Business rigor can save and sustain corporate philanthropy.
Peter Drucker once said, “If you can’t measure it, you can’t manage it.” Though he wasn’t speaking about my line of work—corporate philanthropy—he might as well have been, and as the business of giving faces a pivotal inflection point, his words resonate more clearly than ever. In thinking about them, I would go one step further: If you can’t measure it, you can’t grow it.
In the world of corporate philanthropy, growth is precisely what we need. Though today’s headlines seem to feature more coverage of high-profile giving than ever, the simple truth is that we need more money from the business sector to help address the world’s problems in a meaningful way.
An illustration of this lies in the fight to end AIDS. UNAIDS estimates that there is a $7.2 billion annual gap in funding we need to fill to meet global HIV/AIDS targets for prevention, treatment, and research. Right now, private philanthropy accounts for only 6 percent of the total global financing for HIV/AIDS research and treatment. To help fill the $7.2 billion gap, private philanthropy’s involvement is imperative and must increase. We need more donors—particularly corporate donors—to give. If they don’t, we can’t hope to effectively stem the tide of AIDS.
But money is only part of the equation. The second piece of the puzzle relates to the business of giving. With economies facing tremendous challenges and bottom lines tightening, corporate cause-related programs and products are under intense pressure to produce measurable returns on their social and business investments. It isn’t enough just to do good. There has to be a high level of business rigor and thinking behind the program for the concept of shared value to survive budget cuts. Not only that, people will stop writing checks if—as Drucker says—we can’t measure it.
We also need to vigorously monitor and evaluate the effectiveness and social impact of giving. We need to ask: Are we investing where it matters, are we employing strategies and selecting grantees that can deliver through sustainable and scalable programs, and are we impacting the field beyond financial investment and creating real social returns?
Adding it all up, for the donations to start flowing and programs to survive, a new playbook needs to emerge—one that makes it OK to talk about real business goals as they relate to philanthropy, and to establish that profit and good works can—and indeed must—co-exist in corporate cause work. At the core of this new playbook for corporate responsibility, we need metrics—the foundation of any successful business initiative and a glaring omission in today’s CSR philanthropy dialogue.
At MAC Cosmetics, we run a donation philanthropy model that gives 100 percent of VIVA GLAM product sales to the MAC AIDS Fund, a successful giving model that we are now trying to integrate into several other Estée Lauder brands. But we can do more. Collectively, corporate philanthropists need to pursue better insight into areas such as:
- New-to-brand purchasers of cause products
- Companion purchases with cause products
- Brand awareness measured by online engagement with cause initiatives
- Loyalty over a one-year period of cause-product purchasers
- Staff loyalty, engagement, and retention
These are the types of measurements that can help corporate philanthropy programs survive and thrive in today’s business climate. Recently, Harvard Business Review called for similar metrics around a company's sustainability work in the areas of environment, social and human capital, and governance. Tellingly, philanthropy and cause initiatives were not included. It’s a line of thinking that needs to change.
Fact is, we need more mission-driven brands to have an honest business discussion. We need to uncover the business strategies, operational plans, and metrics of cause-related efforts that deliver social good and return on shareholder investment. When this happens in earnest, the exciting and hopeful talk about ending HIV/AIDS and other issues around the world will finally be more than just talk.