WHY should corporates adopt a purpose led approach to giving?

PART ONE
WHY SHOULD CORPORATES ADOPT A
PURPOSE LED APPROACH TO GIVING?
THREE PART SERIES
THE WHY, WHAT AND HOW OF PURPOSE LED
CORPORATE GIVING
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THREE PART SERIES
THE WHY, WHAT AND HOW OF PURPOSE LED
CORPORATE GIVING
To better understand how a purpose led approach can revolutionise the corporate giving landscape in Australia, this three part series distils
research around three key questions:
should corporates adopt
a purpose led approach to
does best practice,
purpose led corporate
WHY WHAT HOW
giving?
giving look like?
to embed purpose led
corporate giving into your
organisation?
Parts 2 and 3 will be released shortly, be first to get them by subscribing to our newsletter
2

PART ONE
WHY SHOULD CORPORATES ADOPT A PURPOSE LED APPROACH TO GIVING?
WHAT’S INSIDE
04 Why should corporates adopt a purpose led
approach to giving?
07 Building a tangible business case
– Customer loyalty in a world of declining trust
– Becoming an employer of choice
– Solving the most pressing problems of our time
14 The business case in practice
16 Gaining leadership support
3

WHY SHOULD CORPORATES ADOPT A
PURPOSE LED APPROACH TO GIVING?
Purpose led corporate giving is strategic investment that focuses giving to causes aligned with the purpose of your
organisation, consumer market and employees
Despite two decades of increasing philanthropic
support for Not for Profits (NFPs), major social
and environmental challenges remain
pervasive in Australia and around the world.
This experience indicates that NFPs alone do not
have the capacity to effect systemic change; that
Government alone does not have the capability to
address the root cause of many social issues; and
that corporates alone do not have the ability to
tackle the issues plaguing today’s society.
To solve the most pressing problems of our time,
Corporates, NFPs and Government with a
shared sense of purpose must work together,
be open to testing new solutions, and focus on
generating both more and better giving.
And when we refer to “giving”, its not just about
giving funds, but also time, skills, experience,
goods and services.
The findings from the Giving Australia 1 research
have been echoed in our conversations with
Corporate Australia. Many of the Corporate Social
Responsibility (CSR) Managers we speak to report
that, despite exploring various technological
and strategic solutions, they are still falling
short of their employee giving and volunteering
targets. Conversely, the employees we speak to
consistently report that they feel disconnected
from the causes made available to them, or are
unable to find the right avenue to meaningfully
contribute in their already busy lives.
4

This suggests that there is still a significant gap
between the strategic, corporate led motivations
for giving and the deeply personal, emotionally led
motivations of employees.
In short, corporates are failing to effectively
encourage the core driver for meaningful and
sustained giving: the fulfilment of one’s social
purpose. When it comes to creating impact and
strengthening engagement, we must find better
ways to help employees discover their purpose,
and pursue it in ways that are easy, meaningful
and impactful.
While the above issues are not new, our recent
engagements suggest that the corporate giving
landscape is on the cusp of a revolution. Leading
corporates are being more strategic in their giving,
and charities are exploring approaches to make
giving more meaningful via virtual reality, and
more transparent with the likes of blockchain.
There is growing evidence to support the business
case of adopting an authentic and engaging
approach to giving that positions corporate and
employee purpose at the heart.
5

WHY? THE BENEFITS ARE CLEAR...
PURPOSE
PROMOTES
CUSTOMER
LOYALTY AND
PROFITABILITY
66%
of consumers are
willing to pay more for
a socially responsible
product or service 2
90%
of consumers report
they would swap to a
more ethical brand 3
SHAREHOLDER
VALUE
Loyal & more
profitable customers
+
engaged employees
=
greater shareholder value
44%
of millennials would
leave their current
employer within the
next two years to gain
more meaning and
fulfilment 4
PURPOSE
PROMOTES
RETENTION &
CREATES A THRIVING
WORKPLACE
CULTURE
10X
MARKET
OUTPERFORMANCE
Purpose led companies
outperformed the S&P 500 by
10 times between
1996 and 2011 6
$43K
is the fully loaded cost
of a single employee
turnover 5
$2,400
of value is generated
by every employee
who participates in
volunteering through
their workplace 5
6

BUILDING A TANGIBLE BUSINESS CASE
Components of the business case
The first, and potentially most significant barrier
for corporates in adopting a purpose led approach
to giving is demonstrating a clear business case.
Fortunately, the business case for social purpose
has been strengthened of late by readily available
data on consumer behaviour and employee
motivations.
We have identified three clear and pervasive
trends that support a purpose led approach to
deliver more and better corporate giving.
This section explains each of these trends and
provides the tangible and intangible benefits that
will help you build your business case.
What makes for a compelling
business case?
Firstly, consumers expect businesses to behave
in a socially responsible way – their spending and
loyalty increasingly reflects this.
Secondly, employees now want more from their
careers – attracting and retaining top talent
depends on more than compensation. Corporates
must prioritise being an employer of choice.
Thirdly, corporates are expected to play a key role
in solving society’s most pressing problems – their
employees want to be involved in contributing to
the solutions.
Business case in practice - page 15
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BUILDING A TANGIBLE BUSINESS CASE
1. Building customer loyalty in a world of declining trust
(Thankyou has) seen sales grow by 200%, outperforming cheaper products with no ethical pay-off
The modern consumer expects businesses to
operate ethically, and believes that businesses
have a responsibility to contribute to solving
societal and environmental challenges. This
belief guides consumer behaviour, with 90%
reporting they would swap to a more ethical brand
given a comparable offering 3 , and 66% willing to
pay more for a socially responsible product or
service 2 .
In 2014 Thankyou hand wash was the most
expensive product of its kind stocked in Australian
supermarkets. Despite warnings that Thankyou
was at risk of pricing itself out of the market, they
remained steadfast that discerning consumers
would be willing to pay more for an ethical
product contributing to social good. Since getting
Thankyou products into supermarkets, they have
seen sales grow by 200%, outperforming cheaper
products with no ethical pay-off 7 .
Further to this, retailers here in Australia and
abroad have been building customer loyalty (while
boosting sales) by providing consumers with
opportunities to recycle goods at their stores.
Bunnings warehouse for example offers e-waste
drop off events to ethicaly dispose of the materials
on your behalf, giving people another excuse to
wander the aisles over the weekend.
By contrast, Volkswagen’s sales plummeted by
20% in the wake of its diesel emissions scandal,
and the company recorded its first annual loss
in 20 years 9 . The VW example is a stark reminder
that people have the power and their collective
action (or inaction) can hit a company where it
hurts – their share price.
These examples demonstrate the power of the
consumer and how willingness to pay can be
heightened when the consumer connects with the
purpose behind a product.
8

Trust is a valuable commodity that cannot be
bought, and once lost is hard to restore. 92%
of consumers trust peer reviews over advertising,
proving that businesses need to embed deep
levels of trust in their employees, clients, and
shareholders 9 . The average consumer is worth
10 times the amount of their first purchase, but
it takes 12 positive interactions to counteract
every negative one 10 . Employees are at the
coalface of building trust for your business. In
fact, millennial employees feel that where they
can have the greatest amount of influence is on
customers, suppliers, and their peers. They see
that their influence can be exerted through small
scale, immediate actions, that ultimately influence
the bigger picture.
Why should you care?
CUSTOMER LOYALTY IS A THING OF THE PAST
90%
90% of consumers report they would swap
to a more ethical brand for a comparable
offering 3
CUSTOMERS PAY A PREMIUM FOR PURPOSE
66%
66% of consumers are willing to pay more for
a socially responsible product or service 2
This brings us to one of the fundamental reasons
for investing in a corporate giving program:
employee engagement.
9

BUILDING A TANGIBLE BUSINESS CASE
2. Becoming an employer of choice
‘Presenteeism’ costs the Australian economy $34 billion anually through lost productivity
Only 13% of employees are engaged at work 11 ,
and ‘presenteeism’ costs the Australian economy
$34 billion annually through lost productivity 12 .
An effective way to counteract the costs of lost
productivity is by helping employees discover
and pursue their social purpose. A recent study
concluded that companies with strong community
involvement see increases in employee
productivity by as much as 13%, and reductions
in turnover by as much as 50% 13 . A further study
found that employees who volunteered, “worked
harder, were more willing to help their colleagues,
talked positively about their companies, and were
less likely to waste time at work” 14 .
Fostering employee engagement is one of the
key drivers of contemporary corporate giving
programs, and for good reason.
Our relationship with work has changed drastically
over the past decade due to globalisation and
automation. Increased digital connectivity has
heightened the value of face-to-face volunteering
opportunities that allow people to find a sense
of belonging and community. If corporates
want to attract and retain top talent, their value
proposition needs to be more than just money,
and must include opportunities to find a sense
of meaning and personal connection within the
workplace.
Why is this important? Because Millennials will
make up 75% of the workforce by 2025, and are a
generation that prioritise social purpose in their
personal and professional lives 15 . So much so that
44% of millennials state that they would leave
their current employer within the next two years
to gain more meaning and fulfilment 4 .
10

If this statement alone isn’t alarming enough, let’s
look at the numbers.
Research has found that the average fully loaded
cost of employee turnover, including vacancy,
recruitment and onboarding costs, is $43,000
5
. Yet, for every employee who participates in
volunteering through their workplace $2,400 of
value is generated through increased productivity,
greater discretionary effort and fewer sick days 5 .
To position yourself as an employer of choice
you need to have a strong social purpose at the
heart of your business, and must empower each
individual employee to understand the unique
role they can play in making a difference.
Why should you care?
MILLENNIALS ARE LEAVING FOR MEANING AVG. COST OF TURNOVER
VOLUNTEERING PROVIDES MEANING AND
GENERATES PRODUCTIVITY
44%
$43,000 $2,400
of millennials would leave their current
employer within the next two years to gain
more meaning and fulfilment 4
Fully loaded cost of employee turnover
is $43,000 5
Every employee who volunteers through
their workplace generates an additional
$2,400 of of organisational value 5
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BUILDING A TANGIBLE BUSINESS CASE
3. Solving the most pressing problems of our time
“The Dollar” is the universal language that
solving the problems we’re emotionally connected
their video received over two million views, along
resonates with the executive, however putting a
to. From a workforce engagement perspective it is
with many comments that demonstrate their
dollar figure on solving some of the most pressing
important to give employees targeted choice to
consumer loyalty and recognition as an employer
problems of our time can be extremely difficult.
support the causes closest to their heart.
of choice.
With many concerned about the longevity of
However to achieve large scale impact,
Just like Air New Zealand, Larry Fink, head of
Australia’s Great Barrier Reef, a 2017 Deloitte
Corporates have the unique opportunity
BlackRock told chief executives to “understand the
study aimed to put a value on it by assessing
to focus on a flagship cause of strategic
societal impact of your business”, otherwise they
the economic, social and icon asset value of this
significance. The most impactful corporates are
would lose society’s support and their “liecense to
natural wonder. They calculated that it supports
those who have identified problems that are big
operate” 17 .
64,000 jobs and contributes $6.4 billion to the
Australian economy, and along with its cultural
significance could be valued at $56 billion 16 .
in scale, neglected, and relevant to their industry,
offering or organisational capability.
Take Air New Zealand for example. They have
With this in mind, leading corporates are aligning
themselves with the United Nations Sustainable
Development Goals, and are coming together to
While an interesting statistic, long before this
made a commitment to tackle global climate
form partnerships with other organisations and
study had been conceived many had dedicated
change with a long standing partnership with the
NFPs to help address the world’s most pressing
efforts to address the health of the reef.
New Zealand Antarctic Research Institute. Not only
problems. In many cases these partnerships will
12
The underlying reason we all rally around
causes of social and environmental significance
is because we all want to make a difference in
do the provide monetary support, they are raising
awareness during one of the dullest parts of their
customer’s experience – the safety demonstration
(see following YouTube video). In just a few days
strengthen individual business cases, but when
asked why they are doing this, leaders respond
“put simply, it’s the right thing to do” 18 .

Why should you care?
EFFECTIVE PARTNERSHIPS WILL
HELP SOLVE THE MOST PRESSING
PROBLEMS OF OUR TIME
13

THE BUSINESS CASE IN PRACTICE
Loyal and more profitable customers + engaged employees = greater shareholder value
Now that you have research backed business case
drivers, let’s use a hypothetical example to bring
this business case to life.
Here we compare two similar paper
manufacturing businesses, Paper for Profit and
Paper for Purpose.
Paper for Profit has been around for 25 years and
traditionally monopolised the paper manufacturing
industry in the region. Five years ago a new
competitor Paper for Purpose emerged, offering
the same product but in an environmentally
responsible manner, and has managed to attract a
number of customers as a result.
Both organisations now have the same number
of customers and employees, however Paper for
Profit focusses purely on maximising short term
profits. Paper for Purpose on the other hand, has
a social purpose embedded into its organisation’s
DNA - to regenerate more forest than their paper
manufacturing consumes. They want to leave the
planet in a better place than when they started.
Paper for Purpose make their intent extremely
clear in all marketing efforts, and in turn, have
attracted an extremely loyal customer base who
understand that a responsible product often
comes at a price. Regardless, their consumers are
happy to pay more for their product as it serves
their social conscience.
Recognised for its efforts, Paper for Purpose
quickly became the region’s employer of choice,
with people lining up to work for them. They
attract and retain the best talent on offer, those
who are more productive, creative and ethical
- who also put in higher levels of discretionary
effort. The passion their workforce has for
their company brand and the work they do is
impressive, especially given their product, paper,
isn’t the most innovative on the market. As a
result, Paper for Purpose realises less employee
turnover, lower employee onboarding costs and
higher rates of knowledge retention than its
competitor.
Have a look at the following table to see how
the two organisations compare from a revenue,
organisational efficiency and social outcome
perspective.
14

Financial Outcomes
Social Outcomes
Paper for Purpose planted the equivalent of
$10M
Paper for Purpose generates $10M more
shareholder value than its non socially minded
competitor, realising a 235% ROI on their Social
Investment
337k Trees
674 international rugby fields of trees last
year, delivering on their purpose to regenerate
more forest than their paper manufacturing
consumes
Paper for Profit
Paper for Purpose
Has Social Investment Program No Yes
Social Investment
Corporate donations $0 $3,010,000
Employee donations $0 $180,000
Corporate matching employee donations $0 $180,000
Volunteering (days) 0 1,500
Volunteer value (time away from office) $0 $625,000
Goods & services value N/A N/A
Cost to manage program (FTE, Tech etc) $0 $450,000
TOTAL Social Investment $0 $4,265,000
Organisation Return
CUSTOMER LOYALTY
Number of customers 80,000 80,000
Customer churn rate (pa) 10% 5%
Customer acquisition savings $0 $4,252,000
EMPLOYER OF CHOICE
Number of employees 5,000 5,000
Volunteering participation rate 0% 30%
Employee turnover (pa) 12% 9%
Employee turnover savings $0 $6,450,000
Employee productivity savings $0 $3,600,000
TOTAL Organisation Return $0 $14,302,000
Paper for Profit
Paper for Purpose
Has Social Investment Program No Yes
Social Outcome Assumptions
Cost to plant (fully loaded per tree) 0 $10
Trees per Hectare 0 500
CO 2
tonnes captured p/Ha tree lifetime 50 yr $0 $14,300,000
Social Outcomes
Trees planted 0 337,000
Football fields of reforestation 0 674
Captured Carbon (tonnes) 0 67,400
This hypothetical examples assumes the following
- Employee volunteering efforts are focussed on planting trees
- Does not include the social value generated from the donation of goods and services
- Does not factor in any assumptions around the price premium which could be applied for ethical products
- Organisational revenue $1,700M - Corporate donations pa 1% of profit
- Organisational profit 319M - Employee donation participation 12%
- Customer acqusition cost $1,063 - Avg employee donation $300
- New employee onboarding costs $43,000 - Avg volunteer commitment 1 day
- Volunteer productivity savings $2,400 - Avg employee wage pa $100k
ROI
Profitability Uplift $0 3%
Improved Shareholder Value $0 $10,037,000
Return on Investment N/A 235%
IMPORTANT
As with any business case, never over promise to under deliver - your reputation is at stake! While the turnover costs and productivity gains used in this model are based on solid research, if the benefits look unrealistic, dial them back.
Every organisation is different so If you don’t feel these drivers or assumptions reflect your organisation’s situation, work with your HR and Finance leaders to determine figures relevant for your company. It will give you the valuable opportunity to
engage them early, to get their input and support for your business case. Gaining the necessary cross functional support for an initiative like this is a crucial ingredient for success.
15

GAINING LEADERSHIP SUPPORT
Establishing a meaningful connection with consumers and your workforce provides the competitive edge to
improve profitability and transform your organisational culture.
We now know that being a responsible
organisation that gives back makes good business
sense, and that brand protection and market
share depend on the extra mile a business is
willing to go to for the benefit of its stakeholders.
So how can an organisation like yours get
leadership support for a purpose led corporate
giving program? There’s no doubt that the
numbers are important. The first two business
case factors around customer loyalty and
employee engagement speak to the rational
part of our brain: the dollarised proof that
demonstrates the benefits generated through
purpose led change.
And this has been proven. A study on S&P500
companies demonstrated that purpose led
companies outperformed the market by a factor
of 10x between 1996 and 2011 6 .
The third factor of the business case speaks to the
emotional part of our brain: put simply, it’s the
right thing to do. People think rationally and
make decisions emotionally.
By understanding the underlying motivations
of your leadership and stakeholders, you can
support your rational fact base with a crafted story
that engages their emotional side. We suggest you
step in to the shoes of your leaders to understand
what their motivators are. Every individual is
different, but to get you started here are some
of the common motivators for leadership within
large organisations.
16

GAINING LEADERSHIP SUPPORT
Craft your message around what your leaders care about
CFO
Head of CSR/Foundation
CEO
Head of HR
Employees
What interests your CFO
What interests your Head
What interests your CEO
Staying one step ahead
to lead the company into
the future and maximise
shareholder value
Increasing shareholder return
by improving customer
profitability and operational
efficiencies while reducing
reputational risk
What interests your
Head of HR
Being recognised as an
employer of choice to attract,
motivate and retain high
calibre talent
of CSR/Foundation
Defining and embedding
a community investment
program that generates
unprecedented social,
environmental and corporate
value
What interests your
employees
Undertaking meaningful work that
provides learning opportunities
and exposure for career
advancement
Now you have the tools to construct your own business case, get started on making purpose led corporate giving a priority on your leadership’s
agenda. In the meantime we’ll be pulling together Part 2 of the paper: WHAT best practice, purpose led corporate giving looks like.
Stay tuned and sign up for our newsletter to get it delivered to your inbox.
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REFERENCES
1.
Giving Australia 2016 Research
2.
Nielsen (2015) The Sustainability Imperative
3.
CONE (2015) Cone Communications/Ebiquity Global CSR Study
4.
Deloitte (2016) The 2016 Deloitte Millennial Survey
5.
CECP Corporate Leadership Council (2015) Giving in Numbers
6.
EY (2016) PURPOSE: Can a purpose, beyond profit, really drive results and
long-term value?
7.
Fitzsimmons, C. (2014) How Thankyou Group cracked the hand wash
market with the most expensive product in the supermarket
8.
BBC News (2016) VW profit tumbles 20% in wake of emissions scandal
9.
Nielsen (2017) Global Trust in Advertising
10.
Newell-Legner, R. (2008) Leader’s Guide: Secrets to Keeping Our Customers
Happy
11.
Harter, J. and Mann, A. (2016) The World Employee Engagement Crisis
12.
The Centre for International Economics (2016) The economic value of
pathology: achieving better health, and a better use of health resources
13.
Babson College and IO Sustainability (2015) Project ROI: Defining the
Competitive and Financial Advantages of Corporate Responsibility and
Sustainability
14.
Rodell, J. (2013) Finding meaning through volunteering: why do employees
volunteer and what does it mean for their jobs?
15.
World Economic Forum - 3 ways millennials are changing the world of work
16.
Deloitte (2017) Deloitte Access Economics: At what price? The economic,
social and icon value of the Great Barrier Reef
17.
Financial Times 2018 - The shareholder-first corporate model erodes public
support
18.
Purposed Corporate Social Impact Challenge 2018 - corporate attendee
survey
ACKNOWLEDGEMENTS
Purposed acknowledges the work of Sarah Wilson, Chris Cousins, Katherine Jude, Tom Ferrier and Spark Strategy in the production of this publication.
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Disclaimer: this publication is intended as a guide only and is designed for discretionary use. It does not replace the requirement to obtain specific operational, legal, insurance, or other advice. No
person should act or rely upon the information contained in this publication without first obtaining advice from an appropriately qualified professional. Purposed disclaims all liability and responsibility
(including arising from its negligence) to any other parties for loss, damage, cost, or expense incurred or arising out of any person using or relying on the information contained herein. Purposed
accepts no responsibility for any errors or omissions in the information provided, nor the effect of any such errors.

Who is Purposed?
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embed strategic best practices and leading technology to
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We promote more corporate investment in to the social
sector, by
• making it easier, more meaningful and more rewarding
for organisations and their employees to participate
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• directing contributions to leading impact partners that
achieve greater impact
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articulating the outcomes of your investment
Our unique approach and best practices help organisations
generate up to 3x more investment, directed in better ways
to ultimately deliver more and better social impact.
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