When a natural disaster hits a location, how does – or should – corporate social responsibility (CSR) kick in, and when?

CSR efforts also help employees take pride in the companies they work for

CSR has become a business byword, with CSR programmes plugged into corporate budgets around the world. In some cases, these may include funds that would have been spent on charitable endeavours anyway; in others, CSR is a new long-term commitment.

Of course, CSR is not just about donations. Richard Welford, a director of CSR Asia, defines CSR in his organisation's newsletter as a corporation's efforts to be "corporate citizens, to pay taxes, make donations, protect and conserve the environment, provide job opportunities in the local economy, guarantee employees' safety and welfare, and contribute to the local social network. Good companies want a harmonious relationship with the society they are part of and seek sustainable growth."

What happens when a natural disaster, such as a hurricane, earthquake, tsunami, or a man-made disaster, such as happened in New York, London and Madrid, occurs? How does – or should – CSR kick in, and when?  How should these contributions of cash, products or personnel be handled?

After Hurricane Katrina, over 100 giant Wal Mart trucks roared into towns across the devastated areas of Louisiana and Mississippi, bearing commodities such as water, nappies, and toothbrushes. This in-kind donation, in addition to the USD 17 million cash Wal Mart gave to relief agencies, was gratefully accepted by people who had lost everything – many had yet to be assisted by the Federal Emergency Management Agency of the United States. On the other hand, it was undeniably a high profile opportunity for Wal Mart to show it cared in an area replete with customers and potential customers. Would it be churlish to suggest that this kind of contribution was also a marketing effort?

In a story about the response to Katrina in the New York Times (14 September 2005), writers Katie Hafner and Claudia H. Deutsch maintain "Corporations are rising to the challenge out of a spirit of charity but also to burnish their image."  Some would see these as win-win situations in a free market economy.

One way that corporations provide aid after a disaster is to partner with their customers, asking them to add a token amount to each purchase of goods such as groceries and electronics. These add-ons are earmarked for a disaster aid fund and matched by the corporation. Recently, Bruno's, a grocery chain in the South-eastern US, presented a check to the American Red Cross for USD 1 million for Katrina relief, the results of a joint effort between the stores of the Food World/Bruno's group and their customers.  After the tsunami, according to US Chamber of Commerce figures, Amazon.com alone mobilised USD 15 million in customer donations. Numerous television networks raised more than USD18 million by airing a benefit concert featuring a variety of celebrities and musical acts.

Involving customers and other individuals in these efforts works on a variety of levels: it allows individuals to contribute easily; it creates partnerships between customers, corporations and communities; it provides opportunities to illustrate CSR at its best, and, most importantly, it delivers assistance to those people in need, sometimes more quickly than public agencies can do.

According to Deborah Leipziger, author of 'The Corporate Responsibility Codebook' and director of Social Accountability International in the Netherlands, "CSR efforts also help employees to take pride in the company they work for.  These efforts may also help to attract new employees, as well."

Susan Cruz, Regional Vice President of Merrill Lynch based in Pensacola, Florida, on the ravaged US Gulf Coast, when asked what CSR means in a crisis also focused on employees. "Number One," she said, "is take care of your own people and their families, which takes one group of people off the table" as far as emergency needs go.  
   
Professor Kanika T Bhal, associate professor in the Department of Management studies in India's IIT, wrote in the Business Standard that, "Appropriately made donations, along with a sense of responsibility towards the stakeholders, reflect CSR; just donations, in the absence of responsible stakeholder management, run the risk of being perceived either as a marketing effort or a token of political correctness."

In the aftermath of the tsunami in the Indian Ocean, many companies donated to charities working with the victims, caring little about whether there was a market base in the devastated areas. However, according to CSR Asia, aid agencies and NGOs are still suspicious about the motivations behind corporate efforts to alleviate poverty, despite the fact that these efforts have exceeded other contributions.

The Center for Corporate Citizenship at the US Chamber of Commerce reported that more than 500 member companies provided over USD 500 million in aid after the tsunami. Almost 150 US companies made cash and in-kind contributions exceeding one million dollars each.  Until Hurricane Katrina, these total contributions were second only to those given after September 11; the Chronicle of Philanthropy, Washington, now estimates that the corporate donations after Katrina will exceed those after September 11.
      
Deborah Leipziger believes that "it is far more sustainable for companies to work over the long-term on issues, rather than just in times of crisis.  More and more companies are referring to the Millennium Development Goals and thinking about how they can promote these goals, which include sustainability, education, health and gender equality. "

That said, even companies with long-term policies and goals in place will be faced with decisions about response to disaster. Ollie Davidson, the senior disaster assistance advisor of the Center for Corporate Citizenship of U.S. Chamber of Commerce, agrees that long-term efforts must be paramount. On the organisation's website, he advises companies attempting to coordinate disaster relief with CSR policies to do the following:

• If your company is going to give to disaster relief, visit http://www.cidi.org/ for background information, needs assessments, and links to reputable disaster service providers.
• Give to established, credible organisations.  Start-ups may have the best of intentions, but the lack of experience can be costly, and in some cases, they may be set up for fraudulent purposes.
• To research a non-profit, visit http://www.guidestar.org/ or http://www.charitynavigator.org/, or http://www.give.org/, the Better Business Bureau's (USA) website.
• Most disaster relief agencies prefer cash because it gives them greater flexibility to meet needs on the ground.  If a company wishes to donate products, http://www.giftsinkind.org/ is a reputable information source, as are usaid.gov and cidi.org.
• Don't feel guilty about aligning your philanthropy with your business services.  Do what you do best.  Recognise that philanthropy is not a sustainable solution for the long-term: job creation, business restoration and economic development are vital for the rebuilding of impacted communities. 
   

The following sources were utilised in the development of this article: CSR Asia (CSR-Asia.com), New York Times, The Economist, Business Standard, US Chamber of Commerce Center for Corporate Citizenship (www.uschamber.com/ccc).

November 2005

Sharri Whiting specialises in reporting on business and cross cultural issues.

Subject: Corporate social responsibility and HR, CSR, HR and disaster  relief