We discussed the shifting focus to social impact and how to create impactful social responsibility initiatives. Now, let’s shift focus to how to measure corporate social responsibility impact and ROI.
Tips on How to Measure Corporate Social Responsibility
Historically, one of the most significant barriers to CSR implementation—as well as leadership buy-in— has been the difficulty of establishing how to measure corporate social responsibility’s impact and ROI. But, calculating ROI is not only possible, but it’s also similar to how many companies already measure the effectiveness of other corporate or marketing strategies.
We discussed how to measure corporate social responsibility with three CSR-focused leaders Jarian Kerekes, TIAA, Julie Wynn, Electronic Arts, and Mercedes Garcia, Mastercard, and below are two key points for measurement.
Social Return on Investment of Your Corporate Social Responsibility Programs
One of the most significant barriers to CSR implementation and leadership buy-in has been the perceived difficulty answering how to measure the return on investment (ROI) of corporate social responsibility programs.
However, when learning how to measure corporate social responsibility, calculating the social return on investment for corporate social responsibility programs is absolutely possible and may even be similar to the methods you use to measure the effectiveness of marketing campaigns. It is a three-part process:
- Set goals – Organizations must make short- and long-term goals to generate benchmarks for success and measurable key performance indicators (KPIs).
- Calculate Value – Use a formula to measure the social return on investment, such as the impact multiple of money metric, which builds on the concept of social return on investment and breaks down this calculation into six steps.
- Track Results – Collect data so you can get insights into whether the program is meeting your CSR objectives, as well as inform your team how to make refinements moving forward.
Evaluate Internal Outcomes, Too
While you’re calculating the financial ROI and measuring the community impact of your corporate social responsibility program, don’t forget to assess other metrics to success as well, such as employee retention. “It’s important to get feedback from the employees,” says Wynn, “to ensure that they had a good experience and that they feel more connected to their teams and the community.”
TIAA put a hypothesis into action by taking a look at their employees. TIAA evaluated employees who got involved in their corporate social responsibility and volunteer opportunities versus those who did not and found a meaningful correlation: employees that participated in these initiatives were more likely to stay employed and to recommend TIAA to their friends. “Engaged employees are more productive employees, they’re happier, and they want to remain at the company,” says Kerekes. “This sort of internal benchmarking is really important to the work that we do.” These discoveries are very important because of the external benefits they provide. These are factors that have to be considered when figuring out how to measure corporate social responsibility.
Conclusion
No matter which intractable social issue your organization determines it will help tackle within your community, it’s important to remember social impact is top-of-mind for increasing numbers of consumers and employees, and companies should see this focus as an opportunity to serve customers better—and gain a competitive advantage at the same time.
Corporate social responsibility programs, once a sideline activity for many businesses, is moving into the center of business plans, driving both strategy and marketing. Does your company know how to measure corporate social responsibility and the impact your investment is having?
The hear the full discussion, watch: Investing in Impact: How to Make CSR a Winning Business Strategy. To learn more about CSR, visit: www.Everfi.com/CSR