Why Mid-Sized Businesses Should Prioritize Employee-Led Philanthropy

companies can take charge of mental illness to keep employees healthy an 282 386110 0 14082217 500 400x331Mid-sized businesses – often defined as organizations with 100 to 5000 employees – comprise 26% of U.S. businesses, according to the Midmarket Institute.  And yet, despite their numbers, mid-sized businesses are often overlooked in discussions about employee volunteer and giving programs.  The big corporations are more typically the ones that have the attention-getting programs and events, and with their size they’re more often able to seize the spotlight with stories about impressive community impact and employee engagement.

But bigger isn’t always better, and leaders of mid-sized businesses should recognize that their potential for making a difference in the world at large and within their own organizations and bottom lines is significant if properly leveraged.  As with any company, the key to creating a program that is successful both internally and externally is to lay out a thoughtful corporate philanthropy strategy from the start that includes business goals, key measurements, and tactics to continuously build on the momentum that comes with achievement.

A 2013 survey on the behaviors and attitudes around CSR of mid-sized business leaders unveiled some interesting surprises and occasional contradictions that are helpful to understand.  Spearheaded by Business4Better, the report, titledMid-Sized Companies and Social Responsibility,” fielded responses from over 170 executives to ascertain trends in social innovation, community engagement, and employee volunteering initiatives within mid-sized businesses.

As Business4Better leader Scott Vaughn summarized in the Stanford Social Innovation Review, here are a few interesting takeaways from the report:

  • Most mid-sized companies surveyed (more than 75%) engage in CSR for the purpose of impacting their communities, not their bottom lines.  Only 12 percent of companies are looking for profitable ends from community involvement.

  • Mid-sized companies are still heavily involved in checkbook philanthropy, but are eager to move towards more company-wide engagement around their CSR efforts, with 40% of companies providing time off to volunteer and 30% engaged in pro-bono services.  

  • Causes championed by mid-sized companies tend to be local and people-focused.  For example, education, the environment, youth services, economic development, disaster relief, and arts and culture are popular areas of focus, with two-thirds of respondents channeling their efforts within the same state of their company’s main office.

  • The CSR efforts of mid-sized companies are usually managed top-down but not always embraced at the bottom.  More than half of mid-sized companies engage in causes championed by the CEOs, often because of a personal connection the CEO has with that cause, but less than 20 percent of employees participate in these programs.  

The most intriguing takeaway of the report was the apparent contradiction between mid-sized companies’ metrics for success and the goals for their CSR programs.  Less than 10% of companies state that they use CSR as a tool for employee engagement, and of the companies that measure their community involvement programs (and more than one-third don’t), more than 40% said they measure them by employee participation or satisfaction.  

As Vaughn observes, “Companies are missing opportunities to tie community and social innovation programs to successful business performance. While larger corporations may look to community involvement as a way to increase profits, most mid-sized companies do not.”  

More than two-thirds of mid-sized companies are looking to enhance or establish their CSR programs, as they should.  And if mid-sized companies begin to recognize these programs not just as philanthropy vehicles but as important drivers of their bottom lines, they’ll invest the appropriate resources and strategy around making sure they’re successful.  With employee engagement being an area of particular struggle for mid-sized companies, it’s important that these organizations better leverage the power of strong volunteer and giving programs to awaken and inspire their employees…and keep the best of them from walking out the door to bigger rivals.

Related articles:

Mind the Gap: a Tragic Waste of Talent

Letter to a CEO: Why Your Corporate Philanthropy Is Languishing

3 Ways to Fire Up Your Company’s Community Impact


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