Abstract
In conditions of unequal access to market opportunities and distinctive financial capabilities, charitable organizations can operate on different principles and strategies to achieve their goals. However, there are general approaches both non-profit and for-profit firms follow, particularly corporate social responsibility and fundraising. Some organizations use individual income from commercial activities, and some firms, to which social enterprises belong, attract donors as key sources for fundraising. In this paper, the key differences between the strategies of corporate social responsibility and social enterprise are outlined, and, by using the example of two organizations, particularly Adidas and Groundswell, these concepts are examined, respectively. Drawing attention to acute social or environmental issues is the primary goal of most fundraising activities. The analysis of the groups in question proves that, although their principles of maintaining relationships with donors differ and are based on distinctive business strategies, common forms of communication are preserved, and the Christian values of external giving and moral order are promoted.
Keywords: fundraising, organization, strategy, activity, social, corporate
Introduction
A socially-oriented business is a commercial activity aimed at solving or mitigating social and environmental problems. Such activities are self-sustaining and are characterized by financial sustainability. When planning the creation of a new business, one should pay attention to the social component since this aspect is common in the modern business environment. Appropriate concepts help provide a sustainable source of income and, at the same time, contribute to solving social or environmental problems. Socially oriented businesses can manifest themselves in such models as corporate social responsibility (CSR) and social enterprise. Each of these approaches can be applied by non-profit organizations whose main purpose is to raise funds through donations. This work is aimed at assessing the relevance of the application of CSR and social enterprise practices to fundraising, as well as comparing two specific non-profit organizations’ approaches to attracting and retaining donors. Effective strategies of socially-oriented businesses allow addressing urgent problems concerning various aspects of life, and in conditions of market competition and a constant struggle for leadership, relevant business models play an essential role in shaping the image of non-profit organizations.
Corporate Social Responsibility as a Business Concept
Main Principles
CSR is a unique approach to business, which is to promote socially significant issues as areas of activity for organizations. According to Harrison (2019), this approach can target different stakeholders, for instance, employees of the company or society as a whole. CSR is not necessarily related to the main activity of the organization and can be part of its business when the corresponding tasks are addressed based on their relevance. This approach is regulated by legal requirements and cannot be carried out uncontrollably since reporting is a mandatory criterion that determines the CSR of a particular organization.
Through this practice, a socially significant effect is realized, which is an impact on society and the environment. This effect is measured in the quantity and quality of positive changes achieved. The goals of introducing CSR into organizational activities are both the desire to make a profit and the need to develop the community by solving significant social and environmental problems (Hoque et al., 2018). What distinguishes CSR from social enterprise is that the profits obtained as a result of activities are distributed among the founders and reinvested in the business, which speaks of advantages for different stakeholders.
Effective CSR implementation is available not only to large but also to small and medium-sized businesses. The main difference that is observed among companies of different sizes and with a distinctive financial background is the scale of CSR projects. The gradual introduction of specific steps can be carried out based on the available resources, and in the future, the range of coverage of socially significant issues can be expanded. As already mentioned, an important principle of CSR is reporting (Harrison, 2019). The socially-oriented activities of an organization can be reflected in different sources, be it media resources, individual websites, or interviews. Nevertheless, the implementation of CSR should be reflected in special reports that are effective communication tools and can increase both social and economic impacts.
An example of a successful implementation of corporate social responsibility can be a project that is aimed at improving the comfort of life for people with disabilities. For instance, an organization can participate in a crowdfunding campaign to raise funds to purchase a gynecological chair that meets the needs of women with disabilities (Wofford et al., 2016). This example is a manifestation of external CSR focused on the development of the local community. Internal CSR involves improving the well-being of employees and may include projects to optimize teamwork through volunteer programs. Any of these scenarios involve pro bono costs designed to address current social or environmental issues.
Although CSR is a form of donation, this business model is common not only for non-profit but also for commercial organizations. Various large companies with global market activities are involved in CSR projects, which affects their reputation positively and, in addition, softens the tax requirements imposed on them. As Harrison (2019) notes, for non-profit firms, this activity involves establishing partnerships as a mechanism to implement the tasks as efficiently as possible under a limited budget. In any scenario, CSR is an approach that is based, first of all, on giving instead of gaining. Therefore, in an organization of any profile, such a business model can be promoted, reflecting the interest of management in making efforts to help vulnerable communities or to solve environmental problems.
CSR in Relation to Fundraising
Participating in charitable activities is one of the ways of utilizing the resources allocated in accordance with the strategy of corporate social responsibility. This can be realized by partnering with a local or national non-profit organization and participating in fundraising. As a relevant example, De Guzman et al. (2021) consider fundraising campaigns initiated to support the restaurant business facing an acute crisis in the era of the COVID-19 pandemic. Collaborations can be established with different firms that conduct non-profit activities, and fundraising procedures can involve both employees and company leaders, as well as outside partners. This is the essence of CSR as a strategy that brings together the efforts of different participants to achieve the assigned tasks. From the perspective of addressing acute social and environmental issues, this practice is valuable and helps charities significantly.
Social Enterprise
Main Principles
A social enterprise is a business project that is implemented by individual, small, and medium-sized enterprises. As Defourny and Nyssens (2017) argue, this model of work has clear goals for achieving social change and specific impact groups. In addition, social enterprise has a plan to achieve these goals in the course of business activities. As impact groups, one should mention the social strata of the population, which are the beneficiaries of the activities of socially-oriented businesses (Defourny & Nyssens, 2017). These can be, for instance, vulnerable communities that have difficulties in finding a job or groups of the population that use the final services and products of the business. The goal of social enterprise is to fulfill the social mission, and the profits are reinvested in social programs or cover current expenses.
The social mission is the company’s value vector in the field of social change, which determines the characteristics of its activities. This may include solving the problem of plastic recycling in a certain region or helping people who have problems with finding a job. Most often, social entrepreneurs are representatives of the public sphere, for example, individuals from the non-profit sector or employees of the education system (Defourny & Nyssens, 2017). Social enterprise makes it possible to have a sustainable source of income for the development of the project. The main problems of beginning social entrepreneurs are the lack of knowledge about building business processes, competing in the market, and choosing the optimal development strategy.
As an example of social enterprise activities, one can mention the work aimed at helping people suffering from any form of addiction through their employment and support (Best et al., 2018). Some of the goods produced can go to charity events in children’s social shelters and boarding schools. Thus, the principles of building a social enterprise model can be different and are implemented through unique entrepreneurial approaches.
Social Enterprise in Relation to Fundraising
One of the challenges of social enterprise is to find new, innovative, and donation-friendly fundraising methods. Traditionally, these businesses raise funds by organizing mass events and charging tickets. When raising funds to invest in their own activities, income from lotteries, exhibitions, sporting events, dance competitions, and other recreational activities is usually not taxed. Modern fundraising campaigns organized by social enterprises are in crisis because, as Farhoud et al. (2021) state, the COVID-19 pandemic has reduced the activity of charities significantly, and most forms of mass events have become unavailable due to sanitary restrictions. Nevertheless, while taking into account the nature of the work of such projects, the attraction of potential sponsors can be carried out online since such a mode of interaction has become a key one in modern realities. As a result, social enterprises can conduct effective fundraising efforts and, despite current constraints, the overall strategy is productive and conducive to targeting charitable projects.
Comparison of the two Organizations
Adidas
Adidas is one of the largest corporations manufacturing and distributing sports goods and workout equipment, including paraphernalia and digital gadgets. This company is respected in its segment, and the use of the CSR strategy is a confirmation of the organization’s global business and its interest in increasing brand value and strengthening the loyalty of its target audience. As an activity designed to address the pressing problems of modern time, Adidas promotes a charitable program that is aimed at drawing attention to the issue of ocean pollution, and stimulating the physical activity of buyers through the organization of a special fund is a fundraising mechanism (Teague & Curran, 2019). For every kilometer that a person runs and registers this in a special application, the corporation donates one dollar to support the protection of the ocean (Teague & Curran, 2019). This practice is of interest to the public worldwide and is a convenient tool for drawing attention to the proposed problem.
Such activities comply with the basic principles of stimulating social interest in contemporary issues. As Maehara (2002) states, this form of communication with the target audience is “a connection between a donor and an organization” when a buyer realizes one’s contribution to the high goal (p. 32). By using its main line of business, particularly the sale of sportswear, footwear, and accessories, Adidas creates non-standard conditions for interaction with customers, at the same time demonstrating interest in the problem of environmental pollution. The corporation does not use federal funding and allocates money from its own revenues, which, according to Harrison (2019), is the basic principle of CSR. As a result, the company is successfully building brand loyalty while addressing an environmentally sensitive issue.
Groundswell
Groundswell is a social enterprise that has its own charitable foundation. The key goal is to support social minorities, including racial, sexual, and gender criteria, and to work towards the advancement of reproductive justice (“Groundswell’s approach,” n.d.). The organization seeks to ensure equality in society and relies on the social challenges that the aforementioned minorities face in various spheres of life, including employment, starting a family, and other aspects. Fundraising activities are carried out directly through a special fund in which interested citizens are members and donate. Groundswell is leading additional activities promoting important climate protection projects, health services, and other fields. However, social work based on the advancement of social justice is the foundation of the social enterprise’s charitable activities.
The principles Groundswell adheres to in its fundraising work are consistent with the rules for interacting with donors. Maehara (2002) mentions the Donor Bill of Rights and notes several important factors to take into account when conducting charitable activities. Among them, the author highlights information about the mission and objectives of the organization, the transparency of financial flows, a professional approach to each donor, honesty in the distribution of funds received, and some other aspects (Maehara, 2002). Groundswell, as a social enterprise with a long history of philanthropy, follows these guidelines responsibly and offers everyone an opportunity to familiarize themselves with the policy and related documents and reports. Therefore, while taking into account the social nature of work, the organization leads its activities in the right direction and adheres to the necessary conditions for communicating with donors, thereby maintaining the interest of the target audience in its projects and encouraging new participants to join Groundswell programs.
Common and Distinctive Features of Maintaining Relationships with Donors
The main similarities between the two organizations reviewed in relation to fundraising principles and maintaining relationships with donors are transparent goals that address pressing contemporary issues. Adidas and Groundswell are groups that bring together many people and have a stable target audience that trusts them. In addition, both organizations provide financial support rather than any other type of charitable assistance, such as donating clothing, food, or medications. These factors bring the groups closer in terms of approaches to engaging with donors since money is the main tool used in donations.
At the same time, there are more differences than similarities between these organizations in terms of fundraising principles and maintaining relationships with donors. Firstly, Adidas is engaged in charitable activities that address environmental concerns, such as ocean pollution, while Groundswell is committed to purely social work by promoting the ideas of gender, racial, and class equality. Secondly, Adidas uses its own profits from commercial activities, which is consistent with the CSR principle and reflects the individual interest of the corporation in addressing a specific issue. Groundswell, by contrast, uses primarily donated resources that are not pure profit. Thirdly, unlike Adidas, Groundswell cannot count on advertising as one of the positive results of charitable activities, and the idea of engaging donors is key for this organization, while Adidas solves several tasks at once by drawing public attention to the environmental problem and, at the same time, increasing brand loyalty. These factors distinguish both groups significantly and clearly demonstrate how different the CSR approaches and those used by the social enterprise are in relation to fundraising and maintaining relationships with donors.
Nevertheless, even despite these differences, in the overall context, Adidas’ and Groundswell’s activities are consistent with the basic principles of charity, including the biblical canons that dictate the value of helping those in need. Both organizations pursue the joy of external giving, which, as Cheung and Kuah (2019) remark, is an important Christian objective, and while neither group has religious goals, the very principle of philanthropy implies such a practice. According to the authors, this form of maintaining relationships with donors, when important social and environmental issues are addressed, may be viewed as “a sacred moral economy” (Cheung & Kuah, 2019, p. 529). Seizing all available donation opportunities is a valuable activity that aligns with the biblical ideas of goodness.
External giving is not the only feature that reflects the two organizations’ approach to maintaining relationships with donors. Through their activities, Adidas and Groundswell show that it is in the power of people themselves to do good, whether it be real financial aid or another form of support. Cheung and Kuah (2019) mention a moral order that is generally in accordance with God’s laws and includes the responsibility that comes with opportunities. Having the strength and desire to help, a person should not be left on the sidelines, and both organizations emphasize this, despite the fact that they pursue different goals. As a result, the impact on their target audiences is sufficiently strong to unite as many people as possible to achieve a good cause, and this Christian approach deserves respect.
Conclusion
Philanthropy principles promoted by modern non-profit organizations often draw on specific business models and approaches to build sustainable fundraising algorithms. At the same time, as practice shows, not all companies that work to attract donations belong to the non-profit group, and the example of Adidas, as a major participant in the global market, proves this. The CSR principle, which implies using a firm’s own profits to address pressing social or environmental issues, differs from that promoted by social enterprises whose activities are directly related to donor donations. Adidas and Groundswell, as the organizations reviewed, use distinctive strategies of maintaining relationships with donors, but they are doing essential work that, in addition to meaningful social and environmental perspectives, is in line with the biblical principle of external giving and moral order.
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