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Community Investment for a Changing World

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Community Investment for a Changing World LBG Annual Review 2015 Community investment for a changing world www.lbg-online.net @LBG_CCI A global network Our framework A simple vision We believe that effective measurement aids more effective community investment. Simplifying impact measurement So our vision is simple; we look to a world where every business measures its LBG’s measurement framework is the global standard for measuring the totality of corporate community investment. community investment and shares this in The model enables companies to consistently manage, measure an open, transparent and consistent way. and benchmark their contributions, helping them to strategically progress their community programs. LBG’s wide use is rooted in its simplicity, inclusivity and flexibility: any company at any point of the measurement journey More than 220 companies around the world share this vision and can apply the model, whether at the beginning of recording make up LBG’s network, which provides a platform for companies contributions or in the advanced stage of assessing impacts. to work with each other, and with their partners in the community, The framework is integrated into investor ratings like DJSI to improve measurement and make a greater difference. and supports reporting standards like GRI. Practitioner-led, and steered by representative companies from the network, LBG has pioneered measurement so enabling companies to move forward from asking How much do I give? to What difference do I make? Inputs What’s contributed; the resources a company provides to support a community activity. LBG’s geographic spread How: Cash, time, in-kind, management cost Companies in the network are headquartered across more Why: Charitable gift, community investment, than 20 countries. They operate in, and apply LBG assessment commercial initiative in the community across, more than 100. What: Issue addressed (education, health etc.) Where: Location of activity Outputs What happens; the activities delivered, numbers reached, funds raised and business-related activity resulting from the contributions made. Community outputs: Numbers helped, activities held etc. Leverage: Additional funds raised Business outputs: Media coverage, awareness among customers, employees etc. What do we mean by community investment? LBG measures companies’ voluntary contributions to community organizations or activities. Different terms are often used to Impacts What changes; The changes that refer to such activity: Social investment, corporate citizenship, happen to individuals, organisations philanthropy, company giving, social programs, and strategic and the company, in the short or philanthropy are just a few. For LBG’s purposes community longer-term, as a result of the activity. investment is the term that is used to cover all such activity. Community impacts: Change in beneficiaries, organisations and/or society Business impacts: Change in business performance 2 Measurement is about Companies in the LBG network recognize that measurement supports the management and more than numbers effectiveness of the community program; it is not something to be done for its own sake but is a valuable business tool that can drive strategy, improve program delivery and strengthen communications. Like other areas of business performance, you can better manage what you measure. i Inputs Outputs Impacts Measurement Using the LBG framework Benchmarking ensures consistent measurement of provides essential means you know where you stand contributions, results and impacts. management information. in comparison to your peers and best practice. Strategy and objectives Management and delivery Communication and engagement Measurement provides the context Measurement identifies the results for setting strategic objectives and achieved for the community and Data strengthens reporting, associated targets and KPIs. It can the returns to the business. improves performance in external inform a new strategy or assess This can inform and improve indices, demonstrates commitment progress in an existing one. project delivery, energize to external stakeholders and can employees and make the case enhance the employee proposition. for greater investment. Embedding LBG significantly improves impact measurement and therefore helps businesses move from the “how much” to the “so what”. — Pam Webb, Head of Zurich Community Trust and LBG Chair 3 The power of benchmarking Spanning different countries and sectors; LBG enables businesses to compare like for like, gauge 'what good looks like' and set meaningful and measurable goals for the future. — Chloe Keen, Senior Citizenship Manager, Nationwide Our annual benchmarking exercise is core to LBG. The benchmark About the inputs: About the outputs: About the impact: It enables companies to How we invest in communities What happens with our investment The changes our investments make compare their top-line This year’s data combines information across LBG’s international network and so provides the deepest set of benchmark data yet. This depth of coverage helps us to better identify Companies are getting smarter about the Measuring outputs means determining what Measuring impact is about understanding achievements with their trends in community investment and see how the companies that lead the field are taking management of their community programs. happens as a result of community change. LBG enables, and challenges, on new approaches and measurement processes. LBG’s rich input dataset shows how, and to contributions. It’s an opportunity to take the companies to establish how they effect peers as well as within and what extent, things are changing. From the temperature of engagement and see some change in the people and the organizations across sectors. The insight basics of how companies contribute through results. The numbers of people reached, that they help, as well as the employees that the drivers for community activity and on to the organizations supported or the support their programs. As a result, the they obtain puts them in a new ways of delivering benefit; the data additional funds brought to community culture is changing, with more companies stronger position to make highlights where LBG members are pushing programs from sources such as employees assessing their programs to establish where the dial forward. or customers are all markers by which and how they are having a genuine impact. strategic decisions about % companies in LBG can assess their progress. their community programs. $ Some highlights from the How the contribution breaks down Reaching the people that need support Changing lives for the better 2014-15 benchmark are of beneficiaries made positive people have directly benefited shared here. 67% cash changes in behavior, from the contributions of 21% improved their well-being 93m companies in the LBG network 41% 20% in-kind and 13% acquired new skills 7% time Companies Combined Countries where actively revenue of companies in 173 participated in $2.3t companies in the 130+ the network $ 6% management costs the benchmark benchmark are making contributions Making strategic contributions Supporting the non-profit community of inputs support strategic organizations have been A global contribution community investment supported by the LBG network % projects or commercial 260k through one-off donations or Building the capacity of 80 long-term partnerships Measurement begins by assessing what’s contributed to the community. Collectively, the initiatives in the community community organizations LBG network contributed more than $3.6 billion (£2.2 billion, €2.7 billion) to community projects around the world in 2014/15. This substantial sum equates, on average, to more than $21 million for each reporting company. of supported organizations $3.6B raised their profile, TOTAL 2014/15 However, LBG isn’t just for companies with big budgets. With total contributions across Mobilizing the workforce 28% improved their services, CONTRIBUTION companies ranging from $90,000 to over $350 million, any company with any size community 30% 23% reached more people budget can use the LBG framework to assess the contribution it makes. employees have been actively Using key comparators to ‘normalize’ data, such as contribution as a percent of pre-tax engaged in community activity profit (1.1%), or contribution per employee ($639, £387, €479), means that, whatever their size, 600k during paid-working time companies can make sensible comparisons. € Companies in the LBG network, listed by sector on the back of this document, have the added advantage of being able to drill down to sector and company-specific data to make $ The company is a catalyst more direct comparisons. $ $ additional funding is raised by companies from sources Average percent Contributions Companies’ total 15% like governments, customers of pre-tax profit equate to an $90k to contributions and employees £ contributed 1.1% $639 average of $350m range from less by companies $639/£387/€479 than $100,000 Tackling crucial issues Making companies great places to work to community per employee to hundreds activity of millions of contributions support of employees improved education (35%) or health (22%). their job-related skills 57% Social welfare, arts and economic 48% through involvement in development are also widely £$€ the community supported Note: Not every company in the LBG network reports data against every indicator. Therefore the results presented here are based on those companies that report against a particular indicator. Financial
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