In October 2022, Bloomberg’s recession probability models forecasted a 100% chance of a U.S. recession over the next 12 months. A 100% chance. Like checking our weather app and seeing, “100% chance of rain,” we seem to have reached a point of inevitability in knowing that a storm is coming. The only questions left up for debate are: when, how bad and have we properly prepared to weather the storm? In times of economic uncertainty and recession, many companies will feel tempted to pull back on their social impact strategy to concentrate on shoring up profits. Of course, profit — in good times and bad — is where any discussion of companies’ responsibilities should start, but corporate social responsibility (CSR) can actually support the bottom line. As Points of Light expressed in a recent open letter to CEOs in Harvard Business Review, prioritizing investments in social impact strategy during a recession is a critical responsibility that benefits employees, customers, community and stakeholders.
In today’s competitive job market, job seekers are increasingly considering a company’s social impact strategy when deciding where to work. According to our research, companies with a strong CSR reputation experience higher levels of employee satisfaction and loyalty. Employees want to work for companies that align with their values and make a positive impact in the world. By prioritizing CSR, companies can differentiate themselves and attract top talent.
The companies most vulnerable to cuts in their social impact strategies are typically the ones that have not embraced and embedded good corporate citizenship into their corporate DNA, so how can you assess the stability and viability of your social responsibility programs?
Points of Light offers The Civic 50 as a framework to understand your current state and a road map to make improvements around your company’s CSR initiatives and community-based engagement. This framework is broken down into four dimensions: investment of resources, integration across business functions, institutionalization through policies and systems and impact measurement. Companies that have developed strategies across these dimensions have CSR and purpose initiatives that are better positioned to survive — if not thrive — during challenging times like a recession.
Here are the four principles of The Civic 50 and guiding questions that help align your company’s social impact strategy:
Are the investments you are making in your CSR initiatives in alignment with your company’s core business? Is your company utilizing all the different resource types it has at its disposal beyond just traditional financial giving such as in-kind contributions, traditional and skills-based volunteering, and pro bono offerings?
Does your company integrate its community engagement and social impact programs throughout its business functions and interests? How does community engagement and social impact show up in each of your business departments? Is community engagement a standing agenda item on all staff and board meetings?
How has your company institutionalized its community engagement and social impact programs through organizational policies, systems and incentives? Does your company have volunteer time off and matching grants? Has support of CSR and community engagement initiatives become a part of department or individual goal setting, reviews and recognition?
Have you defined social and business impact outcomes for your community engagement and social impact programs? Do you have a measurement, reporting and communication strategy for those outcomes that includes decision-makers and decision-influencers at your company?
While a “100% chance” of recession brings a foreboding sense of certainty about what lies ahead, it also brings clarity. Recessions can often take everyone by surprise, but we’ve been talking about this one for months. We have time to prepare for this storm. Taking the time to understand how weather-proof your social impact strategy is an important first step through tools like The Civic 50. Now more than ever, businesses need to be saying “yes” to their social responsibilities. It not only matters to those people and communities most vulnerable during a recession but to the long-term success of your business once the storm has passed and the sun shines again.