Perception and Reality for Social Impact
*** Research report on behalf of the Bertelsmann Stiftung ***
The Bertelsmann Stiftung commissioned Beyond Philanthropy to conduct exploratory research on Corporate Citizenship in the digital age. Within the last five years, new technologies have been developed for companies to influence and encourage deeper social impact. Today’s corporate leaders have these new tools at their disposal to manage their Corporate Citizenship activities and to engage employees in everything from crowdfunding campaigns and volunteer events to better social impact reporting.
But do these new tools provide companies with new opportunities, greater challenges or both?
Assuming there might be considerable differences between Germany and the USA as a technological pioneer, Beyond Philanthropy partnered with research advisors Derrick Feldmann and Amy Thayer, researchers based in the US that have studied the behaviors of social impact, millennials and company/cause engagement.
Digitalization is not influencing corporate citizenship as much as it is other business units. However, companies recognize that digital technologies not only can open up new areas for engagement – when used thoughtfully, they also can create pathways to understanding social issues and discovering potential solutions.
Technology generally makes business processes faster and easier, including those related to their social impact efforts: managing funds allocation, involving stakeholders, etc. U.S. companies, though, must guard against a tendency to value efficiency over impact.
Digitalization improves communication with stakeholders. Digital communication tools provide mechanisms for feedback, in turn giving companies an opportunity to involve stakeholders in decision-making processes – which leads to increasing internal and external perceptions of authenticity, transparency and trust. At the same time, however, companies must be prepared for stakeholders’ increased expectations of being involved.
Digital technology can improve partnerships by enabling both sides to better understand and meet each other’s needs.
Insufficient digital tools
To a high degree, corporate citizenship practitioners perceive digital tools as too expensive or too threatening to data security. This is an area that merits additional research to meet an individual company’s needs.
While practitioners decry the lack of tools (see #5), they do agree that specific digital tools could make tracking and measuring a program’s impact easier. The key challenge to address is the lack of an agreed-on definition of social impact and what indicators to measure.
Many companies interviewed and surveyed lack a vision for using digital tools to enhance their corporate social impact initiatives. The situation is exacerbated by impact being measured across a number of company divisions (CSR, HR, Diversity & Inclusion, etc.). Companies need an overarching corporate citizenship strategy with unanimously defined outcomes and measurements.
Lack of innovation
While some of the companies interviewed and surveyed already engage in digitalization-related discussions, most are not using digital tools to revolutionize their corporate citizenship programs. This is truly unfortunate, since companies are the most likely to have the resources and competencies to advance the social sector with innovative digital solutions.