Corporate social responsibility (CSR) has been on the rise for years due to the increasing number of employees who want to work for socially responsible corporations. CSR initiatives can include corporate giving through matching gifts or grants, employee volunteering programs, and more.
Research shows that CSR programs are beneficial and effective for companies, employees, customers, and nonprofits alike. Up to 93% of employees want their companies to lead with purpose, and 92% of consumers say they would buy products that support good causes.
Like anything in business, however, there is some level of risk involved with corporate giving. We’ll discuss a few simple steps you can take to minimize any risk and ensure that you and your employees can safely reap the benefits of CSR.
Benefits of corporate giving
Before we dive into risk management, let’s discuss the lasting benefits of corporate giving that make these programs worth the small amount of risk your business could incur. The major benefits for your company include:
- Positive brand recognition: Well-channeled corporate giving can enhance your company’s brand in the eyes of employees, job seekers, customers, and partners.
- Employee satisfaction: Giving employees opportunities to donate or volunteer for a cause they are passionate about results in higher employee morale, retention, and productivity.
- Customer and partner relations: Today’s consumers see social impact as a key differentiating factor in their purchasing decisions. Improving these relationships carries through to top-line revenue growth, bottom-line profit, and long-term share price appreciation.
It’s no surprise that these benefits have resulted in a sharp increase in corporate giving across the nation and the globe. Moreover, as technology and air travel make the world a smaller place and corporations operate across borders, CSR programs have evolved to address global issues such as disaster relief, humanitarian crises, health, and education.
Questions to ask to ensure CSR risk management
As the popularity and reach of corporate giving expands, so does the need to comply with a broad range of domestic and international rules to ensure that charitable contributions accurately support legitimate causes. These include laws enacted by the USA Patriot Act, the Office of Foreign Assets Control (OFAC), the U.K. Anti-Bribery Act, and other global organizations and regulations.
To minimize risk, your company can do research and screen nonprofits against a matrix of relevant global laws and fraud watch lists. If your corporate giving options include the opportunity to donate to organizations outside of the country, stay current with cross-border money transfer declarations, tax filings, and data privacy legislation.
When selecting nonprofits for employees to donate to, use these questions as a screening tool to make sure each organization and your overall CSR program are legally compliant:
- Is the receiving nonprofit a valid and current 501(c)(3) organization that can receive tax-deductible donations?
- Has the nonprofit been screened against a comprehensive and up-to-date sanctions database?
- Does your giving initiative meet local and international tax laws and filing requirements?
- Is there adequate security to protect the personal and financial data of employees participating in giving programs?
Thankfully, with the right technology, this risk management screening process isn’t something program managers have to do from scratch.
How CSR software can help you minimize risk
Corporate-philanthropy-focused technology platforms address multiple aspects of corporate giving, including screening and verification, that make regulatory compliance and due diligence a breeze.
For example, Bonterra Corporate Social Responsibility’s Giving & Matching solution includes features like:
- Automated checking against national and international watch lists and tax databases.
- Role-based restricted access to sensitive data.
- Easy program monitoring from a comprehensive dashboard.
Automating your nonprofit approval process removes the potential for human error and quickly assures your company that the organizations you’re supporting are legitimate. Then, restricted access and dashboard features allow you to keep a close eye on all of your programs to continuously mitigate risk.
The bottom line
With proactive, streamlined risk management, you can give your employees all the benefits of corporate giving without the stress of worrying about compliance. Work with your team to get started with CSR risk management.
