'BACS 2018 The Business of Sharing' by our chair Heather Newell

Heather Newell Chair of BACS provides a look back over 2017 and BACS 2018 The Business of Sharing.

 

What is BACS about?

BACS is here to recognise the corporates who believe that corporate social responsibility is a vital part of running a successful business and a key driver of a healthy economy. AND to demonstrate that our society is a better place to live, if corporates and the charitable sector work together to resolve issues and challenges. To explain to our non- members and readers, BACS stands for Business and Community Shares. Perhaps the most important letter in that is S for Shares, for sharing. Neither side of the equation can work alone – to get the most benefit for the community – we must SHARE.

We’re not an organisation that blindly promotes and celebrates corporate charity relationships.

We are an organisation that celebrates and encourages the SHARING between business and the community to resolve problems. If only we understood more about each other’s aspirations for our society and the purpose of our existence, by working together (sharing) we could make New Zealand a better place for all of us to live our lives, and to do profitable business.

What does that sharing look like? Well in our world, a world that’s filling the space in between the corporate sector and the community sector, the sharing is about investing more time getting to know each other, our strengths, weaknesses and vision and aspirations, and then putting a solution into place,  than negotiating contracts. It’s a world where we start by asking how do we make New Zealand a better place, and then ask ourselves what could we do to make a difference, to improve our society? Both parties can offer something of value, and should come together on an equal footing.

 

One of the Roles of BACS is to help to bring together both equally important sides to the equation.

We make recommendations on appropriate matches based on the values of the organisations and their own missions. We make introductions to resolve specific problems and we create challenges for corporates and non- profits to get to know each other better.  It’s got to be fun, right?

The year usually starts with the development of the Good Business Egg Awards. Unlike your normal awards which tend to gather dust – our Awards are presented in a fun environment, but with a serious role. At each Award ceremony, the corporate winners from their different categories are asked to complete a challenge with a community organisation. The objective is – you guessed it – the opportunity for sharing and learning more about each other’s challenges.

2017 has been a bit of a milestone for the organisation. We have registered as a charitable trust and widened our board representation.  We welcomed Natasha Muir who has an expertise in the charitable sector and Vito Lo Iacono who has a long history in corporate /community relationships. We have brought together corporates and non- profits to hear the wise words from CSR experts like Dame Julia Cleverden and David Halley. We launched our first Social Index just one year ago.

 

This was also the year we realised that our mission has a wider responsibility.

We heard that the Peter McKenzie Trust was seeking concepts and ideas from the community to contribute to the elimination of child poverty. The Fund invited participation from all sectors, not just the charitable sector. In a blinding flash we saw that this was something in which our membership, which represents both corporates and charities, could play a vital role. I could imagine that if a charity went to a corporate on its own –“why don’t you resolve child poverty” – I could see them running a mile. But if a group of willing corporates come together, putting their competitive interests to one side, -we are convinced that as a group they can make a difference. Yet again, it’s about sharing – already we know that our members are playing their part –  but as individual companies or individual charities. Imagine the power and size of the contribution that could be made if our BACS members got together around a table to contribute their expertise, their enthusiasm, their staff and customers. We believe we could all make a contribution to eliminating child poverty in our country.

To test our hypothesis, we brought together our members from the business sector and the charitable sector in September in Auckland and based on the feedback from the membership, we devised a concept to encourage empathy amongst the public, based on research into what other countries were doing in this space.

Thanks to those of you who participated in the workshop – of course we will keep you briefed on any developments.

 

In saying that this has been an important development year for BACS; it’s also the year which has marked another sea change for CSR.

Let me take you on a short history lesson about the development of CSR in New Zealand.

Having been commentating on the corporate social responsibility sector for more than 25 years, I’m at the stage of having seen trends and cycles come and go, come and go, come and go! And I just wanted to share those trends and cycles with you.

Back in the 1980s when the Business Round Table was in its prime, it was considered a theft from shareholders if corporates “spent money in the charitable sector”.  So the relationships between the two sectors were based on an exchange of goods and services. “Mutually beneficial relationships were the appropriate motivations. In other words “sponsorships” were the mechanism by which the two came together. Charities, arts organisations, and to a much lesser extent, environmental groups, had to provide benefits in return for a corporate dollar. In effect they had to turn their operations into what we now might call social enterprise, asking the question of their own organisation – what tangible benefits can we sell to a corporate entity? Accountability was based on the achievement of contractual terms – how much media coverage was achieved? How many times was the corporate brand mentioned? How much space did they receive to display their corporate branding?

By the early 2000s, the word sponsorship had been replaced by partnership, and only the most commercial sporting bodies still entered into sponsorship contracts.  Charities and non-profits loved the word partnership because it sounded like they could avoid signing a potentially complex contract with many deliverables; they thought that a partnership would be easier to manage, and easier to sell, and would be decided on the worthiness of their cause. However a mismatch was developing. For the corporates the new terminology signalled that they wanted to play a more active role in developing a solution for the charity’s cause. This led to a change in priority for the corporates. The corporate would offer expertise, volunteers, business acumen, customer access and even visibility but much less cash!  It’s been a game changer that has not been well understood by charities.

Less than a year ago I was asked by a charity to secure $300,000 from the corporate sector otherwise the organisation would have to close.  If this organisation had understood the partnership definition, they might have asked me to find a group of corporates who had some interest in developing a solution to resolve their cause. Under the partnership model the corporate focus would be on fixing the problem, not on maintaining the sustainability of the charity.

 

Today however, corporates have become less interested in partnering with a brand and much more interested in partnering with a cause.

Their contribution to community development is much greater if they offer their expertise, their customers, their staff, their media spend, their marketing support than if the charity tries to change the world on their own. However this enlightened attitude is not always of benefit to the community.  Some companies, especially young, emerging companies are jumping on the CSR bandwagon and, although they don’t understand it, and they do mean well, BUT they are attempting to use their social mindedness for corporate benefit and profit. Just because you think you are doing good – doesn’t mean you really are!

Just in the last few days I saw a news media article about an emerging company which is planning to sell a product, donate 50% of the profits to a charity and by doing so, resolve a health issue that plagues the Pacific Islands.  Unfortunately, I know from years of experience – it will go nowhere. For a start, they’re aiming to support a particular charity which receives $10million dollars a year from public donations.  This charity delivers the service and has a wonderful branding with thousands of regular supporters. For a new business to believe it could resolve this particular health issue by selling a few products, and that the media would report this as a good news story, without any analysis whatsoever,  leaves me silently screaming.

Just to check further, I had a look at the official corporate partners for this particular charity – Specsavers has raised more than $1.5m through a customer support programme in Australia and New Zealand. Shouldn’t they, and their customers, be getting the recognition and congratulations, not a company that hasn’t even got off the ground!

For a number of years I’ve been in the position of hearing from many businesses (often just starting out) who believe they can use the charity name or the charity cause as a marketing tool, primarily to sell their product. Either they don’t make any profits, so can’t donate anything. Or they donate so little that it doesn’t make a jot of difference to the charity’s income. As the years go by, I have adopted a much harder stance. “Thank you but I don’t believe second hand jeans are a good fit for our cause”. “And thanks for the offer of donating a shoddy product that you haven’t been able to sell. What we really need is access to your customers.”

I sat in a meeting recently where someone from the charity said “you know what we really need? It’s for every employee who is subjected to domestic violence to be able to take leave from their employment to get things sorted out, to move house, to go to court, without any shame or judgement from their employer.” Now how easy was it to talk to a major national employer and ask them to add that clause into their contracts? It took one phone call, one email introduction and a few meetings between HR and the charity employee. Job done!  And both parties were very happy with the outcome. And didn’t I hear just yesterday that ANZ bank will allow women in crisis to set up bank accounts without the usual bureaucracy. Someone just asked them and they said yes! Isn’t that a win for the community!

 

The Empty Cardboard Box Award

At the Eggs Awards in 2016, thank you to The Warehouse for hosting it!, there were three cardboard boxes at the front of the room. What were they there for? Had someone forgotten to take out the recycling?

In time all was revealed. Each of the three category winners -Countdown for health and wellbeing; KPMG for Education and skills; and Contact Energy for Community empowerment – were presented with their Prize.

An empty cardboard box which they were challenged to fill – in one year’s time. Exactly one year later they were to bring back the box, now filled with something – for the benefit of the National Collective of Independent Women’s Refuges.  Ang Jury, CEO was on hand to meet with representatives of each organisation, and each of them pledged to work with Women’s Refuge to find something to fill the box.

From the BACS perspective – they were off on their own – there were no rules, no prescriptions, no expectations – except that there be some collaborations.

 

What happened?

In some ways a year is along time to keep such a project alive and kicking. Allsorts could go wrong – people could leave, priorities change, people forget! However at the end of the year, three boxes were returned to the Good Eggs Awards held here in Wellington in 2017 (thanks to ANZ for hosting).

KPMG filled their box with important numbers. These numbers represented the cost of service delivery. When a charity communicates with its donors it usually expresses the cost of delivering its service – “Your donation will allow us to provide a goat, a donkey or a bed for a woman escaping from a violent partner.” Up this point Women’s Refuge had been guessing what the cost of service delivery might be. Thanks to KPMG and its expertise, Women’s Refuge now knows that cost .AND to top it off, the methodology for evaluating the cost of service could be used by other charities. The value of these numbers came to $43,000  – a project that the charity could not have funded on its own.

Contact energy filled their box with electricity – offering to negotiate individual power contracts for each of the 50 independent and affiliated refuges – along with a sizeable cash donation. At this stage, we don’t know what the value of the electricity might be, but it certainly has a value for each participating refuge.

Countdown filled their box with things that a person might need when they have to leave home in a crisis situation. Dozens of its stores around the country took up the challenge and donated 35 boxes of products to refuges.

So that was the corporate contribution but of course we are about sharing remember, so what did the corporates get out of this?

Firstly Women’s Refuge reviewed Countdown’s Family Violence Policy and have offered to work with Contact Energy to develop their policy and staff training. KPMG said “at the end of the day you couldn’t argue with the fact that you were helping an organisation do great things for your community. They valued the opportunity for junior staff to participate and some said their skills based contribution was the most satisfying and valuable volunteering experience they had undertaken.

 

How could it have been improved? What were the challenges?

Gaining senior management support and finding a niche for the challenge within the corporate bureaucracy was a challenge. Perhaps the project was not as well scoped or briefed as it could have been. Some participants had more internal resources to bring to the table than others. In some cases the organisations may not have fully recognised the intangible benefits of CSR. Others did well to engage their employees.

From the BACS perspective, having now done two years worth of challenges we learnt that there is still some way to go in understanding each others “business”. A charity needs to ask more of the corporate about their resourcing, their expertise, and the intangible benefits that they are seeking  from this relationship. They need to ask the question – “what are your business challenges that we can help with?”

The corporate needs to understand the different structures of the charity sector and how a charity raises money and why. They really ought to start looking at the dollars and the annual reports of the organisation they are working with. They need to ask the question “what would it take to resolve your mission or complete your objectives”. They might even ask, “what would it take to close you down because the issue has been resolved?”

By the way – This year’s challenge is a pile of bricks to tackle loneliness and for 2018 our challenge will be the biggest yet – what can we, as a group do to eradicate Child Poverty.

Please come and talk to us if you want to contribute to this project.