Building the Business Case for a CSR Budget

Main Takeaways:

• Articulating the business case for CSR programs is essential for gaining executive support, as it underscores their contributions to employee engagement, consumer support, and overall company reputation.
• Understanding the priorities of the executive team and communicating CSR’s alignment with these objectives, such as employee retention or risk mitigation, can enhance the effectiveness of budget proposals.
• Quantitative data, including potential revenue increases and turnover cost savings, is crucial for demonstrating the tangible financial benefits of CSR initiatives to decision-makers.
• Engaging with internal resources and cross-department collaborations can optimize the implementation of CSR strategies without heavily increasing costs, thereby strengthening the case for enhanced CSR budgets.

We all know that it’s good business to do good business. It’s been proven time and time again. Yet, when it comes to investing in corporate social responsibility we’re still value and presenting the good old business case.

While this might be a frustrating situation, having to prove the worth of something inherently invaluable is something you’re likely to come across at some point in your CSR career. So, how do you do it?

Determine Your Goal

There are many reasons that a CSR practitioner might need to make (or re-make) the business case for their programs. Understanding the why will help you frame your argument. Step one: figure out why you’re making the case for an increased budget. Is it to:

• Build a new CSR strategy
• Create a new program altogether
• Advocate for a larger team
• Head-off a new leader asking why the company invests in CSR
• Supplement potential budget cuts
• Fund a system that can manage CSR data

Start with the Big Picture

Anyone in this field is aware of the benefits that CSR programs offer a corporation. But sometimes, our leadership teams may need a reminder. CSR increases employee engagement, productivity, and retention. Happy and engaged employees produce better business results than those who aren’t engaged.

Social Responsibility also yields increased consumer support and a better company reputation. Both of those things affect the company bottom line positively. Linking CSR business goals and your company’s bigger picture helps executives understand the need based on what is important to them: making money!

Don’t worry, this isn’t a bad thing. After all, if your company didn’t make money, there wouldn’t be a CSR program to engage!

Think Data Might Help?

• ↑ 20% CSR programs have shown to increase revenue up to 20%.
• 76% of consumers are more likely to buy from companies that stand up for Social issues.
• 85% of business leaders today agree that it is no longer acceptable for companies to just make money.
• 80% of employees are more likely to work for a company that takes a stand on environmental issues.

Speak the Language

Spend some time getting to know your executive team and the decision maker that oversees CSR. Understanding what is most important to this group will steer your presentation in a way they appreciate. Their primary concerns might be employee retention, reputation, risk mitigation, culture, or other areas. Knowing the overarching goal of this group will lead you to use the right support for your ask in CSR funding.

Go Hyper-Local

It’s great to understand how CSR affects the bigger picture, but your executives are probably wondering: what do our employees want? Be sure to survey your employees to understand what this key stakeholder group wants and needs from your company. Use that data and their thoughts as you speak to the executive team. There’s no denying the power of a collective voice. If the entire company is calling for support through a company match, for example, it would behoove you to mention that fact to the leadership team.

Do the Math

While we want to believe that making the business case is about intangible benefits, in most companies, that just isn’t the case. To really speak the executive team language, it’s important to do some homework beforehand and calculate the Internal Return on Investment of CSR for your company.

Estimated Turnover Savings

• [ $xx,xxx] / year
• x 131% benefit costs
• x # of employees
• x 38% turnover costs
• x 20% current turnover rate
• x 25% turnover rate reducation

TOTAL SAVINGS: $x,xxx,xxx

Calculations Key

• Average employee salary.
• Employer costs for employee benefits according to statistics from the U.S. Bureau of Labor Statistics (2014).
• Your employee headcount according to HR.
• US Labor Bureau reports average turnover costs at 38% of the annual salary.
• Your turnover rate input according to HR.
• It is reasonable to expect up to 25% reduction in turnover rate.

Find and Leverage Internal Resources

In order to accomplish your original goals for your CSR program, get creative! Think of how you can partner with other departments to achieve the same end-goal without increasing costs as significantly.

• Need to get the word out about your giving campaign? Recruit marketing.
• Need to properly vet a potential nonprofit partner? Ask your financial experts to look at the 990.
• Need someone to help spread the word and increase participation across offices? Recruit CSR champions.

For many CSR departments, resources are stretched thin. Finding innovative ways and looking for help internally can help reduce your overall ask and increase the likelihood it gets approved.

When your board says they don’t have the budget, don’t stress! Take a look at these tips, remember that you know exactly how to make the case for CSR, and educate your decision-makers about why more funding would be integral to engagement success within your company.