INVESTMENT IN GOOD DEEDS

Do a good deed and throw it into the sea. If the fish don't appreciate it, the Creator will", says the Azeri proverb which advises people not to boast about their own good deeds. Naturally the philosophical idea contained in the proverb is quite obvious: good deeds should not just be done to gain the approval of society, but because heart and conscience dictate the need for them.

But the fact is that today we live in a world where acts of charity offer a good opportunity to advertise ourselves and even help businesses to get on. It is not really important whether a needy individual does actually get help, but the end justifies the means…

Of late, Azeri companies have become aware of the benefits offered by advertising their sponsorship and the concept of "corporate social responsibility"(csr) is by no means unfamiliar to them. True, local businessmen do not always manage to understand the global purpose of csr for the moment and sometimes they use this item of expenditure to cover nearly all their social and charitable activity, while this type of sponsorship should really provide backing and financing for long-term projects that benefit society.

Increasingly popular 

Jeanne Meister, a Western expert, believes that that the growing popularity of csr is due to producers increasingly focussing on goods' production and today's employees wanting more than just wages from their employers. They need to feel proud of the job they are doing and to get job satisfaction, which gives them a sense of being useful to society in making profits for the company. The public in their turn prefer goods produced by an enterprise that uses its income to implement social and ecological projects.

Theoretically a voluntary move on the part of companies, corporate philanthropy has long become an obligatory prerequisite for a successful business in the developed world. Jeanne Meister notes that since the whole world started to take an interest in csr, it has been hard to stop this movement. Every year more than 9,000 companies release more than 40,000 csr-related accounts.

Csr forms a component part of the way corporations are run and is not simply its contacts with the public in general. When it is applied correctly it forms a powerful factor in strategic development, boosting the business reputation and competitiveness, and also the growth of the company's market capitalisation.

According to csr experts, social innovations instituted within a csr-related strategy not only allow the company to demonstrate its attitude to civic society, but also become an important marketing tool, offering it the possibility to distinguish itself, to develop new products and directions, to create an emotional tie between the brand and the consumer, thereby promoting the growth of customer loyalty.

They believe that the advantages that pursuing a corporate responsibility strategy offer companies include giving employees greater job satisfaction, reducing staff turn-over and boosting the value of the brand. Firms that do not become involved in this strategy miss business opportunities, lose a competitive edge and are not keeping up with the times in administering their company. In failing to introduce a csr-related strategy, first of all they are not keeping track and control of the impact of their products on the public and the environment, and, secondly, they are not realising their economic potential to the full.

It should be mentioned that at the present time there are approximately 30 international csr-related guidelines. They are intended for the assessment and monitoring of csr-related measures as well as for providing accountability in this field on a corporate level. Even major well known companies find it hard to keep to these guidelines, but the striving to achieve this today is a principal requirement for maintaining a positive image.

From charitable giving to corporate philanthropy 

References to the term "corporate giving" began to appear in the press releases of some companies in Azerbaijan back at the start of this century. Major companies set up with the involvement of foreign investors were the trailblazers. But right from the start, and this trend is unfortunately continuing to this day, the Azeri companies began to emphasise the charity element of it more. Thus, visits to old people's homes, orphanages and so forth on public holidays, providing material aid to the needy are happily marked down in the "csr" column of expenses and presented to the public as fulfilment of corporate responsibility commitments.

There is however a fundamental difference between charitable giving and csr. "True, there were companies that were involved in tree planting, drawing up reports on the market, implementing minor projects, but they did form part of a systematic drive forwards," Rashad Jamal, the director of Azerbaijan's CSR organisation, who is involved in researching and introducing corporate philanthropy, notes. According to him, companies' marketing departments frequently did not even have an elementary grasp of the principles of csr, and most of all they lacked information about it.

Moreover, corporate social responsibility does adhere to definite guidelines, the first of which is that the means invested in the projects do need to result in a return of the investment (not immediately, but in time, in the form of increased sales, a growth in consumer trust and so forth, i.e. ultimately in boosting the company's profits). The second and third requirements are the compliance with legal rights and ethical norms regarding the company's employees, which actually forms the basis of corporate management. This means that the management should initially establish order in its own organisation, minimise any harm to the environment caused by the enterprise's activity, use the available resource economically and comply with employees' labour rights and so forth and only then publicly busy itself with an additional social project.

"Let's say that there is an enterprise operating in Azerbaijan, whose production is extremely harmful to the environment. It carried out a tree-planting campaign and announced that it was doing this within a csr-related framework, i.e. it was fulfilling its commitment to society, off-setting the damage it was doing by implementing a social project. This is a fundamental untruth," Rashad Jamal asserts. "In other countries the public is very sensitive about things like this; there have been examples of millions being paid in compensation where the "harmful" activity of producers is uncovered, where the rights of their employees have been violated, but for the moment nobody takes any notice of such activity in our country," the expert noted.

The fourth important csr-related guideline is that the projects must definitely be on-going. This means that it is by no means a single act of giving out presents and aid. The latter is charitable giving and this is how it should be presented to the public. "I can moreover say quite confidently that this type of sponsorship can do more harm than good. For instance, when those living in orphanages get used to receiving free gifts, this gives them the idea that society is obliged to take care of them forever. Thus, once they leave their boarding school, they simply do not understand that food, clothing and accommodation has to be earned and regard themselves as outcasts and ultimately they very often turn to crime as an easy way out," R. Jamal thinks.

It is quite another matter when a company takes on the commitment to pay for the training of 10 older orphans, let's say, to become seamstresses or tailors, another holds a drawing competition for talented children and pays for their instruction, organises an exhibition of their works and introduces them to the public. It is not sufficient just to purchase medicines to improve children's health; this needs to be accompanied by a campaign of games and activities to teach people about hygiene and ways of avoiding diseases and so forth.

"A csr-related project can be rolled out over five years and subsequently provide society with talented artists, musicians and doctors, and the investment in it will be well worth it," the expert says. 

Justifiable advertising 

In the above-mentioned cases, the companies' advertising of their involvement in csr-related projects is completely justified, since this attracts even more entrepreneurs into the movement. 

It has to be said that there is a definite formula regarding the art and application of corporate philanthropy. On the whole, it takes at least 10 years for the public and business circles to "get the idea" of promoting and carrying out projects that are really beneficial to society. This is what has happened in Azerbaijan, although there are not that many companies that are pursuing csr-related guidelines today, but those that do are already competing with one another for projects to take up. This in itself provides a sufficiently good impetus for the movement to develop further.

In the main it is telecommunications firms and commercial banks that are competing with one another. It is important that they are not competing for the number of projects, but for the substance of these projects and their benefit to society," R. Jamal noted.

However, taking into consideration the existing problems, there is still a need for the content and effectiveness of csr-related projects to be monitored by the public and certain administrative bodies. Then corporate philanthropy will gradually become a basic idea entertained by corporate administration and management, as it is in most developed countries. Small and medium-sized businesses are expected to become involved in this movement, something which is not happening at the moment.

This is vital in that very important ecological, social and economic problems will then be tackled without the intervention of the state.