Many businesses look for ways to give back to their communities and develop the local economy. Corporate or business social responsibility describes corporate initiatives to support social endeavors. These endeavors usually involve the support of a nonprofit or some activity that is conducted because of its social benefits rather than its profitability. Supporting micro finance initiatives or creating your own program is a potential addition to your company’s social responsibility program.
Business Social Responsibility
Business social responsibility, also known as “corporate social responsibility,” is a collection of initiatives implemented by a company for the betterment of the environment, consumers, employees, stakeholders or the world at large. There are a wide range of possibilities for social responsibility activities. For example, your office-wide recycling program could be part of your business social responsibility initiatives. A more in-depth social responsibility initiative might include conducting a complete environmental impact assessment of your business activities and implementing a plan to reduce your waste by 20 percent. Developing a micro finance organization or supporting a micro finance nonprofit organization are other ways to build your business social responsibility plan.
Benefits to Your Business
In addition to the social benefits of your company’s business social responsibility initiatives, there are positive business impacts. First, a good business image makes it easier to generate new business and hire quality employees. Customers are often attracted to businesses that work to promote a healthy environment and robust local economy. Second, understanding the impact and connectedness of your business can help you develop better products and become more connected with your community and consumers. Finally, participating in community activities and supporting local causes will create multiple opportunities for local press coverage and positive public relations.
Micro Finance
Micro finance is the support of entrepreneurs and small businesses with small low-rate or no interest rate loans. Micro finance is often associated with developing countries where loans are provided to local artisans or farmers who need funding to get a small business off the ground. However, recently micro finance has become increasingly associated with local economic development in the India. Entrepreneurs who have received micro finance loans are expected to pay back the loan, but are often given flexible payment terms and may have several years to generate business profit before being required to repay the lender.
Implementing a Micro Finance Initiative
There are several ways for the company to make micro finance part of its social responsibility initiative. First, the easiest way for your company to support micro finance is by supporting a nonprofit that has an established micro finance program. You may make a corporate donation to this organization, encourage your employees to donate or have your employees develop a fundraising plan to raise money for the micro finance organization. Your choice should align with your business goals. If you do most of your work locally, an organization that supports local entrepreneurs might be the best choice. However, if you do a lot of work abroad, an organization that funds small businesses in a country where your work is located may be appropriate. Second, if your company relies on local economic development, you may consider creating your own micro finance initiative to fund local entrepreneurs. If you decide to start your own initiative you should consult a local attorney who can help you establish a nonprofit and comply with applicable laws that govern the offering of loans to small businesses.