Why we need to do better at community investment

Community investment should return so much value to a business that it attracts greater funding each year – a new EY paper explains how.

Three questions to ask:

• How can we better align our community investment portfolio to increase social impact and drive better outcomes in critical issue areas?
• What changes do we need to make to ensure community investment generates business value and is elevated to become a core driver of strategy?
• Where should community investment professionals focus their attention to accelerate the overall ESG and sustainability transformation agenda?

Most large companies have some sort of community investment (CI) function overseeing activities like sponsorships, volunteering, matched giving or pro bono work. In 2022, companies across Australia and New Zealand invested more than a billion dollars in structured corporate giving alone. Accounting for in-kind support, community partnerships, pro bono support and volunteering, the total investment would have been even higher.

Our argument is that, too often, these activities are undertaken in ways that fail to drive a measurable social impact and create little to no measurable value for the company making what in many cases represents a substantial and ongoing investment.

The business community has a word for spending significant amounts of money on something without a sense of either the impact or value created: they call it “waste”. Which is why CI functions are typically so low on the corporate totem pole.

As professionals who have spent more than 18 years helping some of the largest brands on Earth build large-scale, brand-aligned CI platforms that create measurable social impact and material value for the business, this breaks our heart.

And it’s prompted us to write a paper.

Our paper synthesises years of global experience and research into a simple model to help practitioners at all levels better conceptualise and execute their community investment so that it delivers measurable and growing business value and social impact.

In it, we suggest that corporate community investment has five “layers”:

1. Paradigm – Core beliefs and assumptions about community investment and its role in the business.
2. Strategic aspiration – The business value and social impact a business aspires to create.
3. Portfolio – The full suite of CI activities across the business, including programs, partners, activities, investments and sponsorships.
4. Execution – The way community investment is operationalised and delivered, including measurement and evaluation, supplier management and procurement.
5. Leverage – Activities to fully realise and amplify the business value of community investment, including business integration, storytelling and stakeholder engagement.