The booming business of giving back.
In recent decades, the push for companies to become more socially responsible has been gathering momentum.
People with business interests tend to understand that building goodwill among clients and the broader population through generous and charitable acts is a key expectation when it comes to corporate responsibility.
But it’s also increasingly obvious that doing good – whether for the community or the world at large – is also great for business.
THE FEEL-GOOD FACTOR
As far back as the 11th Century, scholars such as Thomas Aquinas were exploring the possibility of a link between empathy and altruism.i
In the present, things have progressed considerably, with neuroimaging experiments measuring empathic responses across a network of areas in the human brain, including those that process emotional and social information and pain pathways.ii
Some of those research findings show that generous, prosocial acts like donating money to a worthy cause can boost levels of the ‘feel good hormone’ oxytocin by as much to 50%.iii
And when companies are associated with pro-social behaviour, through community interaction or charitable acts, the feel-good benefits can flow on into consumer behaviour.
Findings from one studyiv into the benefits of corporate responsibility found that consumers were positively influenced to buy products from companies who were seen to do good throughout the community or on a larger social scale, while other research points to a correlation between positive brand associations and cause related activities.v
Beyond branding, businesses with a social conscience can be more attractive to prospective employees, and may outperform less charitable companies in the areas of staff retention and engagement.
CAPITAL DRIVING A NEW INGENUITY
Many of today’s companies are going further than ever with their philanthropic endeavours, linking them to entrepreneurship and ingenuity in order to create programs, initiatives and foundations that keep on giving and keep on growing, for benefits that go far beyond the purview of business growth and profit.
The concept of ‘social capital’ is now given its own weight and value, recognised for its unique capacity to generate returns of a different kind.
It’s a powerful shift that is repositioning corporate interests to exist alongside, rather than apart from, society and community interests. The flow of goodwill, and capital, can only have a positive impact on growth for consumers, stakeholders and a raft of important causes.
For information on investment opportunities and ways to incorporate philanthropy and giving into your portfolio, please contact your Morgan Stanley Financial Adviser.
i‘Aquinas: Selected Writings.’ McInerny R (Translator). Penguin Classics. New York. 1999.
ii‘Primates and Philosophers: How Morality Evolved.’ De Waal FBM. Princeton University Press. 2006.
iii‘Empathy toward Strangers Triggers Oxytocin Release and Subsequent Generosity.’ Jorge A. Barraza; Paul J. Zak. Annals of the New York Academy of Sciences. 2009.
iv‘Doing Well by Doing Good: The Benevolent Halo of Corporate Social Responsibility.’ Alexander Chernev; Sean Blair. Journal of Consumer Research. 2015.
v‘Pro-Environmental Products: Marketing Influence on Consumer Purchase Decision.’ Pickett-Baker, Josephine, and Ritsuko Ozaki. Journal of Consumer Marketing. 2008; ‘Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Social Responsibility.’ Sen, Sankar, and C. B. Bhattacharya. Journal of Marketing Research. 2001; ‘Gauging Consumers’ Responses to CSR Activities: Does Increased Awareness Make Cents?’ Wigley, Shelley. Public Relations Review. 2008; ‘A Typology of Consumer Responses to Cause-Related Marketing: From Skeptics to Socially Concerned.’ Webb, Deborah J., and Lois A. Mohr. Journal of Public Policy and Marketing. 1998.
