Corporate Philanthropy Initiatives Are Good For Business
Corporate philanthropy is on the rise, with businesses both large and small considering their stance as a member of the wider community as well as their bottom line. The world we live in is changing at a meteoric pace and a new generation of consumers and employees are entering the corporate arena and inspiring change; demanding change.
The Internet is awash with chatter surrounding the millennial generation – their differing outlook compared with their predecessors about work and life – and one of the most prominent trends to emerge is their demand for taking less and giving more in all respects.
A recent study from the Reputation Institute shows that increasing community engagement is one of the most effective means by which a company can improve its overall reputation, but don’t just take their word for it. You only have to look at the likes of Facebook CEO Mark Zuckerberg (America’s top philanthropist in 2013), Berkshire Hathaway chairman and CEO Warren Buffet and Microsoft founder Bill Gates and his wife Melinda to see that a philanthropic outlook can help build upon the reputation of your business.
With this in mind, the number of companies introducing philanthropic programs to their agenda is growing on a daily basis and those that are ignoring their corporate responsibilities are being left behind at best and boycotted at worst. So its high time people stopped thinking of these values (philanthropy versus profit) as competing or mutually exclusive. In fact, they are often symbiotic.
According to the Reputation Institute study, the philanthropic nature of a business and the breadth of its corporate citizenship initiatives, often directly correlates with its overall value. According to the study, a 10 percent improvement in perceived corporate citizenship can translate to an 11 percent improvement in overall reputation, and up to a 14 percent improvement in a company’s market value.
It goes without saying that corporate philanthropy can be good from a marketing point of view, thus boosting brand recognition and customer engagement, but a number of studies also suggest that it can bring with it a number of additional rewards. For example, companies that engage in philanthropic pursuits are deemed more likely to attract top talent and enjoy positive corporate cultures. When happy people translate to bottom line results, the plus points are clear to see.
Now is probably a good time to point out that companies shouldn’t embark on a journey of philanthropy purely to increase brand awareness or profits – that goes against what it means to be socially conscientious in the first place. However, all companies should work to address their community’s social problems because the companies are, in fact, important and influential members of the community.
A company’s employees, customers, services and products impact the community in both positive and negative ways. Solving social issues in any community is done best through cross-sector partnerships and companies should strive to be part of the solution. The fact that these engagements can lead to positive business growth is great, but it should not be the driving factor.
So how should companies structure their community engagement programs? What are the keys to effectiveness? What are the metrics for success? A company’s approach will vary greatly based on its size, culture, location, employee base, industry and so forth, but here are a few commonalities among successful corporate citizenship initiatives:
ALIGN YOUR PHILANTHROPIC VENTURES WITH THE GOALS OF YOUR BUSINESS
Before deciding which philanthropic pursuit to follow, it’s a good idea to think about a program or scheme that aligns with the goals and expertise of your business. As an example, many technology companies focus on opportunities within their field such as donating equipment to schools or charities. Another good example of this is the work that Starbucks does with the local communities growing their coffee beans and tealeaves. This kind of philanthropic pursuit not only makes sense to the business, but also directly gives back to a community on which Starbucks depends – it’s all about give and take.
INVOLVE YOUR EMPLOYEES
“The best way to encourage volunteerism and employee giving is to develop a culture of proactive giving from the top down,” says Sid Espinosa, Microsoft’s director of corporate citizenship. By getting your employees involved in the philanthropic side of the business, not only do you promote a culture of giving, but also retain your top talent. It’s a win, win situation.
FORGE MEANINGFUL PARTNERSHIPS
“Look to take an active and transparent role in maximizing your company’s interaction with – and understanding of – a given initiative. Rather than passively handing out grants to check off an obligatory philanthropy box, focus on actively engaging with an organization to build an impactful, long-term partnership. Take an active role in developing the policy that dictates the relationship. Help with product gifts, volunteerism, employee giving, event hosting, and visibility opportunities (to name a few) to ensure that yours is a fruitful partnership,” says Espinosa. By forging meaningful relationships rather than just signing a check every now and then, you are giving a lot more back to the respondent.
Last but not least it’s important to have fun with your corporate responsibility initiatives to derive the most from them. Engage your entire workforce and customer base where appropriate and try and think outside the box when it comes to creating initiatives. Challenge those around you to come up with something memorable, fun and unique.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.