New Reports Focus on Business Social Investment and Corporate Citizenship

By DEBRA BLUM

A new report demonstrates how American companies can benefit from being

good corporate citizens, but a new survey suggests that many people believe companies have a long way to go in achieving that goal.

Nearly 8 out of 10 survey respondents said they take corporate citizenship into account when deciding whether to buy a particular company’s product, and about 7 out of 10 said they consider corporate citizenship in their investment decisions. At the same time, less than 2 percent of the survey respondents perceive American companies as excellent corporate citizens, while slightly more than one-quarter rate companies as being above-average corporate citizens.

The survey, which was conducted by Harris Interactive for the public-relations company Hill & Knowlton, comprised telephone interviews with 2,594 adults around the country.

A Hill & Knowlton report on the survey suggests that corporate America’s low marks for citizenship may be due in part to a high degree of cynicism among consumers. Three-quarters of the survey’s respondents believed that companies participate in philanthropic activities because they want good publicity.

Companies may be able to counter that skepticism, the report says, if they better align their charitable work with their corporate mission.

Helping the Poor

A new Ford Foundation report demonstrates that companies can also improve their marks as corporate citizens not just by expanding their philanthropy, but by making business investments in poor neighborhoods. Along with making a charitable contribution to a nonprofit group that serves poor people, for example, companies could work with that group to train potential employees. The company would be creating job opportunities and helping its own employee-recruitment efforts.

Among the 27 companies highlighted in the report is Pfizer, a pharmaceutical maker in New York. Working with a nonprofit developer, the company turned an abandoned naval site in New London, Conn., into a research facility. Opened last month, the facility is the centerpiece of an area revitalization that includes the nonprofit group’s plans to build residences, a medical center, and other research offices. Pfizer is also working with the group, the New London Development Corporation, to hire about 500 local residents.

Measuring Giving’s Effects

Another report on corporate citizenship, a joint project of the Center for Corporate Citizenship at Boston College and the American Productivity & Quality Center, a nonprofit organization in Houston, is expected out next month.

The report will show companies how to measure the effect their charitable work has on their reputation, financial performance, and relationship with employees.

Drawing from case studies of seven large corporations, the report will lay out how companies ought to set strategic goals for their charitable giving that are in keeping with their mission, and then measure the philanthropy’s impact on the bottom line.

In one example in a draft version of the document, the report explains how Sears, Roebuck used customer surveys to assess the value of a contribution the company announced on a nationally syndicated television talk show.

According to Sears, the donation, $50,000 worth of company products for needy families, led to an increase in sales during the holiday-shopping season of as much as $40-million.

The final report, to be titled “Measuring Demystified: Measuring the Impact of Corporate Citizenship,” will be available for purchase from the Center for Corporate Citizenship. For more information, see the center’s Web site at http://www.bc.edu/corporatecitizenship, or contact the center at the Wallace E. Carroll School of Management, 55 Lee Road, Chestnut Hill, Mass. 02467-3942; (617) 552-4545.

Copies of the Ford Foundation’s report, “Win-Win: Competitive Advantage Through Community Investment,” are available on the foundation’s Web site at http://www.fordfound.org. In addition, free copies are available from Laufer Green Isaac, 11444 West Olympic Boulevard, 11th Floor, Los Angeles, Calif. 90064; (310) 575-9200.

For more information on Hill & Knowlton’s survey, see the company’s Web site at http://us.hillandknowlton.com. For free copies of the survey, contact Suzanne Laurita, Hill & Knowlton, 466 Lexington Avenue, New York, N.Y. 10017; (212) 885-0403, or slaurita@hillandknowlton.com.