Ever since Darrell Ert founded ES3 Insurance Services Ltd. in 1998, giving back to the community has always been a priority for the Vancouver-based company. For years each Christmas, Mr. Ert and his colleagues found themselves going through heaps of funding requests from charitable organizations, making donations to as many as they could.
But simply cutting cheques proved only so fulfilling for the organization's team of 10.
"We found ourselves torn and not especially effective in providing financial, emotional or leadership support," Mr. Ert explains. "We're a small organization with a big heart and wanted to put a little more substance to this initiative."
To help turn their goals into action, ES3 enlisted the help of Inspire Canada, a Vancouver-based company that helps companies maximize their competitiveness while making material differences to the communities they serve.
"We come in when a company says, 'We have some philanthropy activities in place, but we want to make sure it has real impact for our company and for society,'" says Inspire Canada founder and president Michael Samson.
Mr. Samson helps organizations identify suitable causes and ways to support them. To do that, he examines and aligns three key elements: the company's corporate strategy; its core competence, or key skill sets; and social issues that resonate with the team, such as health, human rights or environmental conservation.
"The goal is to inspire productivity for everyone's profit," Mr. Samson says. "There's the community piece – solving a problem that a community has – and the subsequent values that spring from that: employee engagement, team development, sense of purpose, and market appreciation.
"We explore how companies can move more deeply in philanthropy."
For the people at ES3, that meant becoming partners with the JustWork Economic Initiative, a non-profit organization that helps people facing multiple barriers to the traditional work force, such as mental illness, homelessness, addiction and physical disabilities, find gainful work opportunities through the creation of social enterprises.
ES3 has committed 1.5 per cent of its profits and one half-day per person per month of volunteer time to JustWork. It also matches contributions up to $500 a year to this or any other charity employees choose.
So far ES3 volunteers have handed out pamphlets promoting JustWork's events, helped pottery program participants sell their wares at craft sales, and assisted the board with the business side of things.
Both parties have been on a steep learning curve, but Mr. Ert says the benefits have been mutual.
"It's all about the give and the get," Mr. Ert says. "It gives us a common cause. It galvanizes our purpose. And it's fun."
Research backs up the business case for active corporate support of social needs.
Potential employees view companies with strong community involvement as more attractive than those without. Employees who are able to access corporate-sponsored volunteer experiences report higher job satisfaction and a greater commitment to their company. And employees say that volunteer programs help enhance their leadership and professional skills. Mr. Samson says that strategy-driven philanthropy can also be described as "the process of creating shared value."
Originally coined by Harvard University business professor Michael Porter, creating shared value refers to the link between social needs and corporate performance. It's a philosophy that is becoming mainstream, in Mr. Samson's view.
Harvard's Prof. Porter and Mark Kramer, who cofounded FSG, a global social-impact consulting firm, contend that most companies remain "stuck in a 'social responsibility' mind-set in which societal issues are at the periphery, not the core."
"Businesses must reconnect company success with social progress," they wrote in the January, 2011, issue of the Harvard Business Review. "Shared value is not social responsibility, philanthropy or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the centre."
With the economy stabilizing, Mr. Samson sees 2012 as a pivotal year.
"I think we're going to find the start of a strong movement toward philanthropy application and business value chain," he says. "This year is key for that because we're still in the innovative stage of the life cycle of this movement. Those that get on board now will have competitive advantage."
ES3's Mr. Ert emphasizes that the desire to contribute to the greater good must be genuine to be effective.
"It's the expectation of the board room and the executive table to encourage giving back," he says. "But if you're myopic and driven purely on profit and scorching the earth, we're all sunk. We all feel strongly that the community we're working in is ours to support."