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Assessing impact: the broader picture

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When your organisation has a social purpose as its reason for being, is that the extent of its social responsibilities?

No, the concept of corporate social responsibility (CSR) is just as valid for the NFP sector – and it’s time it was taken it to heart.

With its sheer diversity, the NFP sector in Australia cannot have a one-size-fits-all template for organisations to address their social responsibilities. But given that for-profit organisations and governments are rapidly getting on board with CSR programs and strategies, and that community expectations of all organisations has never been higher, the time is ripe for NFPs to better understand and articulate the responsibilities they have for their impacts on the economy, the environment and society.

There are a number of definitions of social responsibility, some expressed as sustainability or sustainable development. One that resonates well with the NFP sector comes from the International Organisation for Standardisation in its guidance on social responsibility, known as ISO 26000. It defines social responsibility as the responsibility of an organisation for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that:

  • Contributes to sustainable development, including the health and the welfare of society
  • Takes into account the expectations of stakeholders
  • Is in compliance with applicable law and consistent with international norms of behaviour
  • Is integrated throughout the organisation and practised in its relationships.

So social responsibilities are about impacts across different dimensions of an organisation’s activities.

Impacts on society include those on communities and economies, but are equally related to your workforce, suppliers and clients. Including the notion of transparent and ethical behaviour in the definition ensures that CSR extends to cover an organisation’s governance and how it is accountable for its behaviour.

Why is this important for NFPs?

  1. It focuses NFPs on better governance and accountability. Good governance generates confidence in the wide range of stakeholders on whom NFPs depend for their continued success. Stakeholders, including donors and beneficiaries, governments, employees and volunteers, need to be confident that your organisation is working ethically and effectively. To achieve the credibility and trust that good governance encourages, you also need to achieve a degree of transparency about how decisions are made and how your money is spent.
  2. It attracts and motivates employees and volunteers. While many people are attracted to NFPs because of the social purpose behind the work, community expectations of all organisations are increasing. Employees want to know that the ‘“for good” purpose of the organisation extends to good behaviour in all its activities. Increasingly, we see prospective employees considering a potential employer’s CSR report when deciding where they would like to work. This is likely to also extend to NFPs. Having a program to address your environmental impact, and ensuring your workforce is treated respectfully and with regard to the health and wellbeing of everyone who contributes to the organisation’s success, should be as important as addressing your mission.
  3. It improves organisational effectiveness. In the for-profit sector, organisations that have implemented CSR programs, especially reporting, find they can achieve business improvements through better understanding the gaps between their performance and best practice. Typically, they will find cost savings through efficiencies, particularly related to environmental impacts but also in other areas such as improving internal processes. NFPs will also be able to find such efficiencies.
  4. It attracts partners and donors. Partnerships with corporates play an important role in delivering services and programs. NFP organisations with a well-articulated CSR strategy and program demonstrate their bona fides as a good prospect for partnership. It makes it easier for corporate partners to understand your way of working, and to be assured that any reputation risks they face through their links with your organisation are minimal.

How can NFP organisations develop a CSR strategy or program?

A good start is to look at some of the international frameworks for CSR, such as the Global Reporting Initiative (GRI) G4 reporting framework, the UN Global Compact, ISO 26000 and the newly agreed UN Sustainable Development Goals. They all provide guidance about the sorts of issues that need to be considered. In particular, the GRI is useful for the sorts of details stakeholders want to see about your organisation.

Then think about your organisation’s impacts from its activities and potential future activities. It can be helpful to talk to some of your key stakeholders to find out their perspective on CSR issues for your organisation.

Your strategy should address your organisation’s key CSR issues and impacts. Ideally, your strategy should include measuring your performance and reporting to your stakeholders about what you are doing and what you have achieved.

Organisations in the NFP sector have a competitive advantage in this space – their mission or purpose generally aligns positively with social benefit. In my experience advising NFP organisations on their social responsibilities, the hardest part is bringing together what they already do into a cohesive and structured framework that enables them to better articulate their CSR approach to inform donors, governments, employees, partners and communities.

Jackie Allender is a Senior Consultant at the Australian Centre for Corporate Social Responsibility.

This article originally appeared in Third Sector’s June print magazine- click here for more information about subscribing.

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