Why It’s So Difficult For Shared Values Professionals To Get Their Budgets Approved

The yellow sector. Because numbers.

Budgets. Everyone’s favorite part of their job to loathe. And loathe them, shared values professionals most certainly do. Why? Says, Paul Klein, Cofounder and CEO of Impakt—a consultancy that helps businesses use social change to drive business results—CSR is often seen as a hard cost to a soft program.

“CSR is often seen as a hard cost to a soft program.”

What does this mean, exactly? Soft programs are those that are difficult to quantitatively measure in the context of financial return on investment. Hard costs are dollars and cents.

Decision-making in the face of opposing priorities is never easy, but CSR managers often lack the tools, metrics and capacity to assess their program’s performance. As a result, their positions and budgets are particularly vulnerable

Without those 3 factors mentioned, teams attempting to justify their CSR budgets are often left to resort to presenting exclusively on social return on investment (i.e. social impact), best guesses, and/or other forms of emotional decision-making. That isn’t to say that those are bad or wrong, it’s simply to suggest that without hard numbers, CSR pros must perform a dance of sorts each time they pitch for approval on the cost of strategy or initiative.

Which is precisely what inspired Klein to pen an article for The Guardian on “10 tips for CSR managers who want their 2015 budget approved”.

To paraphrase from Klein’s piece:

1. Start with the assumption that the person you report to accepts that CSR is necessary but is highly skeptical of its value relative to other parts of the business.
2. Demonstrate that your initiatives align with the priorities of the CEO.
3. Secure the support of finance. This is the toughest internal stakeholder group and the one whose opinion matters most at this time of year.
4. Indicate the value of every aspect of your program that is quantifiable but don’t assign metrics to pieces that are subjective.
5. Find out how your initiatives are influencing the stakeholder group that matters most to your company’s growth.
6. Show how CSR costs are being leveraged.
7. Stay away from generic metrics of business and social value — executives want to know how value is being delivered specifically in your company.
8. Get people involved. There’s nothing more powerful than creating opportunities for executives to have direct experience with the stakeholders who benefit from your company’s programs.
9. Commit to delivering more value. This could involve eliminating unnecessary corporate philanthropy, re-negotiating agreements with non-profit partners and reducing the time and money spent on CSR reports.
10. Be innovative — take your program to the next level.

While the above recommendations are certainly all sound strategies, the reason many of them exist in the first place is due to the fact that CSR impact is inherently difficult to quantify financially, and the nature of business today is such that soft ROI is easily overlooked while hard ROI is impossible to ignore.

The fact that “CSR is often seen as a hard cost to a soft program” is the reality of corporate conscience strategy in 2016.

Thus, it should be welcome news for shared values professionals to learn that research has demonstrated the association between well-aligned social responsibility initiatives and bottom line business performance.

Indeed, this research can only be assumed to grow more sophisticated in nature as CSR as a business philosophy continues to mature, and will likewise drive innovations in products and methodologies sure to address many of the most troublesome challenges shared values professionals face today.

With such robust academic evidence proving positive financial returns from CSR investment, the level of vulnerability CSR positions and budgets face — accepted as the inescapable norm — is especially indefensible. Even more so when you look at the vast troves of data and tools available to every other corporate department today. Why has that been the case up to this point? It’s a fair question worthy of further consideration, serving to underscore the distinct disadvantage incurred by teams in this space.

What we do know is that this data challenge is, indeed, surmountable. Upending current orthodoxy, however, requires a new generation of CSR managers who are willing to critically re-examine their processes and who do not mistake business-as-usual for how business ought to be done.

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