The Social Contract The Relationship between Business and Society MR. JOSEPH WANG’ENDO

The Relationship between Business and Society Businesses have never been insulated from expectations about their social responsibilities. What is different today is that the issues are far more numerous, complex, global, and fast-changing than ever before. Corporations have always had complex relationships with the rest of society.

The Relationship between Business and Society These relationships embrace not only Direct stakeholders (shareholders, consumers, government regulators, and employees). Broader set of stakeholders throughout the rest of society (such as the communities where a company operates, the media, the non-profit sector, and others).

Social Contracts One way to understand these relationships is to think of them as social contracts – sets of laws, regulations, and obligations that guide corporate behaviour. At the formal end of social contracts, laws and regulation govern such areas as shareholder rights, pollution allowances, hiring rules, accounting practices, and the like. When companies violate these laws and regulations, governments can fine or imprison employees and otherwise censure businesses.

Social Contracts ctd’ Less formally, societies expect companies to comply with obligations such as minimal labor standards along their supply chains. Even if companies are not legally required to observe these expectations, ignoring them can hurt their reputation.

Social Contracts ctd’ Corporate social contracts may include:- Informal social expectations regarding “frontier” issues. Frontier issues raised by small groups of activists evolve into semiformal obligations if the activists gain a critical mass of support, and can become formal laws and regulations if that support becomes sufficiently widespread.

Social Contracts ctd’ But each industry has its own volatile social issues as well. As a result, social contracts vary from industry to industry, and even from region to region within the same industry.

Case Study The pharmaceutical industry has a complicated contract with society. Many societies view healthcare as a right rather than a luxury, and so pass formal laws to make drugs widely accessible and reasonably priced. Societies also expect drugs to be safe, and so regulate drug trials, labelling, and packaging. More informally, societies expect pharmaceutical companies to share their goods with the less fortunate during times of crisis.

N0N PROFITS LOOKING FOR CORPORATE SUPPORT Nonprofits looking for corporate sponsors, and for-profits looking for that perfect philanthropic partner, will find their best match lies in a collaboration that meets both parties' needs. The synergy of nonprofit/for-profit partnerships must be not only philanthropic, but also couched in terms of marketing, program and financial needs.

Finding that perfect someone The key thing for both parties to identify is: Who are the folks that really fit - and are interested in supporting - the type of work we're doing? There are a lot of great resources out there to facilitate that daunting search for a soul mate.

Finding that perfect someone Volunteers are also a great place to test the waters. Establishing a relationship with a potential corporate partner is often most effective if you're already engaging their employees as volunteers or donors. Rather than cold-calling, go through those employees to deepen the relationship.

Finding that perfect someone In encouraging a corporate partner, the first step is to arm yourself with information, whether it's through Google, the Foundation Center or a phone conversation. Most corporate philanthropies do have stated objectives, so be clear on what they are. It's important not to waste your time or theirs where there's no potential for connection.

The relationship talk Once you've found a corporate partner, managing expectations is important. And if there are specific numbers or targets set, both parties need to be careful about over promising. Most corporations like to get their toes in the water before they make a substantial contribution. So be clear how many people are going to be at an event, how many times they're going to get their logo out there - and stick to it.

The relationship talk It's also good to quantify impact, perhaps with a follow-up report that tells the corporation exactly what value the company received for its contribution. Or taking it a step further, not just how many times the logo was shown, but what impact was shown on the people the nonprofit supports: "Because of you, we were able to feed 100 children."

Getting the most out of a good thing Sometimes a nonprofit will get into a relationship for financial reasons only, and not be as concerned about other potential benefits. When groups do that, they're undercutting and undervaluing the potential of that corporate relationship, because there's so much more a company can offer.

Getting the most out of a good thing Whether it's free advertisements or in-kind donations, corporate sponsorship should not be about cash alone. About half of our annual income comes from in-kind donations, and grassroots groups often find it even easier to convince companies to donate products and services than cash.

Getting the most out of a good thing Traditionally, when people think about engaging volunteers, they think about folks that are going to help out with very basic administrative duties like licking stamps and pouring soup. They don't think about leveraging the fact that someone is a certified public accountant and could help them balance their books.

Getting the most out of a good thing Skills-based volunteerism is starting to explode. Volunteers want to leverage their intellectual capital. Corporate philanthropy and social responsibility are on the rise, but social entrepreneurship, where the lines between nonprofit and for-profit blur, is where the sector is really headed.

Corporate Social Initiatives Corporate Social Marketing Cause Promotion Cause – Related Marketing Supporting behavior change campaigns Supporting social causes through paid sponsorships of promotional efforts Donating a percentage of revenues to a specific cause based on product

Corporate Social Initiatives Corporate Philanthropy Community Volunteering Socially Responsible Business Practices Making direct contributions to a charity or cause, usually in the form of grants or donations Providing volunteer services in the community Adopting discretionary business practices and investments that support social causes