When BT published its latest Community Report in September, it quoted two figures for its community contribution: the first £15 million described as following traditional Per Cent Club principles; the second considerably larger at £27 million adopting the London Benchmarking Group methodology.. BT also highlighted two aspects of the European Quality Award – its own successful score with the ‘impact on society’ category and the development work it had undertaken with Business in the Community for a new set of Principles underpining corporate community involvement, modelled on the EQA framework. This is just one company, albeit Britain’s biggest corporate donor, but a microcosm of the growing interest in how companies record, measure and report their contribution to the community.
Benchmarking follow-up
When the London Benchmarking Group published the report on its deliberations in March, its author, David Logan, set out the thinking behind the new recommended approach (Community Affairs Briefing Issue 33). In summary, it suggested categorising community contribution under three headings corresponding to the three main motivations for corporate involvement:
charity – being projects responding to the sense of moral and social responsibility felt by companies;
social investment – being projects that address long term social issues of direct relevance to the company’s prosperity;
commercial initiatives in the community – activities undertaken to yield bottom-line benefits which also provide social benefit.
It also identified a fourth category of social impact – the business basics – such as jobs created and taxes paid which normally fall outside the responsibility of the community affairs manager. These categories are used on a matrix to record the ‘input’ cost to the company of its community contribution and its ‘output’ effect in terms of social impact, business benefit and leverage of additional resources.
This provided a coherent framework based on motivations, reflecting the changing nature of CCI in Britain, and so properly brought into the frame activities driven by commercial realities which fell foul of the previous philanthropic approach.
Such was the interest generated, the original six companies in the London Benchmarking Group (BP, GrandMet, IBM, Marks & Spencer, NatWest and Whitbread) have now been joined by another twelve to take the work forward and provide a broad spread of industry sectors (American Express, BT, Centrica, Nationwide Building Society, News International, Rail Track, Rio Tinto, Scottish Power, SmithKline Beecham, Unilever and United Utilities). In November a follow-up project, Getting the Measure, was announced, managed by the Charities Aid Foundation with two aims:
to work on the techniques of evaluation further, refining input measures and developing output and impact assessment;
to promote to a wide group of active corporate citizens understanding of the importance of measurement and of techniques to record and report community activity.
Research will be undertaken by David Logan and Mike Tuffrey of The Corporate Citizenship Company, publishers of Community Affairs Briefing.
BITC Principles
Business in the Community has also been working to update its approach to evaluating corporate community involvement. In the summer , it unveiled a new framework to identify best practice in corporate community investment and help organisations benchmark the performance of their existing community investment programmes. The Principles of Corporate Community Investment are directly linked to the Business Excellence model of the European Foundation for Quality Management and have already been tried and tested in a variety of organisations. They were developed with support from BT.
To help organisations assess the effectiveness of their corporate community investment programme, Business in the Community has also published a series of indicators accompanying the Principles. Using a simple workbook, companies can assess their CCI progress in key areas by filling in nine short questionnaires and collecting evidence of current activity.
These nine Principles of Corporate Community Investment comprise:
1. Leadership: the behaviour and actions of the executive team and all other leaders inspire, support and promote a culture of CCI as an integral part of achieving the organisation’s objectives.
2. Policy and strategy: the values and concepts of excellence in CCI are incorporated in the policy and business strategy of the organisation.
3. People management: the organisation releases the full potential of its people, ie its employees, using employee involvement as a mainstream skills development tool.
4. Resources: the organisation effectively manages and costs support for the community in the form of cash, employee time and donations in kind.
5. Processes: the organisation manages and reviews all key CCI activities to ensure continuous improvement.
6. Customers Satisfaction: the organisation ensures it is working to satisfy the needs of its project partners.
7. People Satisfaction: the organisation ensures it is working to fulfil the expectations of its people, ie employees.
8. Impact on society: the organisation ensures it is working to satisfy the expectations of the community.
9. Business results: the organisation ensures it is achieving results – against its planned business objectives – which satisfy the needs and expectations of all its stakeholders.
This framework will be used as the basis for a new set of annual Awards for Excellence in CCI, run in conjunction with the Financial Times – applications will be invited from January 1998. It will also be used to assist Per Cent Club members to make an annual return to the Club in a standard format.
The Principles explicitly recommend following the London Benchmarking Group classification for recording CCI. With the involvement in the follow-up work of the Charities Aid Foundation which runs an annual CCI survey with the Directory of Social Change, the prospect is emerging of establishing a single ‘standard’ for measurement in the UK.
CCI Index
Another tool which some companies are using to assess the effectiveness of their CCI programmes is the Bruce Naughton Wade CCI Index. Alastair Bruce described the techniques in the April issue of Community Affairs Briefing. In summary it address three questions:
how well are we doing overall?
how do we compare with our peers and competitors?
how do we achieve better results?
Having completed the pilot study, 17 companies are now involved in the full model which has improved its assessment of community benefits. Primarily designed as an internal management tool, some companies have published the findings, which are independently assessed, including BT and GrandMet.
Does it matter?
Like it or not, companies are under increasing public scrutiny. So it can only make sense to collect the information necessary to answer legitimate questions and to do so in a way that allows companies with a good story to tell to be compared fairly with others. But there are also important internal benefits from better information, at three levels:
economy: better data on inputs allows a judgement of the appropriate level of spend compared with other companies and other operating units within the same company;
efficiency: better data on outputs allows a judgement of what is achieved from a given level of input resources;
efficiency: better data on the impact of the programme allows a judgement of the overall worth of the programme and its component parts.
Better management of limited resources can only be good for the community as well as the company. So getting the measure of corporate community involvement is an essential step towards good corporate citizenship.
A leaflet explaining The Principles of Corporate Community Investment, and the workbook containing the indicators of best practice in CCI, are both available from Alice Dickens at Business in the Community on 0171 224 1600
David Logan can be contacted on 0171 836 6132 and Alastair Bruce on 0171 620 1113
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