Business Leaders’ Philanthropic Role in an Age of Co-Creation

Business Leaders’ Philanthropic Role in an Age of Co-Creation

Nonprofit organisations provide services, goods and resources to meet urgent and vital community needs. But they rely on philanthropic donations in addition to grants and self-generated earnings. Business leaders should rise to collaborate and co-create with nonprofits to engender positive social impact.

Certain Forbes-listers may come to mind when recalling business philanthropists. However, across all sectors, there is a growing conviction that businesses ought to cultivate more meaningful connections with their communities besides generating profits.

As companies are scrutinised for their values, integrity and trustworthiness, it is increasingly common to find them adopting strategies that enhance their corporate performance and brand value through collaborations that address community needs and contribute to enhancing the quality of life.

Here are three ways business leaders can collaborate and co-create with stakeholders to engender positive social impact.

1. Become a philanthropic business leader

The “3 Ps” of investment—Philosophy, Process and People—are relevant to philanthropic portfolio management.

First, the company’s philosophy – beliefs, values and goals – will indicate its direction and strategy. Whether it is about touching individual lives or making an impact on society, or the environment, the philanthropic mission must resonate with the company’s core values.

Second, the process of crafting the community engagement plan requires an understanding of the social issues to be addressed. Whether relying on external inputs (through a charity or intermediary) or undertaking in-house research through personal contacts and experiences, corporate leaders must know the potential risks (e.g. impact, reputation risk or operational risks) in engaging with the social service sector and how these may be mitigated.

Third, people and social networks are the key pillar of any philanthropic outreach. Corporate giving, often in the form of direct cash donations, foundation grants, stock donations, product donations and other gifts, is built on relationships. Internally, the company may consider initiatives that involve employee participation. Matching gift programmes, for instance, allow the company to match the donation made by an employee to a charity. Volunteer grant programmes, on the other hand, offer financial grants to charities where the employees volunteer.

2. Join a nonprofit board

The output of the nonprofit sector has significant public good elements and a transformative influence on the lives of the underserved and vulnerable. Yet resourcing their critical work through fundraising from the community is repeatedly identified as a challenge for nonprofits. Business leaders have a vital role to play in addressing this through their participation in nonprofit boards and sub-committees.

Effective leadership can bring vision to strategy. A primary role of the nonprofit board is to ensure the provision of adequately resources through fundraising strategies and programmes. Board members have the responsibility to evaluate and decide on effective, efficient and relevant strategies, and to support the management in creating fundraising programmes that are not mere transactional events, but which build a sustained relationship with the donors.

The board’s leadership role includes encouraging a spirit of entrepreneurship and risk-taking so that the nonprofit stays relevant and improves its mobilisation and deployment of resources.

Setting a good example for the staff, volunteers and other donors and stakeholders, board members can demonstrate their commitment to the nonprofit and its fundraising efforts by making regular donations to the organisation themselves. At the same time, their donations provide the gift of voice and influence to mobilise much-needed resources. By walking the talk, board members can reinforce the mission and reliability of the organisations they serve.

At the heart of stakeholder engagement is the acknowledgement that organisations are impacted by, and have an impact on those with whom they interact. The supporter, volunteer and donor base are a critical stakeholder group for a nonprofit. By actively engaging stakeholders, business leaders can influence and add value to the social capital of the nonprofit organisation. Board members’ social networks can support fundraising efforts, e.g. through outreach meetings, appreciation events, and meeting current and potential donors in person.

3. Co-create fundraising innovations  

Board members can play a role in helping the nonprofit sector to adopt technology and innovate for social good. Successful innovations are about partnerships, and corporate leaders can collaborate to creatively develop ways to promote products, services, events or experiences to raise funds for the nonprofit. At the same time, this helps create business value. A culture of innovation engenders digital, nondigital, or hybrid solutions, increasing social mission impact and enhancing the competitiveness of the organisation.

To solve the problems of our time on the scale and at the speed required, it is crucial to mobilise resources in ways that look beyond the traditional charity fundraising and business sector divide. It is also important that technology and social innovations are put to effective use to support the objectives of both the commercial and nonprofit sectors.

Co-creation is an emerging trend across sectors and business leaders can have a pivotal role in inspiring and raising visibility. Projects co-created by nonprofits and business corporations offer a powerful means to build brand value and enhance employee engagement and job satisfaction while meeting social needs.

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