- PayPal is one prominent example of a company that practices corporate social responsibility, and there are practical ways for even much smaller businesses to follow its lead.
- More and more customers are saying that they are more likely to support businesses that align with their values.
- If you’d like your business to support a cause, keep up with the news and read articles from various sources to find something that strikes a chord.
- This article is for business owners interested in incorporating social responsibility into their business plans.
When it comes to corporate social responsibility, small businesses could learn a lot from PayPal. The credit card processing giant facilitates charitable giving in several ways, including its PayPal Giving Fund, which allows nonprofits to process donations without fees or deductions – and PayPal adds an extra 1% to Giving Fund donations made during the holiday season.
According to Sean Milliken, PayPal’s head of global social innovation, promoting social responsibility is part of the company’s broader business plan.
“People want to do business with companies that are aligned with a cause,” said Milliken in an interview with Business News Daily. “Giving back, contributing to society, [and] being a good corporate citizen is not only the right thing to do – it’s good for business.”
Even if your company doesn’t have the resources to embrace social responsibility on PayPal’s scale, there are good reasons to integrate some form of charitable giving into your business plan.
Tip: To learn more about PayPal’s offerings, read our guide to PayPal’s mobile card reader.
What is social responsibility?
In business terms, social responsibility is when companies take action to benefit society while increasing value for shareholders. To achieve social responsibility, corporations and the people who work for them must act in the best interest of society and the environment.
A business can achieve sustainability by holding itself accountable and being transparent about how it operates. Adopting these social responsibility principles in your business can help your employees and customers feel more fulfilled and positive toward your organization.
To become socially responsible, your business should enact policies that strive to benefit society. Some companies enact “green” policies focused on creating a more sustainable environment, while others establish moral responsibility and workplace ethics policies to ensure they act within their shareholders’ best interests.
Key takeaway: Socially responsible businesses prioritize working for social good, weaving social responsibility into their business models.
Benefits of being socially responsible
Socially responsible businesses see benefits inside and outside their organizations. Here are the top benefits of corporate social responsibility.
1, Being socially responsible engages employees.
A good employee experience boosts engagement, and finding a cause to support that aligns with your employees’ values is a great way to start. When considering causes, ask yourself what’s natural to you and what your employees care about, Milliken advised.
Include employees in the decision-making process about social responsibility efforts. For instance, to give its employees opportunities to participate in socially impactful projects, PayPal has formed partnerships with nonprofit organizations that focus on advancing efforts around financial health. “Employees play a vital role in helping take those programs forward,” Milliken said.
For small businesses, finding opportunities for employees to engage in socially responsible projects or causes could also help the bottom line. According to an American Express survey, 81% of American millennials say that future successful businesses will have a genuine purpose that resonates with people. [Read related article: Most Consumers Want Sustainable Products and Packaging]
Almost as many believe their employers’ values should match their own values. Finding ways to help employees participate in giving back helps deliver on that desire for purpose.
Did you know? When you encourage employees to volunteer, they get a chance to know each other, improving company morale. Based on the American Express survey’s findings, this is also an important part of attracting and retaining millennials as employees.
2. Social responsibility helps align you with your customers.
While employee engagement is vital, your social responsibility efforts should also encourage customers to support charities your business supports. While charitable giving is built directly into some business plans, other companies find opportunities to give back that align with their business purposes, even if they aren’t necessarily written into the company’s founding principles.
Free download: If you’re still developing your business plan, you can use our business plan template to craft one that incorporates social responsibility right from the beginning.
Milliken said there are various ways to connect customers to a cause. Customers are likely to rally around an immediate need, such as after a natural disaster. They are also likely to participate in giving that ties a social purpose to the product or service they’re buying. For example, TOMS Shoes has a “buy one, donate one” model.
Milliken said either approach could work for businesses that know their customers. “You can align yourself with a cause that is close to who you are as a business that will resonate with people and make natural sense. One way is not better than the other. [Social responsibility] does not have to be part of the business model from the start.”
3. Social responsibility can drive innovation.
While businesses giving back to their communities isn’t a new idea, integrating social corporate responsibility into a business’s very foundation is a relatively novel concept.
“Businesses have a long history of giving back, but I think the models for doing so have evolved,” said Milliken, who adds that the word “innovation” in his job title reflects PayPal’s commitment to changing the way the company thinks about social responsibility. “No longer will companies have a corporate social responsibility department where one or two people sit in an office writing checks to nonprofits.” [Read related article: Creativity Is Not Innovation (But You Need Both)]
Part of integrating giving into a company’s overall mission is responding to how technology is rapidly changing the way people donate money and support charities. Milliken said mobile technology and social media are drastically impacting how customers give and how businesses will reach those customers.
“We’re seeing a huge move toward mobile,” he said. “And that trend will continue to grow.
To the extent that we can embed ways for people to give anytime, anywhere, we have a real shot at increasing the level of charitable giving.”
Social media is also creating more opportunities for people to give. PayPal makes a point of providing the technology and tools to make this happen, according to Milliken. The key to leveraging social channels for charitable giving is to ensure the messaging is contextual and relevant to what the customer is doing at that moment, he said. “Social media can help us find people in these moments, giving us a better shot to get them to give.”
Ways your business can be socially responsible
There’s no one-size-fits-all approach to social responsibility initiatives, but here are some straightforward ways to get started.
1. Clearly state your company values.
Take a step back and reflect on what social good your company can support. Discuss this with your executive team and conduct employee surveys to learn what’s important to the company as a whole. Once you have a clear sense of your team’s values, you can look for projects and foundations to match.
Tip: If you feel stuck or uncertain about what cause you’d like to support, keep up with the news and read articles from various sources to note what sticks out to you.
2. Create realistic goals.
After establishing your values, think about how those values can inform your business goals. Brainstorm a list of actionable items you and your team want to achieve within a specific time frame.
Since it takes time to establish a process and routine, keep your early goals small and manageable. That way, you can achieve your goals more easily and won’t get discouraged. As you continue to connect responsibility policies and projects, you can expand and grow your goals.
3. Educate your employees and customers.
Once you create a plan, state your intentions to your employees. Let them know you value their insight when it comes to establishing your company values, and discuss the goals you’ve developed with their input. Clearly outline the social initiatives you’re focusing on and how you’ll make impactful change.
Include your social responsibility goals in your employee handbook and company policies. Some policies, such as paid time off (PTO) policies for volunteering, encourage employees to make a difference and demonstrate that your company looks beyond the financial bottom line.
Key takeaway: When you establish your company as an ethical organization that cares about social issues, you’re more likely to retain top talent and attract high-level applicants in your hiring process.
After getting your employees up to speed, let your customers know about your new social responsibility goals. Your customers will feel that you’re engaging them on a human level and not just trying to sell to them.
Most customers like to know that the businesses they support align with their values. For this reason, launching a social responsibility initiative and sharing it with your customers is an excellent customer retention strategy and a way to interest new clients.
Sean Peek contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.