Business: How SMEs Can Engage In Corporate Social Responsibility And The Benefits Of Doing So

I recently attended the launch of the three-year strategy by Safaricom Foundation that centres around four pillars of education, health and economic empowerment and it struck a curious thought. At the event, it was clear that Safaricom was going all in with both the MPESA and Safaricom Foundations and part of the reason was that the business can only thrive when its users and the community it operates in is empowered enough to purchase from them.

This got me curious since the majority of businesses in Kenya (98 % according to the Central Bank), are Small and Medium Sized Business (SMEs), do they have a role in giving back to the community through CSR? If empowering communities to continue supporting businesses is vital to the sustainability of enterprise, does that mean that by SMEs not engaging in community service that they are actually shooting themselves in the foot?

Well, Safaricom spends up to Ksh.350 million on CSR projects countrywide through the Safaricom Foundation. However one can argue that Safaricom made a Ksh.55 billion profit for the year ended March 2018, SMEs don’t have that kind of money and that spending on CSR would hurt their operation.

However, that kind of thinking is far from the truth, a thesis by Cristina Manescu at the University of Gothenburg School of Business, Economics and Law titled Economic Implications of Corporate Social Responsibility and Responsible Investments found that CSR activities had no negative effect on profitability. Meaning that even if SMEs with limited resources engage in CSR, they will not affect their bottom-line. Here are simple ways SMEs can do CSR.

 

CSR for Small and Medium Sized Enterprises (SMEs) image from http://media-assets-03.thedrum.com/cache/images/thedrum-prod/s3-news-tmp-114803-csr-definition-large–2×1–940.jpg

Simple Ways SMEs can do CSR

Partnerships

Partnership for the goals is one of the 17 Sustainable Development Goals (SDG) and an SME looking to engage in CSR without having to go through the hustle of doing everything can partner with organisations that do that as their main activity. Rotaract and Rotary clubs throughout the country hold community service projects that you can easily join as a company, including visiting orphanages, building libraries, there is even a project where they visit prisons to interact with and cook chapatis for the inmates.

Another organisation that I have personally volunteered in is the Junior Achievement (JA), who have partnership agreements with companies including Safaricom, Oriflame, NSC Bank etc. JA holds entrepreneurship training programs in high schools and uses mentors from the business community to come and work with students on their projects. Additionally, JA gives students the opportunity to spend the whole day in a company to learn how the corporate world works. This could be a great opportunity for SMEs to host students in their premises and give back, it costs nothing but it is impactful.

Offer Knowledge

If your company deals in a certain skill, writing, weaving, computer programming, music etc. offering knowledge for free as a CSR activity is a great way to give back to the community at minimal cost. The Ghetto Classics Music Program is one such activity where kids from disadvantaged communities get to learn how to play classical and jazz music for free. The Program is sponsored by proceeds from the Safaricom Jazz Festival. Bloggers and writers can teach kids how to write business or creative stories in schools or churches during the holidays, software companies can offer free programming training to disadvantaged communities.

The great thing about passing on knowledge as CSR is that it is sustainable, companies that train high school students on computer programming, reading or art will find it easier to recruit them into their businesses, as they have been trained up to per to the required standards.

That is why you would often find university students under Equity Bank’s Wings to Fly program going back to work at the bank on school holidays and they can seamlessly slip in and out of the company because they already have the training. Small business can benefit from this too, the low skill level of our labour is one of the biggest impediments to Kenya’s competitiveness; free training by the industry as CSR could help.

 

Image result for corporate social responsibility
CSR. Image from http://www.vale.com/oman/EN/aboutvale/commitment/corporate_social_responsibility

Engaging Staff in Communal Activities

Unity is strength and companies have manpower that can greatly contribute to that unity, especially through involving staff in community building activities. If the community where you are based is doing a garbage clean-up, allow your staff to join. If it is tree planting, buy a few trees and allow staff to participate. The initiative doesn’t always have to come from your end, participation can go a long way in community service.

Engaging in CSR has many advantages to SMEs, it creates loyalty with customers who begin seeing your business as a partner rather than a seller. The loyalty created coupled with increased marketing is enough to bolster a company’s brand and set them apart from competitors. CSR enhances relationships with customers, suppliers and partners enabling businesses to increase their networks and creates room for future collaborations.

According to NiBusinessInfo, some of the benefits of CSR include better brand recognition, positive business reputation, increased sales and customer loyalty, operational costs savings, better financial performance, greater ability to attract talent and retain staff, and organisational growth.

Additionally, CSR enables SMEs to participate in building the welfare of the communities they so much depend on, which comes back to benefit them as communities are empowered to keep on purchasing from them. As you think about that, check out this article by Forbes on Why Corporate Social Responsibility Takes Precedent Over Reputation.

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