample was £2,351 with a further £1,736 of gifts-in-kind. Not much compared to BT’s £14 million, but multiply it by x,000 small firms, and you get some idea of the scale that would be possible if giving was more widespread.

Third, it is not true small firms don’t run sophisticated programmes. In fact the fundamental difference in CCI is not between large and small but between those companies that adopt a ‘hands off’ approach and those with a ‘partnership’ approach. In the former, support is mainly through cash donations and the expected benefits are largely external, essentially through improved image. In the latter more broadly-based approach, internal benefits are sought, for instance through staff involvement, and wider external benefits also, for example through cause-related marketing. The Ashridge study found examples of both approaches among small and large firms alike.

Fourth, the one big difference to emerge is that smaller firms are twice as likely to support local charities than national – 69% compared to 34% of firms employing fewer than 25 staff. This trend is set to continue – when asked about future plans, the preference for local is again twice that for national.

So the conclusion is that small firms are doing more than is apparent at first sight. Their involvement tends to be small and local, just like their businesses. The real challenge for the CCI movement in the UK is simply to get more of them involved. For big firms and their community affairs managers, that means linking up with suppliers and customers to build ‘shared destiny’ partnerships including CCI. If successful, the next decade could see massive growth in business support for the community without big business needing to increase its spend as a proportion of profits. Leverage is the name of the game.

Corporate Giving: It’s your job to do something with it. A research report on how and why companies give to charities. Published by Ashridge Management Research Group and Action Research. Contact Andrew Wilson on 0442 843491.

Corporate Citizenship Briefing, issue no: 16 – June, 1994