Companies in Communities - Complete Volume PDF

LONDON BENCHMARKING GROUP
Companies in communities:
Valuing the contribution and assessing the impact
The complete volume
Companies in communities: valuing the contribution and assessing the impact
How to use this guide

This guide1 is about the London Benchmarking Group model, offering both an introduction to those new to it and, for those already familiar, a reference manual with detailed advice on applying it. The model is used to assess the full value and impact of corporate community involvement programmes, enabling thorough assessment of programme effectiveness, benchmarking data for comparison with other companies and a solid foundation for planning programme innovations. The guide seeks to offer guidance through practical example and case studies. A reference section is included, with detailed case studies provided by participating companies, checklists and a complete LBG matrix proforma.
The guide is an amalgamation of two earlier volumes, Companies in Communities: valuing the contribution (1999) and Companies in communities: assessing the impact (2000), both published by Charities Aid Foundation.
1999, 2000 The Corporate Citizenship Company. Published by Charities Aid Foundation
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Table of Contents
How to use this guide Section 1 Introduction Section 2 Summary of the LBG model Section 3 The model in detail applying the input model Section 4 The model in detail applying the output model Section 5 Assessing leverage Section 6 Measuring community benefit Section 7 Measuring business benefit Section 8 Impact assessment Section 9 Reporting the community contribution Section 10 The management challenge Section 11 Measures and indicators Section 12 Links with other measurement models Section 13 The full proforma Section 14 Definitions Section 15 Hot tips for using the LBG model Section 16 Case studies
This document is taken from the publications Companies and communities: valuing the contribution and Companies in communities: assessing the impact. The combined volume is available to download from: www.lbg-online.net/members/default.asp For further information on the content of this, or any other, section please contact: The Corporate Citizenship Company (Ground Floor South) Cottons Centre London Bridge City London SE1 2QG +44 (0)20 7940 5610 lbg@corporate-citizenship.co.uk
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Section 1. Introduction
Section 1 - Introduction
Background
Companies are increasingly asked to get involved in the community and the extent of their involvement is often judged by the amount they contribute. Yet few currently compute an estimate of how much this is, still less what it achieves for the community and the business. The London Benchmarking Group model addresses that issue. In some countries, such as the United Kingdom, companies must publish in their annual reports the total of their charitable donations in that country. But most companies get involved with a whole range of initiatives and organisations, not just charities, and in the increasingly global economy have operations far from their headquarters home. If they are to be judged - and in many industries social responsibility is an increasingly important component of corporate reputation - they need to assess their community involvement and give an appropriate account to those with an interest - their customers and employees, local communities, their investors, governments and regulators, business partners, and other external audiences. Currently, those that do try struggle in the absence of any agreed framework for reporting: What should they include? What value should they put on non-cash contributions? How can they assess achievements and so make a more effective contribution? The London Benchmarking Group In 1994, six companies came together in the London Benchmarking Group (LBG) to try to answer these questions. The companies in question (BP, Diageo, IBM, Marks & Spencer, NatWest Group and Whitbread) originally saw it is a self-help exercise, but realised that the model and the common definitions they had developed would be of assistance to other companies too. In 1996, they published a report on their findings, Companies in Communities: Getting the Measure, written by David Logan. This report set out the basic approach of the Group and generated much interest in the UK and internationally. As a result, in 1998, 12 other companies joined them and the Charities Aid Foundation (CAF) in a follow-up project, Getting the Measure, to develop the model and promote it as the standard for recording, measuring and reporting corporate community involvement both in the UK and abroad. The 12 companies (American Express, BT, Camelot, Centrica, Levi Strauss, Nationwide Building Society, News International, Railtrack, Rio Tinto, SmithKline Beecham, Unilever and United Utilities) brought a broader range of experience, roughly one per industry sector in the UK, and a strong international component. Through Getting the measure, the group refined the LBG model and agreed standard approaches and valuations for a range of community contributions. The results of its work were used as the basis of the original first volume of this report, Companies in communities: valuing the contribution, published in 1999, which was followed by a second volume Companies in communities: assessing the impact in 2000. Both were published by CAF.
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Since 2000 membership of the LBG has grown to nearly 100 companies and the model has entered its third generation. In so doing it has adapted to take account of developments in corporate community involvement (CCI) such as mandatory contributions, and new means of assessing the impact of programmes in society, such as social return on investment (SROI). The original LBG was supported in its work by the specialist consultancy The Corporate Citizenship Company whose original codirectors wrote the volumes on which this report is based. The TCCC now manages the LBG on behalf of its membership. About The Corporate Citizenship Company The Corporate Citizenship Company is Europes leading CSR consultancy, helping major international companies to improve the management of their social responsibility issues as good corporate citizens, whether at home or worldwide. Its directors are David Logan, Jerry Marston and Mike Tuffrey. Clients include many of the leading blue-chip companies in Europe, the USA and beyond. The companys non-executive chairman is Sir Ian Wrigglesworth, formerly an MP and president of the CBIs Northern Region. The large majority of the companys work is private consulting with international companies in the following key areas of corporate social responsibility activity: Reporting and assurance; Changing internal practice across the business; Assessing community impacts Managing supply chain risks; Managing consumer issues; Benchmarking and measuring. In addition to its consulting assignments, The Corporate Citizenship Company also manages several collaborative projects with companies, such as the London Benchmarking Group, and publishes the bi-monthly journal Corporate Citizenship Briefing.
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This book
This book includes an overview of the LBG model, detailed guidance on measuring inputs, outputs and programme impact. It also includes a detailed reference section, mainly provided by participating companies, comprising: case studies provided by the companies; summary lists of evaluation measures and indicators used; the complete LBG model input proforma; and an analysis of how the LBG approach helps with other assessment tools commonly used.
Why better recording and reporting matters

Companies which have already applied the LBG model say that the process is initially challenging but that the effort has proved worthwhile. Often begun in order to improve the data available for external reporting, many of the benefits turn out to be internal. Initially, however, a decision to apply the model can raise a number of fears, such as: at corporate centre, that collecting data and evaluating activity will be onerous, complicated and time consuming, and thus out of proportion to the likely benefits; within operating units, questions about why corporate centre has initiated the exercise - perhaps to interfere, stop activity or cut budgets. Some charities too have expressed that companies will apply the LBG model to increase the benefit to the business at the expense of community benefit or to switch resources from charitable cash donations to other resources linked to commercial goals. The LBG model itself is neutral about how information is used, but clearly companies which do get better knowledge about the scale and achievements of their community activities may indeed decide to make changes. Correctly used, this will lead to programmes which are more sustainable in the long term. Management through ignorance invites a challenge. In fact, most companies have found that, once established, data collection systems are not onerous to operate and have beneficial spin-offs in terms of greater understanding internally about the range of possible activities and their benefits to the company.
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Indeed, when resources are limited, improved information allows better programme management, in three main areas: economy - better data on the full input cost of the community contribution allow a judgement about appropriate and economical levels of spend, when benchmarked with other companies and between operating units of the same company; efficiency - better data on the immediate output (such as the number of pupils helped through the education programmes or employees trained through community assignments) allow a judgement about how efficient the programme is given the level of input resources; effectiveness - better data on the longer term impact of the community programme allow a judgement about the overall worth and effectiveness of the programme as a whole, both for the company and the community. Ultimately better management of limited resources can only help the company and its community partners.
Looking forward
This book is not is the last word on impact assessment and evaluation. From the work of the LBG project, we are confident the model is sound and, above all, practical. From the experience of the companies, we are confident it is a highly effective business tool. But the companies themselves are the first to admit that there is much more to learn. As their practice develops, so the approach can be refined, particularly once more projects have been systematically evaluated over sufficient years for the long-term impacts to start to show through. The authors remain deeply grateful to the companies who shared their experiences both with us and with a wider audience through this book. In a few cases, commercial confidentiality prevents full disclosure of all the business benefits in the case studies presented here. The authors have not sought to dictate to the companies how to present their findings the case studies are intended as real-life examples of practical attempts at project evaluation, and are not held up as perfect models. What we do assert is that the work of this project has moved forward significantly the debate on evaluation. We believe the UKs leading corporate citizens are making a very valuable contribution to the much wider debate on social impact assessment. We look forward to working with more companies and their partners in the community, as all sectors get more involved in partnerships. We invite you to apply the lessons from this book and share with us your own experiences.
Tips for smaller companies

This guide is written mainly for larger companies, often with full time community affairs staff and designated budgets. However the principles are equally applicable to small and medium sized companies too. They can benefit just as much and sometimes more immediately from the whole range of local engagement activity - from partnerships to fight crime, through regeneration schemes, to improving skills and recruitment. It is just
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as important for SMEs to think about what resources they can devote to community, to go beyond charitable gifts with support for time and in-kind contributions to projects linked to commercial goals, and to assess the outcome for the business and the local community.
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Section 2. Summary of the LBG model
Section 2 - Summary of the LBG model

Introduction
One thing everyone understands about business is that it is performance driven. All the effort put into the business must produce results good enough to cover costs and generate a profit - or the firm will not survive. Business people monitor the costs of their inputs with care, and constantly seek to improve the mix of quantity and quality in their outputs. The drive for efficiency is relentless. So why have corporate contributions and wider community involvement all too often appeared exempt from this approach? Why do they follow a benevolent gift giving model? Such an outlook is not wrong per se; indeed it can be very laudable. There is a place in a companys community policy for the giving of gifts with no thought of a real return. However, as the scale of CCI has grown, companies increasingly have asked exactly what are we putting into the community and what are both community and business getting out. The model devised by the London Benchmarking Group answers those questions, based on three simple principles that underlie business management methodologies:

carefully cost the main inputs to the community; map and measure their consequent outputs; assess the impacts of the individual components, and where possible the whole community programme, over various timescales.
Before outlining the LBG model and discussing inputs, outputs and impacts in detail, it is important to define the relationship of CCI to the business and what we mean by community.
What is corporate community involvement?

A companys engagement in society is extensive and multi-faceted, but can be broadly categorised under three headings, of which only the last and by far the smallest is the distinct field of corporate community involvement:
the basic business policies and practices of the companys owned and operated businesses as they affect stakeholder groups such as employees, consumers and investors: the wealth created, the jobs provided, the taxes paid, the goods and services offered in the market are the main contribution a company makes to society; the economic and other influence the company has in the value chain through its business partners in its backward and forward linkages - such as suppliers, contractors and customers: this is a major area of economic, social and environmental impact and many issues of social responsibility arise;
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the wider contributions the company voluntarily makes to the community, usually in partnership with charities and community-based organisations: the contribution is small in terms of the others but has an important practical and symbolic value to society, showing that companies are good citizens who care about the social good, not just their own interests.
These components are displayed in Figure 1, along with examples of the types of reporting the company often undertakes for each stakeholder group. All the activities of business have the potential to produce public good. For example, companies train and educate workers and give the world access to new technologies. While the LBG model concentrates exclusively on the companys voluntary community contributions, an appreciation of the other components of corporate life is vital to understanding how CCI is developing and how companies manage their corporate responsibility in their day to day business operations. The three components are increasingly inter-linked. The lines that divide the main segments of Figure 1 are shown as dotted because each category is closely connected, and the distinction often very fine. Community involvement should emerge from the identity of the business and be inextricably linked to it. For example, sporting goods and clothing companies have recently begun to make charitable gifts in the developing country communities where their main suppliers are based. They are joining with their suppliers to help alleviate local poverty and poor social conditions. Other companies have involved their retail customers in delivering community programmes at home and abroad, while the involvement of consumers and company employees is now commonplace. Not only do companies have extensive networks of contacts around the globe that can be involved in the community programme, they also have considerable resources beyond cash. These are their new products, old equipment and, above all, the immense skills of their employees. These resources are an integral part of the business and accessing them for community activities in a sustained way often needs to be justified by strong arguments about the benefits to the business. Companies involved with the LBG model see the future sustained growth of community involvement coming from closer links with the business operations and the wider deployment of non-cash resources. But these product and people resources are usually controlled by line managers based far from the corporate centre. That is why accessing them requires business language using a business model, easily understood by business colleagues.
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Figure 1 The three main areas of focus in the corporate social responsibility debate
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What is meant by community?

Corporate community involvement (CCI) has traditionally been centred on the geographical communities important to the business, usually close to major centres of operation. Today it also embraces communities of interest, such as environmentalists and mental health reformers, and communities of identity, such as students, people with a disability, minority ethnic communities and women. The LBG model covers all such definitions of community. It encourages companies to count as part of their total CCI all contributions for purposes broadly accepted in society as charitable and for the general pubic good, whether or not made to registered or formally constituted charities. Around the world charitable purposes are characterised in terms of the public good. Interpretation varies but the term is usually defined by the relevant national authorities for tax, legal or other purposes. In determining what counts, reference can also be made to established custom and practice.
The London Benchmarking Group model

There are three fundamental elements in the London Benchmarking Group model. The first is a categorisation of the voluntary wider community involvement activities of business according to motivation. The second is the use of a simple input/output model for assessing the immediate effectiveness of particular projects and the community programme as a whole. The third is an approach to impact assessment over time. The categories The LBG model divides the voluntary community contributions into three broad categories, essentially differentiated by the companys motive for the contribution and the desired mix of business and community benefits: charitable gifts; community investment; commercial initiatives in the community.
Beyond voluntary contributions, a fourth category, mandatory contributions, includes community activities which a company undertakes in response to the requirements of law, regulation or contract. As these are not voluntary, the LBG requires the cost of these contributions to be reported separately from voluntary contributions. Business basics includes all core business activities involved in delivering products and services which are critical to the business, but not motivated by community benefit. The manner in which these activities are managed has a significant social and environmental impact and is often reported alongside CCI in many company reports, but is outside the measurement scope of the LBG model.
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These are summarised and defined in Figure 2, which has become the key brand image of the London Benchmarking Group model. Figure 2 The London Benchmarking Group model
The LBG model defines distinct categories for community contributions for three main reasons: the realisation that a companys motive for CCI profoundly affects its approach to measuring the community activities the greater the business benefit sought, the more attention is needed to evaluating the effectiveness of this deployment of scarce resources with real opportunity costs; the integrity of the whole field of corporate community relations, which depends on a climate of trust between the business and the community and which demands a clear and open account of the companys motives; the fact that charities and community organisations are seeking clearer guidance from companies about how to present their proposals to business, taking into account the returns the business is expecting from the partnership.
The general principle underlying these three categories is that a charitable gift is given with only a minimal concern for a return to the business - it is seen as the right thing to do. A community investment strategy is much more carefully structured and focused to secure some long-term returns to the business, while a commercial initiative in the community must give some direct competitive advantage to the company and its brands.
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The lower down the triangle one gets, the stronger the pressure becomes for an accounting of the business benefits. Indeed business benefit should be driving the commercial initiatives category but with a carefully balanced concern for community benefits too. This differentiation in approach in no way undermines the need for a clear element of public good in all three types of community intervention. Inclusion of the business basics category in the LBG model helps to clarify the distinction between commercial initiatives in the community and the everyday activities of the company. It also helps to identify activities which are important to the community but not covered by the model. Examples include direct support for workers affected by plant closures, extra services for consumers with special needs, the operation of visitor/tourist promotional centres and access to company-owned land. However note that some elements of all these activities, such as support for enterprise development programmes in closure communities or educational support for visiting school pupils, may properly be considered CCI. The input/output model The LBGs input/output model is very straightforward and is depicted in the matrix below. The value of all cash, time and in-kind contributions (input costs) is placed under its appropriate category in the left hand column. It is then linked to an analysis on the right hand side of what is achieved in terms of outputs, simply defined as: leverage; community benefit; and business benefit. The matrix includes very brief examples to explain the approach in principle.
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The LBG input/output matrix

Category and examples Inputs (monetary value) Leverage Outputs Community benefits Business benefits
Charitable gifts Example: donation to a local hospital 50,000 None New equipment purchased for the maternity unit and used by up to 200 sick new-born babies each year If publicised, the company may be seen to be a caring company, and employees, their families and friends may directly benefit too
Community investment Example: support for a youth training scheme near a major factory 800,000 3.6m matching grant from government funded training schemes 250 young people trained each year, of which 80% find a job at the end of the programme A local reputation as a good citizen and the opportunity to recruit good quality employees
Commercial initiatives in the community Example: causerelated marketing initiative, raising money for a reforestation project 400,000 company payment to a charity 1.5m raised in direct contributions from customers 50 people employed for a year and four million trees planted A 6% increase in sales during the period of the promotion
Longer-term impact Understanding the distinction between inputs, outputs and impacts is vital. At present, the evaluation of many CCI programmes concentrates only on achieving a fair estimation of the total input cost. Indeed company generosity is usually measured by what is given, not what is achieved. Most leading companies are now measuring the output that their input achieves, and many detailed case studies are present in this book. Many companies are also beginning to assess the long-term impact of community involvement a few examples are considered in Section 16 Case studies but practical experience still needs to develop further. The element of time is critical in measuring outputs and impacts. Inputs are usually accounted for in the single year during which they are made. Outputs may be measured over roughly the same period or a slightly longer time frame, if only because of the time it takes to complete some projects. But many impacts will take several years to emerge fully and then only after investing resources to research and evaluate them.
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This is depicted in Figure 3, while the box example below shows how the whole approach works when applied in full to a single project. What is noticeable is the impact a small intervention can have over time. Figure 3 Time frame for evaluation of inputs, outputs and impacts
Inputs cash time in-kind
1 year
Re so ur ce
1-2 yea rs
Impacts changes in attitude, behaviour or status
A simple demonstration of the full model in action

Step 1 - Cost the input In a developing country, the company makes a grant of 5,000 to drill a water well for the community neighbouring a major plant. So 5,000 is the input cost. Step 2 - Measure the output Leverage As part of an incentivisation scheme, the company wins a 100% matching grant from a fund set up by the national government to promote clean water projects. This additional 5,000 is counted as leverage and the total project cost of 10,000 is achieved, with the company only funding half. Community benefit Now 2,500 families, accounting for a total of 10,000 children and adults, are enjoying safe and reliable access to clean water for the first time. Business benefit Absenteeism goes down from 7% to 5% as workers living locally avoid illness from water-borne diseases. The companys reputation as a concerned corporate citizen is
timescale
Measurement
Outputs the number of beneficiaries helped
1-10 years
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enhanced. Both these benefits to the company are measurable, if monitoring systems are put in place in advance. Step 3 - Analyse the impact To measure fully the impact of this initiative, a range of indicators needs to be used over a longer period of time. A baseline study, done at the time the grant is made, can provide the basis for reviewing impact over time. Indicators to be tracked can include: for the community a drop in infant mortality due to fewer water-borne diseases; reduced attendance at the doctor and/or savings on expensive medicines, increasing families disposable income; improved school attendance. for the business increase in employee morale; increased productivity in the company and related supplier businesses in the area, leading to higher profitability. Defining inputs The LBG model identifies four possible types of input cost to the company in making its contribution to the community. They are: cash payments, using contributions to not-for-profit agencies but sometimes expenditure directly incurred by the company; time of employees paid by the company but spent on community activities; in-kind contributions, such as products, equipment, use of facilities and other company resources ; management costs relating to charitable gifts and community investment programmes.
The measurement of cash contributions is usually straightforward, in that it is the gross monetary amount. The main difficulty is normally not the valuation, but that companies rarely capture all of the cash giving made by the various parts of the business. The recording of in-kind and time contributions has been hampered because of the absence of standard valuation rules. The LBG model has created a standard approach based on clear definitions and principles to put a cash value on both time and in-kind contributions. Previously the absence of such a formula created a wide range of conflicting approaches in both these categories. For example, some companies valued their in-kind giving at cost to manufacture, while others reported the retail value as if sold on the open market. The LBG model values time and in-kind contributions on the simple principle of cost to the company. By applying this consistently, these inputs can be calculated on the same basis as cash contributions. The cost of time is normally the actual salary of the individual employee plus pensions and any additional taxes, social security payments and fringe benefits. Simple scale rates or average figures for employment costs can be used where more
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practical, as the numbers of employees taking some paid time is likely to be large and calculating hours and wages individually impossible. The cost of in-kind contributions is normally the amount held in the companys books of account, whether for product donated from inventory or depreciated equipment declared redundant. However, where these have been written down to zero for accounting convenience but nonetheless have a significant value in terms of the community programme, a fair second-hand value can be substituted. Management costs The LBG model also allows companies to count as part of the total input cost of the community contribution the expenses incurred in running the programme. Many companies now have extensive full and part time community affairs staff to organise and deliver CCI programmes, without which the contribution could not be made or not made as effectively. Just as charities need professional staff to deliver their programmes and then give an account of such overhead costs to show how they operate, so community affairs departments are a real and legitimate cost which the model now makes explicit. The full LBG proforma for collecting a companys inputs costs in terms of cash, time and in-kind across the three categories of community involvement and management costs is set out in Section 13 The full proforma. Inputs and outputs distinguishing between cost and value One of the elements of clarity the LBG model brings to the debate about valuing CCI is to draw a clear distinction between input costs and outputs. Many companies still do not; they confuse their capacity for fundraising with their own direct contribution to a charity. For example, where a high street bank arranges to collect funds from customers for a disaster appeal (facilitated giving in the LBG proforma), the funds raised are the contribution of the customers, not the company. The banks contribution is the cost of organising the appeal; this can be counted towards its total if the company so wishes. Similarly, if an IT company donates a large number of computers from inventory to schools, it forgoes the opportunity to make a profit on selling the equipment. Some companies include this opportunity cost as part of their contribution and report the full retail value of the computers. Under the LBG model, this is not the correct treatment, as there is no certainty the equipment would have been sold. The real cost is the average cost of producing the computers, following normal cost accounting principles, and this should be recorded as the companys contribution. Under the community benefit column on the outputs side of the matrix, the company and the school can report the full retail value of the gift as a notional saving made by the schools. In this way, the public gets an accurate assessment of the cost of the contribution to the company and a sense of its worth to the community. This input/output approach to community involvement allows companies to be known in the community for what they accomplish (an output measure), not just what they give (an input measure). If companies are to direct more resources
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towards the community, they need to know the exact costs of the contribution and that the effort has a positive return, with a real impact on society while yielding appropriate business benefits. Outputs and impacts means and ends The original work of the LBG concentrated on defining this difference between inputs and outputs. In the second phase of the work, the importance of the distinction between outputs and impacts became clear. Some measures focus on the level of activity, while others assess the impact this activity has on peoples lives. The preceding case study makes the point that the purpose of providing clean water to a community is to increase its health and well-being. So we can say that the outputs are the leverage achieved, the activity involved providing the wells and the immediately obvious community and business benefits. The impact of the change is deeper and more profound, for both the community and the company. However the LBG is still working on the practical implications of this distinction and precise definitions still need to evolve. Even at this stage, we can say in general terms that the distinction centres on the difference between means and ends: output measures indicate what level of activity the input factors are generating, which the LBG model categorises between leverage, community benefits and business benefits; while impact measures assess the effect on the ultimate goals of the activity, often only measurable in the longer term; under the LBG model, the twin benefits to business and community should show through to impacts.
However, this remains a grey area. In part this is because people frequently use words like impact, outcomes and outputs interchangeably when the ultimate objectives of a project are not clear or because the aim is simply to fund a process for a limited period of time, expressly not seeking long-term impact. In the former case, you can only hope to measure impact once you have defined what it is; in the latter, you have accomplished your desired impact merely by achieving the stated outputs. The reality is that companies have rarely been involved in measuring impacts for either the community or the business. They have been happy, for example, to donate computers to schools but have not sought to measure if they improve the learning or test results of the pupils; this issue has been left to the schools to determine. The fact that these computers may be chronically under-used due to a lack of teacher training or technical support is not picked up in a simple output analysis. The companies have done their bit; they can feel happy with their effort because it is the schools who are responsible for the learning impact. It has to be said that for many projects, recording simple outputs like the funds raised by leverage, the numbers of people in the community who benefit from the activity and the press coverage received are sufficient descriptions of success. However, if the aim of a project is more specific - such as to increase the number of children staying on at school beyond the minimum leaving age - then any activities undertaken must be judged by their contribution to the ultimate goal.
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In Section 16 Case studies, we examine two major flagship projects - NatWests Face2Face with Finance and IBMs Reinventing Education. In both projects, the ultimate goals are not measured by the volume of materials produced or by counting the number of pupils and teachers engaged in classroom activities; these are the outputs. These activities are only a step on the road to achieving the goals of change in learning outcomes the impact. In both cases, quality management techniques lead the companies to evaluate success at regular stages and to alter the mix of inputs and the approach adopted, so as to enhance the outputs and impact ultimately achieved.
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Section 3. The model in detail applying the input model
Section 3 - The model in detail applying the input model

This section is designed to help those who have responsibility for monitoring, measuring and reporting corporate community involvement. It provides a basic stepby-step approach to the task. Further details on specific issues and guidance on difficult cases are set out in Sections 14 and 16, Definitions and Case studies. The detailed template is based on the wide-ranging experience of the 18 companies that made up the London Benchmarking Group follow-up project Getting the Measure, drawn from most types of business in the standard industrial classification. The detailed template provides a full framework for their very diverse experience and so individual companies may find some elements are not relevant. However the general principles of valuing and measuring input items, discussed here, are common to all companies.
Section 3 overview:
Step One establish baselines Step Two collecting the input data Step Three ensure the quality of the data Step Four categorise the data Charitable gifts Community investment Commercial initiatives in the community Additional categories of classification Deciding on classification: Religion Direct services to the community Public services Sponsorships Cause-related marketing International aspects Presenting the data Effects of using the inputs model Current reporting Improved monitoring of inputs Inclusion of management costs Community element of commercial initiatives Measuring international community involvement Implications Benchmarking
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Step One - establish baselines

The first set of decisions to make in applying the LBG model is to establish the baselines for reporting. The three elements to address are as follows. The period to be covered is almost always the companys financial year. It is by far the easiest base for reporting. The reporting unit could be (and often is) just activity undertaken through corporate community budgets at headquarters. However, a full report should cover the whole company, even though it may take time to establish the systems to collect the data from the wide range of separate parts of the group, including: operating divisions; subsidiaries and foreign affiliates; franchisees and joint ventures (but see below); functional units such as human resources, marketing and research; local units, such as branches and factories. For joint ventures and minority holdings, apportion the community contribution to include the appropriate share only. For franchisees, dont take credit for activity which the franchise holder voluntary chooses to do, funded from his or her profits. Where activity is required under the franchise agreement, then the costs could be attributable to the franchiser. Business data are used to contextualise the community effort. The traditional measure of corporate community involvement is the total of community spending as a percentage of pre-tax profits. This remains the measure most used by companies and by public commentators. However, it suffers from fluctuations within the business cycle and when a company is under intense competitive pressure. So when comparing companies in the same industry sector or individual operating units within one company, additional measures can be used, such as community spend per employee, as a percentage of turnover, or (where relevant) as a percentage of dividend. Business data collected at the outset should mirror the same geographic units and time periods as the community involvement data, thus avoiding comparison (for example) between UK involvement with worldwide group business data. When benchmarking against other companies, some different financial year-ends are inevitable, but a best fit within a maximum nine month variation is normally quite reliable.
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Step Two - collecting the input data

To give a full account of a companys involvement across the complete range of company activities - particularly when it is large or international - can be a real practical challenge. The difficulties include: a lack of clear understanding within the business of common definitions of community involvement, so data from different sources are often not comparable for example, sports sponsorship may be counted by some and not others; different parts of the business have their own reasons for being involved in the community, and may be suspicious of perceived corporate intrusion into what they are doing - why are they doing this? will they try to curtail established activities? much community activity is seen as doing good and so evidently right that virtually no one keeps good records nor values their time and in-kind contributions. There is no instant solution to these problems. It takes time to build a better internal culture of monitoring and measuring community inputs, and even longer to tackle outputs. Figure 1 below shows how one company improved its data collection. A fully effective data collection system needs to cover all the following elements: special community budgets held at: corporate headquarters subsidiaries and foreign affiliates divisional or business unit headquarters individual facilities where these budgets are not consolidated above; activities by functional managers, as departments on the following list often have line managers using their budgets, people and equipment to support work in the community: sales and marketing, such as cause-related marketing campaigns human resources, running community-based training or secondments for managers research, often through support for universities research departments;
An appropriate proportion of contributions made by associated companies, joint ventures and franchisees needs also to be ascribed to the corporate account, mirroring the accounting treatment of their business data.
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Figure 1
How one company successfully improved data collection One company adopted the LBG model and, with a small amount of help from project consultants, was rapidly able to organise its data from central corporate sources. The problem was to discover what cash, in-kind and time was being contributed by the rest of the business. The company only trades in the UK and comprises five distinct operating units and several group wide functions, including human resources and marketing. The solution adopted was as follows. 1. Ask appropriate individuals in each part of the business and the different functions to provide a rough list of what they thought their community contributions were. This proved to be very wide in several cases, including local purchasing, and very narrow in others, just a few charitable gifts. 2. These representatives were called to a lunch and an afternoon meeting where the principles of the LBG model were set out and discussed with the group and questions answered. 3. In the second part of the meeting, the different contributions of each part of the business were reviewed in turn by the whole group, so reinforcing learning about the LBG models use while fitting their contributions into it. The participants worked through what of their own material was included in the model and how it was categorised. 4. The summary template was then issued to each participant who was asked to fill it in for cash contributions, but only to provide actual figures for the number of days spent on community projects or old equipment donated. 5. The community affairs manager took responsibility for valuing these contributions and consolidating the emerging data. This meeting only began the task of establishing a common understanding within the business about the model and its application. It engaged line managers in its application and eased some concerns about why the company was developing this approach. Each company must find its own way to promote good practice. For example, one international company put time on the agenda of the annual worldwide meeting of the country-based public affairs managers, who mostly control community budgets around the world. They were given an explanation of the model and asked to use it to report in future.
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Hot tips for improving data collection

1. Keep it simple! Never send complicated input/output matrices to colleagues - at most use the short template with colleagues unfamiliar with the model or devise your own questionnaire based on the proforma in Example 1 below. 2. Do not use terms like community investment and commercial initiatives unless they have been explained. 3. Similarly, do not reply on simple charitable giving to describe community involvement - it is too narrow to encompass the full range of activities likely to be going on. 4. Do not ask colleagues to value their time and in-kind contributions, but simply to provide a fairly accurately record of the base numbers (hours volunteered, computers donated), then do the valuation yourself. That will ensure consistency and take a burden from colleagues, particularly where volunteering and the donation of scrap equipment is concerned.
Step Three - ensure the quality of the data

In the early stages of applying the LBG model, it can be difficult to ensure the quality of input data, particularly in respect of in-kind giving and the community component of commercial initiatives in the community. Initially, the judgement about what can and cannot be counted and how to value it needs to be made at the centre, to ensure consistency in recording and reporting. Putting a correct value on in-kind contributions is probably the hardest part of applying the LBG model, with much confusion between retail, wholesale, cost and scrap values. The golden rule is if in doubt, leave it out! It is not the purpose of the LBG model to boost the levels of corporate community spending but to provide a management tool to obtain an increasingly accurate account of corporate community inputs. When these data are reported externally, the company needs to be very sure that what is included will stand up to scrutiny - would a fair-minded person think it reasonable to count something as a genuine community contribution?
Step Four - categorise the data

The LBG model requires data to be categorised according to five categories, of which only the top three count as voluntary community contributions. To recap, they are: charitable gifts; community investment; commercial initiatives in the community; mandatory contributions; business basics. The detailed definitions of these categories were set out in Section 2 - Summary of the LBG model. However, the lines between the categories are dotted, not solid. This is deliberate because the categories are not absolutely watertight. Often a judgement call will decide what goes where, and that is for each individual company to make in light of definitions and other guidance provided by the LBG model. Many decisions are self-evident, but some are not and the sequence of questions set out below will help to decide.
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Charitable gifts In deciding if the activity should be in the charitable gifts category, it may help to ask the following questions: is the contribution in response to an appeal or initiated by a charity or employee on behalf of a charity? is it worthwhile but does not fit with the community investment strategy? is it unlikely to be repeated on a regular basis? is reliance placed solely on the charitys good faith that the money is well spent, rather than through defined alternative systems to measure outcomes?
If the answers to most of these questions is YES, then the contribution is probably a simple gift - however large or small - and belongs in the charitable gifts category. Community investment In deciding if the activity should be in the community investment category, it may help to ask the following questions: is the contribution one of the three or four target areas for community action chosen because of their importance to the business, thus part of the strategy? is it part of a longer term partnership with one or more community-based organisations? is it linked into some sort of systematic reporting of outputs? is it a major commitment of resources?
If the answer to most of these questions is YES, then it is probably part of the community investment portfolio, even if the sums involved are initially small (although on the whole they tend to be very much larger than charitable gifts). Commercial initiatives in the community In deciding if the activity should be in the commercial initiatives category, it may help to ask the following questions: is the contribution from a line management budget, such as marketing or human resources, and subject to VAT, rather than from the community budget? is it targeted at an issue of immediate commercial importance to the interests or image of the business or industry? does it seek a competitive or other form of advantage for the company?
If the answer to most of these questions is YES, then it is probably a commercial initiative in the community. But the distinction between this category and the business basics category can be a fine one. To count here, the activity must be voluntary, not mandated by law or other regulation. It must have clear charitable purpose, with a net transfer of resources from the company to the ultimate beneficiaries. In order to help illustrate the approach further, Figure 2 provides practical examples in the field of higher education, where many companies are actively engaged making multiple gifts.
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Additional categories of classification The LBG model requires recording of data on the basis of the three categories charitable gifts, community investment and commercial initiatives in the community, plus management costs. For internal management and external reporting, most companies will also need to codify activities under other categories, at the time of setting up data collection systems. These will include: by subject area, such as education, environment, health and generic headings like community support; by geography, such as by major region within countries or perhaps political constituencies, and globally by continent or country groupings.
Figure 2 Examples of categorisation in higher education

Cash Charitable gifts Community investment Commercial initiatives in the community Time Charitable gifts Community investment Commercial initiatives in the community In-Kind Charitable gifts Community investment Commercial initiatives in the community Examples of activity The matching of gifts by employees to an appeal for support from their old university A grant to help undergraduate students become better trained in the skills which business and industry need A grant to an institution or student to conduct research on an issue of importance to the companys products but where the results and associated learning are shared (commercial exploitation of intellectual property rights are likely to be retained by the company Examples of activity Employees volunteering ad hoc in paid time to help with teaching The seconding of a manager to help a college re-organise its research programme The seconding of an IT product development specialist to a computer centre for artificial intelligence as part of a new product development strategy by an IT company Examples of activity The gift of used desks and tables to a students hall of residence The gift of computers and networking equipment as part of a strategy to help improve library provision An exclusive sponsorship of the computer needs of a leading researcher as part of a marketing campaign
Deciding on classification There are no absolute rules about placing activities into the various LBG categories. An activity or project may begin as a simple charitable gift but become part of a community investment strategy over time, and vice-versa. Similarly, an individual project may be classified as environmental not educational, for example, even though it takes place in a school, because the primary purpose is to spread knowledge about energy efficiency. Among the practical questions which often arise, several are worth examining in more detail. Religion While gifts to religious institutions are treated as charitable in most cultures, few public companies in western society would support the advancement or promotion of religion as such. However many religious organisations provide care services to the wider
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community, often on an open inter-denominational basis, and support for these will normally be acceptable as a legitimate community contribution. Projects which only benefit one faith should be treated with caution - the test is what is the norm in society, and so in countries where one faith absolutely pre-dominates, international companies will need to give special consideration when reporting community contributions. Direct services to the community The LBG model normally relies on the non-profit community partners to be the guardian of the public interest in the process of corporate community involvement. This ensures that a third party can verify the integrity of the companys relationship with the community and the public benefit which accrues from it. However, in developing countries in particular but also in some industrialised countries, companies might not be able to find an appropriate community partner to work with. Consequently, they sometimes provide direct services, for example undertaking disaster relief or running schools and health centres themselves, with no recognised community partner being involved. These contributions may well be charitable in nature, but particular care is needed before including them. Under the LBG model, the test is the charitable purpose: for a company running a big plantation in the developing world, is a community health centre a voluntary and additional contribution different from an essential business expense (ie an on-site centre) to ensure a healthy workforce? Does government routinely require or expect major investors to provide such services? If in doubt, err on the side of caution, excluding them from the community contribution total but referring to them in a wider social report. A parallel issue arises when, as part of the town planning and building control process, a company agrees to provide a community facility as part of gaining permission for a new development. Known as planning gain (or in the UK as Section 106 agreements), this can be directly related to the site, such as road improvements, or be quite distant, such as funds for a new leisure centre. This is not normally allowable under the LBG model because it is not a voluntary and extra contribution, but becomes a legally binding requirement. At least in theory, planning gain is meant to mitigate adverse effects of the new development. Public services National and local government provide many services to the community that are extremely necessary and in the public interest, for example police, fire and ambulance. However, only some public services like education, health and welfare also have clear charitable status. The costs of working with government agencies on such projects should be counted in the LBG model; general contributions to universities, hospitals and schools are obvious examples. Where time off is required by law for jury service, military reservists, magistrates and local councillors, it cannot be counted, as it is not a voluntary additional contribution. Costs of participation in government funded welfare to work schemes should not normally be included, as they are part of basic training and employment in the business operation - although executive time spent on a business taskforce advising the government on policies to combat youth unemployment probably would.
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Sponsorships Companies frequently engage in sponsorships of the arts and sporting activities, and a question arises of what is eligible for inclusion in the community contribution. The test is whether there is charitable community benefit. So mainstream sports sponsorship is generally not allowable, although outreach to disadvantaged young people through sporting activities might be, if the motive is educational, not product or corporate promotion. For arts sponsorships, the usual approach is to separate out the various elements corporate hospitality and entertaining are not allowable; widening access to young people, for example, normally is; general contributions to an arts company or to sponsor specific productions might well be, but the precise circumstances should be examined. If in doubt, do not over count. Usually such sponsorships will be classified as commercial initiatives in the community. Cause-related marketing Also in the commercial initiatives in the community category are marketing schemes which use a connection with a community cause to promote product sales. A classic example is the promise of a donation to a charity for each item sold. The LBG model says that this contribution is allowable towards the company total, as the community genuinely benefits - the company is donating part of its profit, with a view to boosting sales or increasing brand equity. Clearly, the marketing and promotional expenditure itself is not allowable. Where customers are invited to make an additional donation themselves, sums raised are recorded as leverage in the outputs section. Another hard case is where a business function is outsourced not to a commercial subcontractor but to a non-profit partner. If this remains purely a business relationship, such an arrangement may simply be regarded as business basics. But occasionally, some at least of the expenditure could be counted as a community contribution. One example is where a detailed social and environmental impact assessment has been conducted prior to starting a new operation, such as oil production in a new field. Normally this is business expenditure with the results private to the company. However, where conducted by a major academic institution with the results freely available in the public domain, available to aid scientific research or support social action by government and non-profit agencies, for example, some of the expenditure could count, notwithstanding the commercial motivation. Such hard cases always require judgement, based on how the resulting data will be presented and used. Ultimately, however, companies are responsible for applying the principles set out here in their own decisions to classify, monitor and measure their own activities. Consultancies such as The Corporate Citizenship Company and agencies such as CAF are available to give advice as required.
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International aspects Although originally devised by a group of London-based companies, the model has generated much interest worldwide, with presentations given or translations made in all five continents. While some of the terminology varies due to language and cultural differences, the fundamental principles have been found to apply globally. In North America, for example, the focus has traditionally been on corporate philanthropy (charitable gifts), although attention is moving towards strategic philanthropy (community investment). In continental Europe, community investment has until now been left largely to the public sector, with corporate engagement mainly with charities (small) and commercial initiatives (growing). In the developing world, companies are engaged at all levels. International companies which have used the model find internal benefits as well as assistance in external reporting. Despite cultural differences, the concepts of cash, time and in-kind contributions, as well as the input/output analysis, apply universally. Indeed the model offers a common language for companies to use to achieve consistency internally. Local country managers tend to like it because they do not generally have budgets for charitable donations, but their commercial activity and time and in-kind gifts can be recognised as making a valid contribution.
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Presenting the data

Current practice in the reporting of community involvement to external audiences is very diverse. With a few leading exceptions little goes beyond simple presentation of activities undertaken, through photographs and commentary. This is perhaps inevitable in the absence of a common framework for defining and presenting involvement on a consistent basis. Communication is hindered because, for most audiences, the notion of profit-making companies getting involved in charitable support is counter-intuitive - they cant understand why. The critical advantage of the LBG model in reporting is that it explains the motivation of the company, showing how much is driven by immediate commercial considerations, how much is for a long term winwin and how much (usually quite small) is philanthropic. Effective communication of community involvement should therefore cover four elements, as follows: why do we contribute? charity community investment commercial initiatives in the community how do we contribute? cash in-kind time (management costs - see below) what do we contribute? education environment arts and culture community development and many more where do we contribute (best contextualised with information about the distribution of the business, using data such as profits generated, distribution of employees and sales revenue)? England, Scotland, Wales, etc Europe, North America, Asia/Pacific, etc
Best practice is to report on the company as a whole, across all its geographically disparate operations, as it is the corporate entity which is being judged. Looking only at the headquarters country, for example, can give a misleading picture of both the scale of community engagement and the type of activity undertaken. Companies have an option in deciding how to report the management costs element of the total contribution. The preference is to declare it separately as part of how the contribution is made and then to gross up the figures in the other headings. This
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makes for greater transparency and helps other companies benchmark their own practice. Alternatively it can be left as a separate item in each classification or hidden entirely from view. The data on the allocation of spend between the main LBG categories by motivation (charitable gifts, community investment, commercial initiatives in the community) can also be displayed pictorially. Based on the models pyramid depiction, this is particularly useful when comparing one companys programme with another or the balance within the existing programme with a possible future model.
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The effects of using the inputs model

Companies which have applied the LBG model find that the total of their recorded community contribution tends to increase, in some cases quite significantly. This section looks in detail at the reasons behind this effect, showing the improvements which the LBG model offers over existing practices in recording and reporting. Few in companies and community groups or among commentators are happy with the current state of information about corporate contributions; better data will allow more effective management, to the long term benefit of company and community. Indeed it is unlikely that corporate community involvement will be sustainable, let alone grow in real terms, without a clearer picture of the costs and what the programmes achieve. When companies do report a bigger number through better recording, it is vitally important they make that clear, otherwise people will think the extent of activity has grown. Likewise, when they include the community element of commercial initiatives (often excluded before, as we see below), clear explanations are essential, lest sceptics doubt the reality of the community benefit. Current reporting In the UK, the Charities Aid Foundation (CAF) and the Directory of Social Change (DSC) currently conduct a joint survey of companies, based on data published in the statutory annual report and accounts. Except where companies make an effort to provide extra information, this is inevitably biased towards UK charitable donations which is all that companies are required to report (Companies Act 1985, s234). Similarly in the USA, surveys by the Conference Board and other agencies tend towards a narrow picture of philanthropy based on charitable donations declared under tax or foundation law. As an illustration, Figure 4 below compares the data published on six companies by existing CAF/DSC surveys with the information the companies were able to report when they applied the LBG model. The results show a striking variation. Some, such as BT, experienced a big increase, largely from more comprehensive data collection (see Figure 7 at the end of this section for more details on this); others, such as Marks & Spencer, showed no change, although here the company did not record and report some activities, such as time dated food.
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Figure 3 Reported company contributions compared (1996 and 1997 year ends)
Company Company figures reported in the Total community Dimensions of the Voluntary Sector 1 contribution under LBG UK charitable Total support model (m) donations only including other (m) categories (m) 3.4 0.9 2.7 5.5 0.7 0.7 13.9 5 7.4 15.6 9.8 Not available Not available 39.2 16.7 21.6 27.6 9.8 2 1.4 3.2 80.3 Geographical area covered in reporting
GrandMet 3 SmithKline Beecham BT Marks & Spencer IBM UK Whitbread Totals
Worldwide Worldwide UK UK UK UK ---
Note 1. Source : Pharoah et al (1997, 1998) and London Benchmarking Group, published in Dimension of the Voluntary Sector 1998 Note 2. Marks & Spencer reported no commercial initiatives in this year Note 3. Now Diageo, following the merger with Guinness
Four factors, examined in more detail below, account for the fact that the LBG model produces a higher level of reported spending, even when there has clearly been no increase in community activity: collecting more detailed information on the value of what is currently being done; including management costs in the total reported; providing information on the community elements of commercial initiatives; measuring international community involvement. Improved monitoring of inputs The way in which a company monitors and values its existing activity will vary widely from company to company. Within the London Benchmarking Group, applying the model had little impact on the reporting of NatWest because the Bank already has detailed systems for monitoring all expenditures down to branch level. The picture was very different for decentralised companies with extensive international operations like BP. Among the wider group of companies now developing the LBG model, BT experienced the biggest impact. Its recorded contribution almost doubled in value after an effort was made to collect data from across the business, not just at corporate centre. (See Figure 7 at the end of this section.) Generally, companies find unrecorded contributions in cash, time and in-kind.
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On cash contributions, much community activity is undertaken by small units (such as branches and stores) or in separately managed large divisions, but this is not reported to the community affairs staff at corporate headquarters. To address this, companies need to undertake simple audits of spending by operating units and, based on the findings, set up the systems to collect data about these activities on a regular basis. The LBG model has not changed the way companies value and measure the time that their employees give to the community. However it does encourage them to be systematic in recording the extent of activity. Even where the cost of supporting volunteer programmes is very small, it is worth compiling the data as the outputs, in terms of community benefit, can be very high. The LBG model stresses cost to the company as the basic valuation method for gifts in kind. Here there are tremendous differences between the approach adopted by companies to such gifts and the extent to which they are recorded. Often the actual cost to the company is little but they may have an enormous value for the people who benefit. Among the London Benchmarking Group companies, Marks & Spencer and Whitbread identified major programmes which are not fully costed. The inclusion of management costs The second main contributory factor in increasing reported totals is the inclusion of management costs. Effective programmes depend crucially on having full and parttime community staff. Like charities, community affairs managers spend considerable time and effort within the company mobilising resources and staff for community projects. This cost was calculated for several of the companies in the Getting the Measure follow-up project. The results showed considerable diversity and are set out in figure 5. Figure 5 Management costs as a proportion of community spending (1996 / 1997 years)
Company GrandMet 2, 3 SmithKline Beecham 2 BT Marks & Spencer Rio Tinto 2 Centrica IBM UK Whitbread Community spending 1 m 12.9 16.6 25.2 9.8 13.7 1.9 1.4 2.7 Management costs % 4.5 4.8 6.2 7.0 7.3 10.3 15.3 22.2
Note 1. Charitable gifts, community investment and management costs Note 2. Worldwide figures Note 3. Now Diageo, following the merger with Guinness
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There is no right or wrong level of management costs, as it depends on the nature of the community programme. Where non-cash contributions are high, costs will be greater, as is the case with IBMs technically complex projects and Whitbreads distinctive local approach. Programmes with strong overseas elements, like those of Diageo and SmithKline Beecham, show lower costs because they rarely have full time community affairs managers, relying on local managers in the business. The community element of commercial initiatives The third issue causing an apparently increased contribution is the inclusion of the community element of commercial initiatives. Cause-related marketing campaigns are commercial initiatives with a high profile and can dominate the publics perception of what companies do in the community. They need to be included in the companys overall programme of community activity, so they can be properly evaluated. To this end, the LBG model requires companies to report the cost of the community benefit element of commercial initiatives in the community. The effect of this again varies greatly: companies in the Getting the Measure follow-up project which at that time had no commercial initiatives (for example Rio Tinto, North West Water and Centrica) reported nothing in this category; but for other companies, as Figure 6 shows, the results can be significant.
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Figure 6 Commercial initiatives in the community (1996 and 1997 year ends)
Company Community spending (other than commercial initiatives) 1 m IBM Whitbread BT GrandMet 3, 4 1.4 2.7 25.2 12.9 %2 0.6 0.9 0.8 1.3 1.0 0.1 0.6 2.4 3.7 5.0 Additional community Total community benefit element of contribution commercial initiatives (m) m 1.5 3.3 27.6 16.6 21.6 %2 0.6 1.1 0.9 1.7 1.3
SmithKline Beecham 3 16.6 Note 1. Note 2. Note 3. Note 4.
Charitable gifts, community investment and management costs Community spending / contribution as proportion of pre-tax profits. Worldwide figures Now Diageo, following the merger with Guinness
Measuring international community involvement The final element likely to increase reported contributions is the inclusion of international data. The statutory requirement for UK companies to report UK charitable giving distorts the true picture when this is misleadingly compared to worldwide business data. Equally so, restricting analysis just to UK figures can produce some odd results; for example GrandMets UK community spending was equivalent to 5.7 per cent of UK profits, whereas its global community spending was equivalent to 1.3 per cent of its global profits - a better indicator of the whole picture. For some companies in the Getting the Measure group (such as Diageo, SmithKline Beecham, BP and Rio Tinto), between 80 and 92 per cent of their revenues come from overseas. It therefore makes less sense to report only UK community spending, and these companies will, in future, produce a global account of their community activity. This is likely to lead to a significant rise in their total figure even though the UK is only a small part of the total package. A supplementary UK report may well be produced, but the assumption is that stakeholders around the world (UK included) want to know about the companys total effort. Implications The impact of the LBG model will vary widely from company to company, having little or no impact on some and a dramatically increased level of reporting for others. Use of the model will drive other changes too: some companies are measuring their commercial initiatives as charitable giving or community investment and they will need to re-classify them appropriately; companies that are including funds raised by employees and customers as the company contribution (when these are outputs in the form of leverage) will also need to re-classify these accordingly.
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The end result is not just better figures but better managed programmes and greater transparency about what is actually going on. Figure 7 The Impact of the LBG model on BT's reported contribution total
In BT cares, its recent report on the Community Partnership Programme, BT used the London Benchmarking Group model for the first time. In 1996/97 BTs community contribution valued on the traditional philanthropic Per Cent Club definition, was 15 million. But when valued following the principles of the London Benchmarking Group, the contribution actually amounted to 27.6 million. This figure includes commercial initiatives in the community valued at 2.4 million." The original figure of 15 million (approximately 0.5 per cent of profits) was based only on the activities funded from the central Community Partnership Programme budget. Applying the LBG model enabled BT to make a more detailed assessment of the companys whole community contribution, including community contributions that are driven by business needs, not traditional charitable motives. The main additional elements are: the work of the BT Forum, funded from commercial budget but very much aimed at meeting community needs, not direct marketing; time off for school governors; gifts of equipment; 1.5 million spent meeting the special needs of disabled customers over and above regulatory requirements.
In addition to the newly reported contribution of 27.6 million, BT has many other initiatives for public good, such as the maintenance of uneconomic call boxes in remote areas and the Malicious Calls Bureau, costing 4 million. These come under the business basics section in the LBG model.
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Benchmarking
This section looks briefly at how the improved data obtained from applying the LBG model can be contextualised and so used for strategic decision-making about the community programme. The main options are: relating community involvement data to the business, for internal management; benchmarking between companies externally; applying external standards; adopting the emerging principles of good corporate community involvement.
Business data Currently the main established indicator about the size of community activity is a measure of generosity - namely, the cost of the community contribution expressed as a percentage of the companys profitability. For example, some companies have publicly declared a commitment to contribute at least 0.5% of pre-tax profits or have set a target of 1% per annum. Others use such figures as an internal guideline for budget-setting. However during the business cycle, profit can fluctuate widely, while the community contribution tends to remain more stable. Within companies, the profit measure is not very practical as an indicator for individual operating units, where some are basically manufacturing and others, especially in the developing world, have high levels of social needs but low sales and hence profits. So the total community contribution can also be related to other indicators of business data, and then perhaps analysed on a geographical basis, such as: employees - contribution per head; sales - percentage of turnover; new capital investment - percentage; assets - percentage. In addition, dividends can be used as a measure for the company as a whole. These indicators can also be useful when comparing activity between companies in the same industry sector, as set out below. Benchmarking between companies Benchmarking is now a widely used tool of analysis in business, with a well developed methodology. The formation of the LBG was a good instance of the approach. The model itself devised by the Group does not offer a best practice model against which to benchmark, but establishes a common evaluation framework with consistent definitions so as to permit benchmarking. There is no right level of community contribution in total, nor a correct ratio between charitable gifts, and commercial initiatives, nor an appropriate level of management costs. It is for each company to set its own strategy and then use comparisons with similar approaches to understand better what the programme is costing and what it is achieving. Thus a programme centred around a high degree of local engagement and staff volunteering will have higher management costs and be focused more on charitable gifts than one run from corporate centre and concentrated on a few big grants to address carefully chosen social issues.
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Despite these differences, companies still like to know how much they contribute in total compared to others. Percentage of profit, despite its limitations, is the measure often used to normalise the data. Three practical issues usually arise: is pre-tax rather than post tax the basic measure? how do we count subsidiaries, joint venture and minority holdings? what about exceptional and extraordinary items in the profit and loss account?
Pre-tax profit has become the norm, largely for practical reasons since above that line in the accounts the detail on items such as operating expenses and interest costs differs between companies. However, this only works well between companies in similar tax regimes and international comparisons are probably better using post-tax figures, since the scale of public sector activity very much affects expectations about the extent of corporate involvement. Intellectually too, using post-tax is the better approach, since that is the residue left to shareholders, from which they can make a voluntary contribution to the community, after all the other stakeholders have staked their claim. The next issue is how much of a group companys community spend to bring into the total when it is only partly owned. The best approach is to follow the treatment of business data in the group accounts. Generally a full 100% is brought in, even if a lower percentage is owned, provided the group has effective control of the business. Joint ventures and minority holdings in associated companies usually only take a share of profits and so the computation of the community should follow a similar pattern. Finally, companies often adjust their accounts for exceptional and extraordinary items. To ensure a comparison between companies on a consistent basis, the general rule is to take profit on ordinary activities before tax - that is, after exceptional items but before extraordinary items. However, as noted above, percentage of profit has limitations as a measure, so benchmarking between companies can also be carried out on other business indicators, as cited above. Five year averages also help to iron out temporary fluctuations during the business cycle. It is important to make comparisons within an industry sector, as employee numbers, for example, vary greatly between a capital intensive company in the oil industry and a labour intensive business in retailing. External standards The main external standard is the business excellence model, whether the European Foundation for Quality Management, the British Quality Foundation model which is actually based on the European approach, or the Baldridge Award in the USA which in fact was the genesis of the EFQM model. The impact on society category accounts for 6% of the overall EFQM score, although an effective community programme can also contribute in other areas too, such as employee satisfaction. A quality approach is exemplified where the company can show trends over time and comparisons with other companies. Consistent application of LBG model will help companies to score well in impact on society, notorious for its low marks. The process is externally verified, so
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helping to achieve consistency, although the results usually not published. BT is one notable exception, scoring highly in this section and sharing publicly its approach. In the UK, the Per Cent Club has been operating since 1986, setting a voluntary standard for the level of community contribution. Starting out from a philanthropic approach, previously 0.5% of pre-tax profit (or 1% of dividends) was the goal to which members aspired, but a new target to achieve 1% of profit by year 2000 has been agreed. As current reporting practice in companies has evolved, the Club approach is converging with the LBG, so now companies valuing their contributions on LBG principles will broadly meet the Club criteria. The LBG model then goes further than the Club, which only looks at the contribution made, and not yet at what that achieves for the community, still less the company. Principles of community involvement In the US and the UK, practitioners have recently developed and codified sets of standards of what constitutes good management in corporate community involvement. Examples of this work comes from organisations including: the Centre for Corporate Community Relations at Boston College the consultancy, Bruce Naughton Wade, through its CCI Index BITC through its Principles of Corporate Community Investment
While these approaches vary at the level of detail, all include the need to quantify the inputs to the community programme and then to assess the outputs, without which management control is difficult. They recognise the LBG model as a good way to achieve this, providing as it does a set of consistent rules about valuation. Future developments Several leading companies are moving to holistic social reports, encompassing the totality of the impact on society. In these, the community contribution is just one facet. Typically social reports are mirroring environmental report in being linked to business objectives with statistics, monitoring, trends and verification. The LBG model applies very well in this more comprehensive and rigorous context.
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Section 4. The model in detail applying the output model
Section 4 - The model in detail applying the output model

Introduction
As the work of the original London Benchmarking Group and that of the follow-on Getting the Measure project developed, it became more and more obvious to the companies participating that their community programmes are best judged by what they achieve, not simply on how much is spent. The traditional way to judge a companys community commitment has been to assess the percentage of before-tax profits given to charity. This is a crude input measure and an apparently high rating can be accomplished with minimal real involvement in the community. Companies using the LBG model tend to adopt a different approach. They are engaged in the community. They are committed over the long haul and want to achieve results from what they do. They take a very small proportion of total corporate resources and seek to use them in a way that greatly amplifies their effect. Modern corporate community involvement is not about giving away money, even if some is given as donations in response to charitable appeals. Scarce corporate resources are increasingly available in the form of social venture capital where a blend of company cash, people time and skills, equipment and products are invested in the community to achieve clear goals both for society and the business. Once this view of corporate community involvement predominates, the measurement of achievement becomes the critical issue, just as in other parts of the business. Thats why we say the London Benchmarking Group model is applying business principles to corporate community activity.
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The importance of output measures

Before discussing in greater detail how output and impact measures can be used, it is worth spelling out why this focus on outputs and impacts is so important. There are five main reasons. 1. The debate is shifted from costs to benefits. By only reporting the inputs to community activities, programmes tend to be seen as a cost, not a benefit to the company. Measuring and reporting community and business benefits puts the costs involved into proper perspective. If community affairs managers want to argue that their job is more than giving away money, they must have the figures to prove that they are shrewd social investors. Senior managers will live with all sorts of costs if they think the benefits are worthwhile. What they will not accept is poor performance or, even worse, activities and programmes that have no clear outcomes and performance measures. They may give away small amounts but are much more willing to invest larger sums. 2. Output reporting gives the true measure of what is contributed. Only reporting input costs seriously undervalues the corporate contribution to the community. This is particularly true for small businesses and individual operating units within large companies. Later in this section, we show how Arkady Craigmillar, a small food company within the Unilever group, creatively uses its people and product resources to help charities raise over 90,000 for good causes, while also giving local young people valuable training and educational experience. The company does not have a formal community affairs budget. The input cost of its community giving is only about 2,000 in charitable cash donations, but this achieves leverage worth at least 46 times to the community. The community contribution by Arkady Craigmillar is never properly captured through the traditional input only analysis, which persists in focusing on cash giving as a percentage of profits. 3. Setting goals helps motivate employees and managers. In the business environment, goal setting is the key to motivating both employees and the managers who control the wide range of company resources of increasing importance to developing community programmes. As previously said, spelling out what will be achieved for the community and the company is often the key to encouraging involvement. Setting clear goals for community programmes and measuring performance against them also help to set boundaries on the commitments that managers and employees have to make to organisations and projects. Goal setting requires measures and milestones to mark progress, and progress itself motivates involvement. 4. Efficiency and effectiveness are improved. Using an input/output analysis enables companies to make management decisions about efficiency and effectiveness in community involvement based on the best possible outcomes for the least onerous level of contribution. The aim is to find ways of doing things in the community at a low input cost but high rate of return. This is how community involvement will grow across the business, when central giving budgets are generally flat or declining. A good example has been the creation of innovative ways for
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employees to be involved in the community in their spare time, the expansion of facilitated giving and the identification of company equipment with little or no value that can be used to help schools and community projects. 5. It is the outputs and impacts that really matter. As corporate community involvement grows in importance across the business, the question is increasingly being asked what does it achieve?. If companies do not build measurement into community programmes from the start and at least perform a simple input/output analysis, they will never know what their activities achieve, whether for the community or the business. We can only answer the question what effect did this programme really have? if we have begun by properly valuing inputs, measuring outputs and assessing impacts. A new product marketing strategy would never start without baseline research, clear goals and measures of success. The same must be true for major community programmes, whether the aim is to reduce the number of children leaving school at 16, to cut crime in a community or to halt the spread of HIV/AIDS. Some impacts can be identified within a year but others only emerge over a longer period. So if real community impacts are to be identified, companies and non-profits together must plan to measure them. The same is true of business benefits.
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Defining outputs
The original London Benchmarking Group spent a good deal of time on reviewing competing approaches to defining the outcomes or benefits of community involvement. Only then did it define its own terminology, so that members knew what they as a group were talking about, not muddling apples and pears. After review, the Getting the Measure project which involved a wider group of companies endorsed the original approach. This identifies three categories of output which in turn feed into the longer term analysis of impacts; simply stated they are: leverage the additional resources brought to a project or whole programme through the direct initiative of the company; community benefit the various ways in which the community gains advantage from the corporate support; business benefit the internal and external benefits which community involvement brings the company.
Leverage and business benefit are not necessarily expected to be present in every community initiative, but community benefits always are. Leverage Leverage is the additional resources attracted to an activity or project as a result of the initiative or participation of the company. One example is Diageos Tomorrows People Trust which draws about 80% of its funding from government sources. The charity fundraising efforts of Whitbread pubs are another example of very effective leveraging of funds for good causes, so are extra funds contributed by customers when a causerelated marketing initiative is structured to attract them. In some cases, the amount of leverage is a sufficient measure of the impact of a community involvement activity. Community benefit Community benefit is an account of the direct result from the company contribution. Charities and community based organisations have a vital role to play in helping companies succeed with this measurement. For example, IBMs computer-based systems have been adapted to help thousands of people with a disability. Marks & Spencer secondees can measure the efficiencies they help charities achieve and the number of new clients they are then able to serve. NatWests Face 2 Face with Finance programme to promote financial literacy has been made available to more than four in ten of UK secondary schools. So one measure of output is the number of people who benefit, usually in a one to two year time frame. An impact analysis will then show, for example, how many people with a disability get jobs or young people who open a bank account or set up a pension scheme, usually over a longer time frame.
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Business benefit Business benefit is normally the province of the company to measure and the results may only be reported internally. The benefits will often be small and incidental in the charitable gifts category. They become increasingly forceful factors in selecting and structuring projects in the community investment category. Commercial initiatives in the community, such as cause-related marketing, are usually built very much around the achievement of specific business goals. One example is Whitbreads support for local charitable causes. Often linked with employee volunteering, this has helped raise the profile of its business in local markets, where company community involvement activities are often reported as big news and much appreciated by customers. BP and Shell have sponsored the charity Comic Reliefs Red Nose Day - like Unilevers sponsorship of the London Marathon and UDVs support for the AIDS bike rides in the USA, these commercial initiatives in the community help to raise the brand profile and increase sales. Managers need a clear understanding of the business benefit component of the LBG model if they are to sell their activities internally and much of this information will be commercially confidential. However, publishing selected examples helps community partners to understand better the companys motivation and so make more appropriate applications for support.
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The input/output matrix

As we have seen, the very heart of the LBG model is the input/output matrix. It provides the framework for assessing each component part of a companys community involvement programme. By taking the time carefully to identify and value the wide range of inputs in cash, time and in-kind, the model properly sets up the discussion of outputs and impacts. This is the logical step-by-step approach of quality management and business excellence, in which benchmarking is an important tool to help achieve a better performance. By paying appropriate attention to points of even the smallest detail of current practice, incremental improvements are possible at every point. On the next page we bring together the input side of the equation and put it in context with the outputs outlined above. This is the basic LBG matrix, the tool for assessing each community contribution in turn.
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The LBG summary input/output matrix

Activity sub-categories (summary) Charitable gifts Cash Donations Social sponsorship Matching employee giving Employee involvement costs Other facilitated giving Time Employee volunteering Secondments In-kind Product gifts from inventory Written-down product or equipment Premises and other resources Community investment Cash Membership and subscriptions Grants and donations Secondments Time Other staff involvement In-house training, etc In-kind Product gifts from inventory Written down product or equipment Premises and other resources Management costs Community affairs staffing and running costs Commercial initiatives in the community Cash Sponsorship Cause-related marketing Other support Customers with special needs Time Secondments Development assignments In-kind Product gifts from inventory Written down product or equipment Premises and other resources Exceptional one-off gifts Totals: Inputs Monetary value Leverage Outputs Community benefits Business benefits
not applicable
not applicable
not applicable
Full accounting
Full
Partial
Partial
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Using the input/output matrix

When using the input/output matrix, three key points need to be noted. 1. Management costs The matrix presented in this way applies to the community activities of companies in the three categories: charitable gifts, community investment and commercial initiatives in the community. It enables the efficiency of programmes in these categories to be assessed, by relating input costs to outputs. Companies with professional management in directing charitable contributions and community investment also incur significant costs, typically in the community affairs department. The LBG approach specifically allows these costs to be counted as an element of input costs in the total reported. These management costs are recorded separately on the matrix above, but without leverage, community benefit or business benefit directly attributed to them. For small companies without separately identifiable management costs in a community affairs department, this may not be an issue as management time will tend to be accounted for under the time component of charitable gifts and community investments. 2. Using totals The matrix makes provision for some totals under each column, although the approach is different for each, as shown in above. Theoretically at least, it is possible to conceive of questions such as given the total cost of our community contribution, what is that buying for the community and the company, and is their a better way of achieving the same or better results? Sometimes companies describe their CCI as community investment, inviting the question what is the return on our investment? The possibilities of doing this for individual projects are discussed below, while the issue of whole programme evaluation is considered in below in Section 10 -Management challenge. Input costs By using the LBG model for valuing inputs, it is now possible to give a much more accurate account of the aggregate cost of community programmes. The basic approach to valuing this contribution was summarised above. Section 3 - The model in detail applying the input model, sets out the approach in detail. It also gives examples of how applying the matrix has increased the apparent totals reported by companies, mainly through better data capture and a more inclusive approach. Leverage It is also now possible to give much more accurate accounts of the total leverage achieved by various community initiatives. These can be applied to the cash contributions, and also in time and in-kind and from the public and non-profit sectors using the same valuation principles. For example, BT Swimathon (Case Study 9) cost the company 2.7 million to organise in the period 1994 to 1999 and has yielded 8.3 million in fundraising from participants.
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Community benefit Because of the complexity and diversity of whole community programmes, it is doubtful if a truly accurate accounting total for the entire community benefit can ever be achieved. Putting a monetary value on any such total benefit is even more fraught with difficulty, making a financial comparison between input costs and output benefits most unlikely. However it is possible to envisage a simple total of one aspect, like number of young people assisted by all the separate projects. For example, BP Amoco has numbered the community organisations it has helped each year and begun to assess the number of individuals touched by its activities worldwide. Over time and in collaboration with non-profit and public sector agencies, it should be possible to improve greatly the assessment of the community benefit with simple output measures at least of the spread of benefit. Business benefit As with community benefits, the types of business benefits a company can receive from its community programmes are various and not always easily quantified, still less aggregated. However, it is possible to assess consistently some key elements, such as turning total press coverage into a notional cash value or aggregating increased sales revenues from cause-related marketing campaigns. At least this begins the process of putting a total value on the community programme as a whole compared to its cost. Where gaps exist in the quantitative data, qualitative measures can sometimes help: for example, lacking a statistically representative assessment of opinion former attitudes, commentary and selected quotations from a few well known individuals can paint an impressionistic picture instead sometimes a more effective communications medium than dry statistics. Then through a process of incremental improvement, such gaps can be filled to a point where an annual performance assessment of programmes can be made. 3. The timeframe In its basic approach, the input/output matrix represents a form of annual accounting of community activity, usually based on the companys financial year. We have said previously, the timeframe for capturing community activity is within one year for inputs and normally between 18 months or two years for outputs. However regular annual accounting can be maintained by accruing some of the leverage, community and business benefits derived. This accrual mechanism is to allow for the lag which may occur between a company initiating a programme and its implementation on the ground. By keeping accurate records on an annual basis, a company can begin to measure the cumulative effects of its activities over time.
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Measuring impacts
Remember that much CCI activity is not about achieving separately identifiable community or business impacts. Companies are quite often happy to give major gifts without expecting specific outputs or impacts. They trust the charity to use the money well. Similarly with major fundraising drives, such as a facilitated giving campaign, the main measures of success are the numbers of customers involved and the size of the cash sum levered by customer participation. Companies may not want to tie this effort to achieving specific community or business impacts. Companies may also be content to achieve a range of simple outputs, broadly indicative of progress; for example, one hundred new computers for a local school is a simple measure of implicit community benefit, while extensive press coverage of the gift is a simple indicator of implicit business benefit. The reasonable assumption is that this type of gift does provide mutual benefits, even if they are not measured in detail. That said, companies today are increasingly aware of sustainability and the nature of some social and environmental problems. They will only commit major resources to programmes where the long-term community and business impacts can be demonstrated. So companies and their community partners need to be very clear about their goals before creating a strategic path to achieve them. In this context the careful use of input resources and the achievement of various outputs are viewed as milestones along the road to the goal of real impacts. By impact in this context we mean clear, measurable changes in the wellbeing of people or the environment, not lists of programme activities.
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Section 5. Assessing leverage
Section 5 - Assessing leverage

Introduction
Leverage is the additional resource attracted to an activity or project as a direct result of the initiative or participation of the company. The concept is included in the LBG model to show that company contributions can act as the catalyst for increasing resources to community projects. In most countries, corporate contributions form only a small proportion of total third sector funding. But they can be used to support innovative projects and lever resources from more traditional funders like the public sector. Leverage is a proactive intervention by the company to maximise the resources going to a community programme. It may also be regarded as a measure of the endorsement a programme or project receives from employees, customers, business partners and the wider public. Leverage should not be confused with the many types of matching contributions, which are often found in the funding of larger community projects. In these cases, several funders agree to support a project, mutually seen as worthwhile but without clear leadership from one party or another. Care is also needed not to count as leverage total project funding where the company only plays a small supportive role. The task is to distinguish between cause and effect. The test is often who is taking the initiative to achieve the leverage literally, whose hand is on the lever? Under the LBG model, the aim is to capture the initiative of the company to the community. In this chapter, a broad range of good exemplars show how leverage is possible in all three categories of community involvement. Some are extracted from more detailed case studies which are presented in full as part of Section 16 Case studies.
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Assessing leverage from charitable gifts

Firms like Whitbread with an extensive leisure estate have long used their business premises and donated products to help community-based fund-raising. Whitbreads pubs, restaurants and hotels raise over 2 million a year for a wide range of good causes. High street banks like NatWest regularly use their capacity to collect funds across branch counters: in 1998 NatWest collected 27 million for major charitable appeals in the UK, a figure three times its own cash contributions that year. For projects which are essentially about charity fundraising, the cash and other resources levered into a project by the companys action may well be the sole measure of success. This is particularly so if funds are donated to a general appeal and no attempt is made to measure the distinct community benefit that accrues. The extract from Case Study 1 a project developed by Nationwide Building Society shows how corporate support has enabled a health charity to raise funds and educate school children. (This extract focuses on leverage and the full case study also deals with community and business benefits). Extract from Case Study 1: Nationwide
In February 1999, Macmillan Cancer Relief held its Nationwide-sponsored Hold Your Tongue event. Children across the UK held 10 minutes silence to raise funds for the national cancer charity. This was the second year that Nationwide has supported the event, which combines the fun of a sponsored challenge with helping children to understand more about cancer. Inputs Cash donation of 30,000 In-kind contributions made by employees in Nationwides media support section to help present the event Leverage Nationwides contribution enabled the event to take place and, as a result, over 175,000 has been raised to date for Macmillan Cancer Relief with more money still coming in. Nearly 280 schools across the UK took part.
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Assessing leverage from community investment

The charity, Tomorrows People Trust, set up by Diageo, specialises in running youth training schemes. Public monies from national training schemes provide the bulk of the funds for its operation, but this is made possible by the companys initial commitment of cash and managerial support and its on-going core funding. So this too can be seen as leverage, as Diageo took the initiative to set up and sustain the Trust in the first place. Currently, Diageos 500,000 annual contribution levers some 3 million in other external support. In fact, leverage is not the primary measure of the success of this project but it is a good measure of the governments faith in it and the way in which the company can multiply the value of its initial contribution. Another major national example comes from BT which set up and now supports the annual Swimathon event: this has cost the company 2.7 million but raised nearly 9 million through the efforts of over 45,000 volunteers each year, a ratio of more than one to three (see Case Study 9). This is the largest fundraising swim in Europe and beneficiaries have been Marie Curie Cancer Care, the Princes Trust and the British Lung Foundation. Business benefits included over 1,300 items of positive publicity in 1998/99, resulting in 20% public awareness of BTs involvement. In contrast and at a very local level, the extract from Case Study 8 below shows how Whitbreads gift of in-kind resources led to the development of a youth and community centre. Extract from Case Study 8: Whitbread
Whitbread has a strong trading presence in north west England and provides equally wide ranging to community support. Following construction of a set up a Beefeater Restaurant and Travel Inn at Salford Quays, eight portacabins were donated through the Whitbread CARE (Community Action by Recycling Equipment) programme to provide a community centre in nearby Swinton. Inputs In-kind support: eight portacabins donated media support from Whitbread PR agency support and refreshments for launch event IT equipment, TV and furniture Cash donations: 2,000 for foundations and services 1,250 for third party insurance, transport and crane hire expenses Leverage Whitbread involvement used to persuade other companies to support the project: transport company moved portacabins on two vehicles; crane hire company provided cranes and team of eight people; Barden Road Stone Company supplied 80x2.5 ton boulders to secure the area. Whitbread suppliers and contractors provided resources free or at cost: Readymix Concrete at cost; Master Fitters free installation; North West Water free connection. Salford Council has also contributed 40,000 to the whole endeavour, with the national lottery granting 22,000. Sports Council funding of 75,000 for floodlit multi-sports facility was also helped by letter of support from a senior Whitbread director.
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Assessing leverage from commercial initiatives

A similar leverage effect can be generated by companies through their commercial initiatives too. In the early 1990s, BPs cash sponsorship of the Comic Relief appeal included the sale of red noses exclusively from the companys service stations. The funds raised through the sale went straight to the charity. When Unilevers Flora margarine sponsors the London Marathon and UDVs Tanqueray Gin supports the AIDS Bike Ride in the USA, the companies are helping charities to engage the public in vast fund-raising events, generating resources for good causes far in excess of what the companies themselves could ever give. Tanqueray Gins sustained support of the AIDS Bike Ride has helped it grow from a small event in the first year to one which is considered by the Guinness Book of Records to be the largest single fundraising event of its type. The United Utilities Case Study 13 shows how its small business venture capital fund has attracted additional funds to support business growth. Based in the north west, this region is the centre of UUs business operations and faces challenges to re-new its economic base. Extract from Case Study 13: United Utilities
In 1996 United Utilities launched a 10 million fund to help improve the prospects for small and medium sized businesses in the early stages of development, covering Greater Manchester, parts of Cheshire and Lancashire. A partnership between the private and public sectors and the European Union (through support from the European Regional Development Fund), this offers new or existing SMEs an additional source of equity finance. Managed by Innvotec, an investment management firm, it has a ten-year life and also provides business advice, access to information and active management help. Inputs Cash: One off payment of 4 million towards the fund. Time: A UU employee has been seconded to help manage the fund for the last two years (approximate cost 22,230) The Group Finance Director is the executive sponsor and sits on the Board of the fund. In-kind: The Fund can call on UUs specialist resources when needed. Leverage UU involvement levered an additional 6 million towards the total 10 million project fund, including resources from the European Regional Development Foundation. A further 15 million has now been raised in project funding.
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Example of small company leverage

So far we have examined single examples of effective leverage by leading companies. What about the many more numerous small and medium-sized companies? Can they gain leverage from the use of in-kind and people resources? Research specially conducted for the Getting the Measure project found that this can be the main way in which they contribute to the community. An excellent example is Arkady Craigmillar, a small firm part of the Unilever group, which has built a really worthwhile community programme by using its products and people resources. Arkady Craigmillar in the community Arkady Craigmillar was newly created in 1996 by the merger of two existing Unilever food businesses. It produces bakery ingredients, premium bread and confectionery ready packaged for sale to the bakery industry. Its range of branded goods include premium quality doughnuts as its leading product. In 1998 the company had total sales of 81 million and 588 employees based on two main production sites, Wirral in Cheshire (438) and Manchester (150). The company does not have a formal community policy but in line with local traditions and Unilevers policy of being a good corporate citizen, the company has used its noncash resources to help charities, schools and a local university. Specifically, sample doughnuts used for testing and so not able to be sold to retailers are donated to local schools and charities which raise funds at local events. When used creatively, these and other resources which have no additional costs to the company, bring real community benefits in all three categories of community involvement, as the box table below shows. This presents an initial assessment of its community contribution and demonstrates how input analysis alone can understate the full value of a companys initiatives. Also apparent is the tremendous leverage achieved from the use of products, people and other resources.
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Table 1. Arkady Craigmillar: creating benefits for the community in 1998

Activity Monetary value of inputs Outputs Leverage Community benefits Business benefits
Charitable gifts a) small donations of cash in response to appeals b) regular donations of a minimum of 50,000 doughnuts, sold by the recipient at 50p each 2,000 None Not measured in detail; expectation that the funds are well used by schools or Scouts, Guides, local hospital, etc A reputation amongst community and employees as a company that cares - one that tries to help. Small savings on disposal costs / landfill tax, not quantified
None
25,000
c) employee fundraising None using doughnuts in support of National Doughnut Week Community investment a) in house training for Sir John Moores University students in accounting, production and quality control Staff time / costs not quantified
1,800
None
The education and training of local students and pupils is enriched by experience in the workplace
b) work placements for school children
Staff time / costs not quantified
None
Some useful work is done for the company. A reputation as a good employer is established with the education service and young people. The possibility exists of finding good recruits to the business.
Commercial initiatives in the community Support for National Doughnut Week in aid of Save the Children. 1,500 retailers donate between 5p and 25p for every doughnut sold during the promotion lasting one week Totals Management time and packaging adjustments, costs not quantified 67,000 This is general support to Save the Children and no greater quantification was pursued. Brand image is enhanced and positioning in the retail stores improved. Sales increased were estimated to be around 20% Not quantified
2,000
93,800
Not quantified
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Employees as a special case

Use of the concept of leverage with employee community involvement has to be treated with special caution. Companies are very concerned not to be seen to colonise and claim credit for the pre-established voluntary efforts of their employees - and rightly so. For example, NatWest supports its employee school governors and charity board members with a small unconditional grant of 250 per year to the school. The offer of such a contribution is unlikely on its own to lever the involvement of employees in the serious and time consuming business of governing a school or charity. Rather it recognises the contribution employees are already making and encourages them to play more of a leadership role. This is why NatWest does not count employees time as leverage. The same issues of concern are true for the matched funding companies often give to employee fundraising and other types of volunteerism. Who is levering whom? Where companies do offer strong inducements to employees to get involved, it may well be appropriate to claim leverage. There is no right answer to this issue, only one which the company and its employees feel is right. They must assess each case on its merits. If in doubt, dont claim leverage you cannot directly attribute to your action.
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Section 6. Measuring community benefit
Section 6 - Measuring community benefit

Introduction
Creating benefit for the community is the core purpose of corporate community involvement. All three categories of activity, charitable gifts, community investment and commercial initiatives in the community, must make a demonstrable contribution to the enhancement of the public good in one form or another. The challenge is to measure properly that contribution so as to manage programmes and individual projects for maximum impact and to form a basis for internal and external reporting. To achieve that goal, companies must work very closely with their community-based partners, which carry the primary responsibility for monitoring and measuring the community benefit. The original LBG identified this issue but did not consult with the charity and wider nonprofit sector about how to address it. The follow-on Getting the Measure project did and with CAF as a partner, a dialogue was opened with leading charities as well as companies. Some were wary of new demands for information on performance at the onset of the dialogue - rightly so, since many funders are asking for more and more information about impacts but are notoriously reluctant to fund the research work necessary to gather meaningful data. However, broad consensus rapidly developed that both parties have a mutual interest in addressing the issue and that the LBG model offers a very useful way forward, not least because it is flexible enough to permit continual improvement in varying approaches. Quotes from just two charities are indicative of the views of those taking part in discussions. It is good news for us all that CCI moves away from being a woolly paragraph on the inside back page of the annual report to being a tabled and audited account I am entirely of the view that a corporate /charity relationship, when set out in a benchmarking framework such as the LBG model, will better serve the interests of the companys stakeholders NCH Action For Children My department are all well aware of the needs not only of the corporate sector, but also of charitable trusts and individuals, to know what their donations really achieve. We therefore intend to build in the opportunity for measuring impacts to all initiatives where appropriate BTCV It became one of the informal slogans of the project that in the future companies should be known for what we achieve, rather than how much we give. With this goal in mind,
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the following section looks at how the companies are currently measuring community benefits and at the measurement strategies some leading charities are adopting.
Measuring community benefits from charitable gifts

North West Water (part of United Utilities) has supported the WaterAid appeal in region for 15 years. As the extract from Case Study 2 shows, together they have raised 2 million over the last four years, helping 180,000 people in the developing world get access to clean water. This brings incontestable benefits to some of the most needy people in the world and is a clear example of a company using its special and diverse resources to champion a community cause. Closer to home and on a smaller scale, we saw above how Nationwides 30,000 donation and in-kind support to the Macmillan Cancer Relief Fund reached 140,000 school pupils and raised 175,000. These simple output measures of success give a clear context to the costs of the inputs, and most people would judge these to be very successful projects where corporate resources have been very well used. Extract from Case Study 2: United Utilities / North West Water
North West Water has had a 15 year partnership with WaterAid. The charity was set up by the UK water companies in 1981, in response to the UN decade of water in the 1980s. The goal is to help people and communities in developing countries achieve sustainable improvements in water supplies, sanitation and hygiene. NWW launched the Thirsty World Appeal in 1994. In 1997, it celebrated raising 1 million in the north west and launched a new target of 2 million. Inputs Community benefits Direct Cost: Fundraising leaflet to accompany 1,800,000 raised for WaterAid through the Thirsty water bills approximately 20,000 World Appeal in the north west over four years. As each year. projects cost less than 10 per head, that equates to over 180,000 people gaining access to safe water and Time: Volunteer staff time, costing at least sanitation in Africa and Asia. 2,000 pa, from employees serving Promotion of WaterAid locally through billing leaflet, WaterAid committee members. promotion and events arranged by NWW. Also high awareness and support for WaterAid amongst NWW In-kind: Extensive other support including employees. hosting of events, local promotion of Indirect the charity to the community and Improved access to clean water and adequate schools, senior executive participation, sanitation, thereby reducing world deaths from water and media support. related illnesses. Highlights the importance and value of water to customers in the north west and increases awareness of WaterAid.
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Measuring community benefits from community investment

In the section below, we show the results achieved by NatWest from its Face 2 Face with Finance programme. Some 2,400 schools have participated in the programme to date with over 146,000 students benefiting from teaching and learning sessions designed to improve their financial literacy. Below we present an extract from Case Study 7 from Unilever, another schools initiative, this time focussing on improving the management of schools as institutions. In this case, the output measure of success is not the number of pupils benefiting but the attainment by individual schools of performance certified by a recognised accreditation agency, Investors in People (IiP). Extract from Case Study 7: Unilever
The Unilever sponsored Investors in People in Schools aims to help schools local to company sites attain the Investors in People standard. The programme was launched in 1997 in the belief that the IiP process, originally designed for business would benefit school s by providing a framework for staff motivation and development leading to improved pupil performance. Inputs Community benefits Unique partnership between Unilever centrally, its Unilever centrally: 100,000 for project management, operating companies, their TECs/EBPs and local provision of materials and provision of schools. accredited trainers Out of 100 schools taking part in the Unilever programme in 1998, 30 had attained the IiP standard Unilever companies locally: In-kind support through by the end of the year, and others were well on course. accommodation, refreshments, etc for workshops - 12 company sites each An independent evaluation showed the majority feels hosted a five-workshop programme the IiP process has changed the culture of the school, Time support through local company resulting in greater staff commitment impacting on staff hosting and inputting to pupils educational attainment. workshops
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Measuring community benefits from commercial initiatives

One innovation of the LBG model is to bring the community benefits of a companys commercial initiatives into the overall review of the corporate contribution to the community. Previously companies had only really counted and reported the charitable and community investment components of their work in the community. Yet benefits from commercial initiatives are many and various. Cause-related marketing, for example, has raised immense sums for good causes. One example of CRM is the Tanqueray American AIDS Rides campaign. The brand is part of Diageos portfolio and over six years it has helped raise more than $130 million for HIV/AIDS causes, involved 35,000 people in the rides and many more in supporting the riders. Tanqueray offsets the running costs (a total of $900,000 in 1998), so the fundraising goes straight to the good causes. The company also provides marketing expertise and employs a public relations firm to promote the events. This generates massive media coverage to the event and the cause it supports. The Guinness Book of Records says it is the largest single charity fundraising event in the world and the sums raised each year far exceed any corporate charitable giving for the issue. The control and use of these funds levered by the companys involvement is with the community groups that receive them; they determine the nature and degree of community benefit. When CRM is initiated by marketing departments, commercial mangers are often happy to leave the assessment of community benefit with the charities themselves as experts on the issues. This can pose a practical difficulty for community affairs managers seeking to include these commercial activities and their community benefits in an assessment of the total corporate contribution. One example where good monitoring of community benefits from commercial initiatives has been achieved is a project by Camelot to tackle under-age play (described in more detail as Case Study 12 below). To track success, the company has encouraged retailers to record how many times they refuse to serve would-be purchasers that are under 16. So far, on one million instances retailers have exercised their discretion not to serve young people, bringing benefit to the community as well as the retailers and Camelot. On a smaller scale, Marks & Spencer (Case Study 14) arranged for an employee to undertake a one-hundred hour development assignment. This programme aims to enhance staff skills and is organised through the training department, so the project is classified as a commercial initiative. As the summary extract below shows, the aim of the assignment was to devise a sponsorship strategy for a local education action zone which, if implemented effectively, would generate up to 1 million funding a year. This huge community benefit could be achieved at a cost of around 2,000 in staff time.
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Extract from Case Study 14: Marks & Spencer

A one hundred hour development assignment (staff skills development) to examine education action zone sponsorship arrangements and to design a strategy for implementation. Each EAZ stands to gain 25,000 in private sector support and 150,000 in central government funds each year for three years. Inputs Time 100 hour development assignment, estimated national cost 2,000 Community benefits Sponsorship position assessed, found to be weaker than anticipated - early action to put on track again to achieve target (250,000K pa x 3 years). Strategy designed: a framework set to meet basic obligations and prospect for exceeding them. New contacts identified for follow-up. Enhanced capability of director to build on relationships through focused approach.
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The charities perspective on measuring community benefits

Charities and the non-profit sectors generally, including schools and hospitals, are very aware of the need to measure the value of their contribution to society. Firstly, they owe it to their supporters and those they serve to be as effective and cost efficient as possible. Secondly, in the world of competitive fundraising, it is vital for non-profits to be able to demonstrate to funders, both private and public, that the resources they receive are deployed effectively. Consequently concern about good measurement is nothing new for companies community partners. Indeed many charities are actively seeking to use quality management principles to improve their ability to measure their effectiveness. So companies and their community partners share a common interest in developing and applying better measures to quantify community benefit. A common language is emerging between the sectors and many of the charities consulted by the Getting the Measure project have clear strategic plans with strong evaluation components. BTCV is a good example. Established in 1959, it is the UKs largest practical conservation charity, annually involving 95,000 volunteers in projects to protect and enhance the environment. With around 700 staff (350 of whom work for its trading subsidiary, BTCV Enterprises) and a turnover of 13.5 million, work, it achieves over 700,000 volunteer workdays each year and supports the work of close to 7,000 local community groups. The charitys evaluation of its performance is embedded in a strategic planning process, which sets objectives for a four-year period. Annual reports chart the progress and revise targets towards meeting the objectives. The output measures used for the organisation as a whole include the numbers of: local groups supported; volunteering opportunities; people helped by BTCV each year; training opportunities.
These total numbers for the year are made up of the many individual activities and programmes that BTCV runs. In addition, it regularly gives reports on individual activities and programmes to corporate supporters and others. For example, it has provided BT with a detailed assessment of a programme the company supported to improve the grounds of schools. It reported to Shell UK on the health benefits of conservation volunteering and the socio-economic impact of Barclays environmental programme, Site Savers, which restores derelict sites and makes them useful to the community. Where a company is providing core funding to a charity, the community benefit can be taken as a simple share of the achievements of the whole organisation, as tracked by the type of strategic planning process described above. Where support is for a particular project, much of the required data is generated from its normal management plan. However, some forms of community benefit may need to be separately researched and these should be identified before the project begins. In a large
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programme, not every aspect needs in-depth research, but it may be advisable to do a simple baseline study on one or two aspects or in one or two communities from which indications of overall change can be extrapolated. Companies asking for such information must be willing to bear at least some of the extra costs.
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Charities own use of the LBG model

Consultation with the charities for the Getting the Measure project showed that the LBG model can be a useful tool beyond evaluating company-funded projects. Firstly, the model can be adapted as a management tool for the charities themselves. In the input column, they put the cost to the charity of developing the project; for example the time and effort of their fundraisers. Resources levered are the company and other contributions received. Community benefit stays the same (it is the services provided). The business benefit column is adapted to capture the wider organisational benefits to the charity. These measures are often remarkably similar to those sought by the company; examples include press coverage received or opinion formers influenced. A cause-related marketing initiative with substantial advertising resources not only promotes the company brand and the project but the charity brand as well. A second use of the LBG model is to provide a clear language for talking to companies. It guides fundraisers and programme staff as to the outputs companies might be looking for from different type of projects. Those considering a commercial initiative need to hear about the business benefits, first and foremost. If a simple charitable gift, they may well respond solely to a presentation of social need and what the charity will achieve (ie the community benefit only). However, if charities are looking for longer term community investment partnerships, they need to stress both the community and business benefits. ActionAid, one of the charities consulted, has taken up this particular challenge most effectively, as shown by the following box example.
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ActionAid and corporate support ActionAid is a UK based charity concerned to promote the relief of poverty and distress in over 30 developing countries in Africa, Asia and Latin America. Countries such as India, Kenya and Uganda have particularly large programmes. In 1998 its annual budget was 44.4 million and it employs more than 2,200 people of which 1,800 are overseas. Communicating with companies ActionAid has taken the LBG model and turned it into a marketing brochure aimed specifically at companies, Keeping Good Company : ActionAid and Business Working Together. The brochure sets out how companies can work with the charity in the four categories of the model, as summarised below.
LBG category Charitable gifts Examples of ActionAids corporate partnership The Psion computer company has made charitable gifts since 1989. JP Morgan matches the gifts of employees pound for pound. Many companies promote ActionAid as a charity to be supported from employee payroll giving. Allied Dunbar has seconded staff on short term, assignment over several years to help implement a major project in India. An employee of National Semiconductors has worked to help ActionAid improve its fundraising and public relations. An affinity card launched with MasterCard has brought 500,000 of new income. A cause-related marketing programme with the Procter and Gamble soap powder brand in Italy, DAZ, raised over 1 million for health and water projects in Ethiopia. Acting as consultants to companies in: Africa - to help protect employees from HIV/AIDS; Bangladesh to improve worker health and safety in garment and other factories.
Community investment
Commercial initiatives in the community
Business basics
Measuring community benefit ActionAid has a separate department concentrating on impact assessment and programme learning, specifically addressing monitoring and evaluation. ActionAid sees impact assessment as a critical component of reflection, learning and on-going improvement, understanding the changes (intended and unintended) in the lives of men, women and children. All programmes are subject to periodic review, with detailed reports both for internal management purposes and to inform funders. Typically such reports include: quantitative data on beneficiaries, for example the numbers of children in school assisted and adults receiving medical check-ups, with appropriate subcategories; numbers on the progress on key milestones, such as the provision of new schools and clinics; small case studies, offering qualitative assessments;
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the results of base line surveys, for example on the extent of malnutrition or illiteracy in the community; where possible, assessments of the longer term impact.
In addition, ActionAids published annual report includes case studies and detailed statistics on programmes around the world, to inform funders and others of progress with the whole organisation.
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Section 7. Measuring business benefit
Section 7 - Measuring business benefit

Introduction
This section presents a series of examples where companies have been able to use community initiatives to achieve demonstrable business benefits. This is not to minimise the importance of the community benefits indeed corporate community involvement would not be effective without that as the primary purpose. By focusing on business benefits, we seek to emphasise again that community involvement is a business discipline which can be subjected to a quality management approach including the question does the community investment justify the cost in terms of the returns we can expect to achieve?. Companies may decide that for all or part of their community activities, they do not want any business benefits. They can, if they wish, act in the community as anonymous philanthropists. However, for publicly owned companies in the modern world, this approach is pretty rare. So we argue it is best to be explicit about the business benefits you seek from community activities and ensure these are achieved or else CCI budgets are unlikely to be sustainable. In the charitable gifts category, it is the public benefit that first and foremost drives company involvement. If publicised, a company can gain a reputation for caring and generosity, and arguably, the greater the perceived public benefit the more that reputation is enhanced. Community investment programmes are the win/win scenario when both the community and the company benefit in equal measure over the long term. With commercial initiatives in the community, the direct commercial interest of the business drives the involvement. Usually funded from budgets in marketing, human resources or research, line managers need to demonstrate value for money and competitive advantage. So selection of community projects is driven by the companys most commercial needs, not societys social priorities. This may place arts and other sponsorships well above more pressing social issues because of the high public profile they can offer a business or a brand. (Other parts of the portfolio of corporate community involvement are often better placed to address these pressing issues.) The types of community involvement undertaken and the specific business benefits sought vary greatly between industries and between individual companies. Nonetheless, from the case studies provided by the companies participating in the Getting the Measure project and presented here, a clear picture emerges. Most projects seek to improve reputation and attitudes about the company as a whole among external audiences. Many also seek to influence internal employee attitudes and often also to enhance their skills and capabilities. Beyond these, changing consumer behaviour through cause-related marketing, is a growing area of business benefit.
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The LBG model is an excellent tool for clearly identifying and managing these benefits, working especially well on a programme-by-programme basis. The inputs are clearly measured and the business benefits as outputs defined and captured. In this chapter we examine examples in all three LBG categories of community involvement, highlighting the benefits to the companies themselves (the full case studies showing leverage and community benefit are given in the Section 16 Case studies). For reasons of commercial confidentiality, not all case studies can present the full details of benefits gained with hard assessment data. The chapter ends with two case studies of how whole CCI programmes, as opposed to individual projects, have achieved a positive impact on external attitudes, and we are grateful to Whitbread and BP Amoco for releasing their private survey data.
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Evaluating business benefit from charitable gifts

We said earlier that obtaining business benefit is not the main motivation for projects in the charitable gifts category of the LBG model. Nonetheless both the case studies from Nationwide and United Utilities and the following example from American Express show significant benefits are obtainable. American Express has long championed the idea that good corporate citizenship has two dimensions: firstly, the behaviour of the company itself as a corporate member of society and secondly, the role it plays in supporting employees in expressing their personal commitment as individual citizens. For many years in the USA, the company has supported extensive employee volunteering schemes and in 1996 it took the step of setting up a programme to extend them overseas. At the heart of American Expresss approach is the belief that the company should support employees in their choices for community action and not direct them. The programme is employee led and company supported for the good of the community. The programme is philanthropic in intent and style. The company sets no strategic goals for community benefit nor does it set out to gain specific business benefits either. But business benefits become all the same as the extract from Case Study 3 below shows. The individual employees appreciate the companys support and feel proud that they can use it to help their community. In addition the programme brings employees together from across the business and helps to build a sense of belonging to the company. Externally, to opinion formers in particular, the programme helps American Express to show it is truly a local citizen of the countries where it trades, one which backs the talent and commitment of its local employees as they help build the local community that they and the company share. Extract from Case Study 3: American Express In 1996 American Express launched its Global Volunteer Action Fund to take overseas an established US programme which supports company employees in volunteering in their local community. Employees are encouraged to work in their own time for charities of their own choice in their local community. The company believes it is right to support employees in their personal commitment to good citizenship and provides them with advice from a co-ordinator and small grants to the organisations they work with. The programme now runs in 28 countries and has grown at an average of about 50% a year since its inception.
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Inputs Cost Over four years a total of $482,500 has been made in grants to the organisations employees work with. In addition, CAFs charges for administering the programme have been met by the company Time and in-kind support time and in-kind support such as telephones, copying and publicity materials for 20 volunteer programme co-ordinators around the world. They spend about 2 hours a month in work hours to administer grant proposals, offer advice to participants, communicate about the programme and organise recognition for the volunteers.
Business benefits Internal Employees have welcomed the initiative. It continues to grow and most employees stay active once they have participated. They can practice their business and personal skills in new surroundings and the programme supports their morale and pride in the company. They are also given recognition within the business and the community as leaders. The programme brings employees together from across the business within the country and to the extent they work in teams, allows employees of all grades to mix. It is featured regularly in company publications, achieving a high level of awareness. The programme also helps create a common sense of company identity around the world. External Especially in countries where corporate community involvement and volunteering are new, the programme has been recognised as a valuable contribution to the society by local and national leaders in the public and non-profit sectors. The philanthropic values of the Global Volunteering Action Fund are particularly well received because the company is also very active in strategic commercial sponsorships: the programme helps balance its profile as an all-round good corporate citizen, one that is active in philanthropy, community investment and commercial sponsorships that directly serve business interests as well as those of community partners.
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Evaluating business benefit from community investments

If the business benefits from charitable gifts accrue largely in terms of reputation and being seen to care, then community investment yields a broad range of benefits, often including staff development and employee morale. This is apparent from the extract from SmithKline Beechams Log Cabin project (Case Study 4), part of its Europe-wide employee involvement programme. Close to its UK headquarters site, the project has brought a diverse group of staff together, covering eight business units, fourteen functional areas and all levels. Extract from Case Study 4: SmithKline Beecham The Log Cabin is an adventure playground for disabled children assisted by staff from SmithKline Beechams Brentford office, as part of the Partners Programme, SBs Europe-wide employee involvement scheme. Every participating site must identify a not-for-profit partner in their local community which reflects SBs European focus of childrens health. The partner must also offer the opportunity for as many staff on the site to be involved as is possible. The staff on the site should use the cash donated to leverage further opportunities such as fundraising events.
Inputs Cash donation 5,000 In-kind giving SB supplies nutritional drinks for events run by the charity, left over sponsorship goods mugs/t-shirts etc (no cost attributed) Volunteer days During the Community Investment Day, SBs Corporate Management Team worked at the Log Cabin, repairing, painting, gardening cost approximately 10,000 Business benefits Enhanced reputation in the local community between 350 and 1,000 families affected by the project, telling their friends and colleagues. Partners work together with local suppliers for items needed mulch, a kitchen etc - thus raising awareness of SB as a good corporate citizen. Improved recruiting statistics have shown that good community involvement programmes is important to prospective graduate applicants to SB. Staff development this project gives participants the opportunity to mix with people from all business units within SB and with all other functional areas and at all levels within SB it is a completely unique project in this respect. It also gives all participants the opportunity to be project managers and team leaders regardless of their job or grade and makes participants feel good about their company, thus less likely to look for satisfaction elsewhere.
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An employee developing initiative

NatWest has taken the focus on employees a stage further and given support to an ongoing programme of placing business people on the boards of arts organisations. As the extract from its Board Bank project below shows (Case Study 10) very significant employee benefits can be derived from volunteer staff participation, usually in their own time. Extract from Case Study 10: NatWest Board Bank was launched in March 1996 to provide arts organisations with the opportunity to strengthen their boards with skilled business managers, and enable business people to become involved in the governance of arts organisations. The scheme is managed by Arts & Business, which promotes partnerships between business and the arts.
Inputs NatWest has contributed 105,000 (35,000 a year for the three years 1996-1999). Business benefits 40 NatWest staff have joined the programme to date, along with 550 other business people from more than 320 companies. Independent research into how Board Bank members benefit from their board place shows: 92% gain new skills or knowledge; 77% gain increased confidence; 77% increase understanding of board duties and responsibilities; 71% learn new approaches to problem solving and new methods of creative planning; 72% improve their meeting skills. In addition, positive profile is gained with the media and government (NatWest hosts key events with opinion formers); NatWests arts support is clearly positioned as based in people, not high profile sponsorships.
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Evaluating business benefit from commercial initiatives

As we have already stressed, business benefit is what drives commercial initiatives in the community; initiatives in marketing in particular are aimed at creating advantage over competitors, with cause-related marketing campaigns often showing clear results. As a manufacturer of consumer brand products, Unilever is very alert to such opportunities, as Case Study 11 shows: Persil Colour Care achieved a 25% up-lift on sales during a joint promotion with Comic Relief. The cost was a 258,000 donation to the charity and an intensive advertising campaign (which also raised Comic Reliefs own profile). Another of Unilevers major brands, Flora margarine, sponsors the London Marathon: this now raises over 15 million for charity each year, while generating six million TV viewers and achieving 56% spontaneous awareness among the public for Floras association with the Marathon. Similar commercial benefits were achieved by another cause-related marketing case study: an extract from BTs WhizzKidz promotion (Case Study 15) shows a dramatic 25% uplift in mobile phones sales over a quarter for an input sponsorship cost of just 55,000. Extract from Case Study 15: BT Mobile
Run over a three month period, BT Mobile/Whizz Kidz was a cause-related marketing partnership where BT donated 4 for every new connection to BT Mobile by BTs business customers. The donated money was used towards the purchase of up to 20 specialist wheelchairs. Input costs Total sum donated 55,000 50,000 from BT Mobile / Community Partnership Programme, with a further 5,000 spent on promotional material. Business benefits Improved sales of Mobile phones for the quarter by 25%. Increased awareness within BT of the benefits of causerelated marketing activities. Achieved national press coverage of a million weighted opportunities to see. Used by Business in the Community in cause-related marketing case studies. Direct mail to 175,000 customers increased awareness of BTs role in the community.
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Making a point about social responsibility

Once awarded the contract to operate the National Lottery, Camelot does not face competition in the same ways as consumer brand companies. So its commercial initiatives are much less about market share and presence than helping to contain a social problem associated with managing the lottery, under-age play. Its concern is to minimise the problem and to demonstrate to its regulator and other key audiences that the company takes its social responsibilities seriously. Camelot has devised Project 16, an initiative with many component parts including help for its business partners (principally the retailers) to devise prevention strategies against children under 16 trying to buy lottery tickets. The summary below provides an extract from Case Study 12.
This is a multi-faceted project designed to control access to lottery tickets, at the point of sale by children under 16, the legal minimum age for the purchase of lottery tickets. It has been developed in conjunction with public authorities and charities concerned with the issue and implemented by retailers. Inputs Business benefits Management costs: Local authorities and trading standards support the 93,000 worth of time was devoted to initiatives as they have implications outside of National Lottery products. developing Project 16. Enhanced Camelots reputation within the local Project components included: community (local councils, the police, youth clubs) as a Working with the Gamcare charity, a socially responsible company, pro-active about its Dead Cert youth pack was developed responsibilities. to include educational materials for Camelots best practice is being reported in the media. young people. Funding for proof of age card developed Helped business minimise chances of being fined for with other agencies and industries for 12 breach of licence condition responsibilities. to 21 year olds. In addition, various materials produced for retailers including a refusal register, to help them record their interactions with young people which might gamble.
Note: In the LBG model, Camelot only counts the funding going to the community partners but to be effective the project required work directly with the retailers. Such activity is normally recorded under business basics. The case study demonstrates that how important some community projects are to the company and how closely they need to be run with the relevant line managers.
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Enhancing the companys reputation

Even for the largest national companies, community expenditures are tiny when compared with spending on marketing and other corporate activities, but they can have a symbolic value out of all proportion to the costs they incur. Community initiatives can demonstrate a level of concern and thoughtfulness about the wider community which speaks to the values and character of a business in a way that excellence in the business basics alone might not. People tend to attribute excellent business performance down to commercial self-interest and can be intrigued, delighted and challenged by community initiatives which expand their sense of the company and its values. Equally, if a company made huge donations each year, but engaged in dubious labour practices at home and abroad, sold unsafe products and polluted the environment, the community contribution is likely to be dismissed as a cosmetic on the unacceptable face of capitalism. But if the company is well regarded as a business, then community activities can help enhance its reputation still further. The next question is whether this reputation for good citizenship increases propensity to buy the companys products, attracts new recruits to work for it or helps obtain permission from regulators for key decisions such as the site of a new store or chemical plant. This is difficult to measure, but not impossible, and only a few companies have addressed in the detail required the relationship between a good reputation, clear business benefits and the precise role of community initiatives. The key is isolating the contribution of the community component to a corporate reputation generally, difficult but not impossible particularly for single brand name companies. The costs and timeframe required to achieve good data in this area of research are substantial and long-term. The LBG model is an excellent tool for assessing the contribution which individual components of a community programme can play in creating reputational and other benefits for the company. Some of these benefits can be aggregated, for example the number of column inches of favourable publicity generated. Generally speaking, however, if a company wants to know the impact of community programmes on its overall reputation, it must move from assessing individual projects, few of which will be big enough to have an impact except on highly focused audiences, and instead use opinion surveys and other techniques to assess overall attitudes. The following two case studies show how two companies have assessed the all-round impact of a community programme, the first by Whitbread in a small local community and the second by BP Amoco in an overseas market of growing importance.
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Whitbread: enhancing local reputation Whitbreads portacabin project in Salford (Case Study 8) is just one example of the many projects organised at a very local level. The companys community investment strategy focuses on local economic and social regeneration, support for the voluntary sector and volunteering, and education partnerships. Projects are by their nature local and have been concentrated on areas where the company has a strong trading presence. Whitbread has ceased to be predominantly a brewer and now operates a broadly based leisure business, with pubs, restaurants, hotels, drinks retailing and leisure clubs. A good reputation in specific local markets is an important competitive advantage, with customers and also with local regulators and community activists. To assess the impact on its reputation locally, Whitbread conducted research in 1997 among the general public in three localities, including the Manchester/Salford area where the portacabin project is located. Perceptions of reputation were assessed at three levels, first only mentioning the company name, then again after various brands and group companies were named, and finally after respondents were given details of the community investment programme. As the chart shows, public perceptions are found to be significantly enhanced, when they know about the community support offered. Chart: Perceptions of Whitbreads reputation: percent responding excellent or very good
80 70 60 50 40 30 20 10 0 Luton & Dunstable Manchester & Salford Cheltenham & Gloucester
Whitbread only After brands After brands and community
Base: 600 face-to-face street interviews with adult residents, quota controlled to be representative (200 in each area)
These findings substantiate the claim made in the Whitbread case study that the Salford Youth and Community Project, undertaken as a community investment initiative, produced as a business benefit enhanced reputation in the local community. The companys customers are local people living in local communities. Its pubs, restaurants, hotels and other facilities are part of their community and the companys community programme mirrors their concern for the well being of the community in which it does business.
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BP Amoco: shaping opinion former attitudes In the early 1990s, BP was the leading corporate giver in the UK in part because it was the countrys largest corporation. The community affairs department at BP, like most others, was largely headquarters-based and strongly focused on the UK as the home country. However the company was investing increasingly in emerging markets where it wanted to build a reputation as a good corporate citizen. In markets such as the UK and USA, long established patterns of giving continued, under constant pressure of requests for support from government agencies and non-profits. But the days of giving away money were over because of a sharp decline in profitability, which was restored only by a radical re-focussing of business effort and priorities. (BP changed its name to BP Amoco in 1998 following the merger.) Changing funding priorities These factors and others combined to change BPs community funding pattern between 1990 and 1993 in an effort to strengthen the companys general reputation as a good citizen in key emerging markets especially in Asia and Latin America. At the same time, the company tried to measure the impact of the funding changes to show evidence that community programmes do add value to a companys reputation in distinct national markets. As Table 1 shows, in 1989 BPs spending on community programmes was heavily biased towards the UK as the home country and against the rest of the world (excluding USA and Europe) when compared to the underlying business using indicators such as profits earned. Table 1: UK -v- the rest of the world - 1989 BP business indicators and community spending
Business indicator Profits Fixed assets Employees Community spending UK as % total BP 19 35 25 50 RoW as % total BP 19 10 16 17
In rebalancing funding patterns, the proportion of community funding in Europe outside the UK and in the USA remained basically unchanged from the 1989 position, as it was thought to be broadly appropriate for both business and community needs. However, a determined effort was made to grow community activity in countries such as Malaysia, for example, where BP Chemicals was investing in major new facilities and the social and environmental problems very evident. Over a three year period funding in the UK was cut back as the business was restructured while, as Table 2 shows, the creative initiative in community relations was transferred to emerging markets. Table 2: UK -v- the rest of the world - 1993 BP business indicators and community spending
Business indicator Profits Fixed assets Employees Community spending UK as % BP total 24 38 26 39 RoW as % BP total 18 12 17 26
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Measuring the impact on reputation The change in community spending priorities described above was not wholly an act of faith that it would feed through to a better reputation. The community affairs department had no budget itself to do baseline studies and measure the attitudinal changes amongst opinion formers that might arise from increased and better focused community activity in their countries. However, it worked with colleagues responsible for monitoring corporate reputation generally. Extracts from this survey are presented in Table 3 below. This contrasts BPs corporate image among business leaders as opinion formers in the UK, where the company was reducing its commitment to community involvement, with the emerging markets of Singapore and Malaysia. Success came in Malaysia and Singapore, where an energetic public affairs manager was empowered and supported from the centre to engage in some new, mainly educational and environmental, community projects. His effort saw the companys image improve as a good corporate citizen with the business leaders surveyed. There may well have been other changes besides a new approach to community involvement activity in these countries. Certainly a strategy for better communication of the community programmes was introduced. Taken in the round, it is reasonable to assume that the new emphasis on community programmes did influence how business leaders perceived the companys commitment to corporate responsibility. The question asked in the survey was about social responsibilities which is a broader concept than community involvement. However, in many countries the terms are broadly synonymous, as both opinion leaders and the general public tend to view a companys good works as being indicative of its values and character. Table 3: BPs corporate image - Views of the business community (as opinion leaders). The question asked: Take its social responsibility seriously?
Country UK Singapore Malaysia BP % 1990 30 16 9 1993 20 25 24
Source: MORI International Corporate Tracking survey for BP Table 3 shows a significant drop of ten percentage points between 1990 and 1993 in how business leaders in the UK viewed BPs sense of social responsibility. This mirrors closely the drop of eleven percentage points in total funding being allocated to UK projects. Some very high profile arts activities, for example, were discontinued and opinion formers often rate these much more highly than the general public. BPs community affairs function at the time could have probably done more to manage down expectations than they did, but attention was primarily on the emerging global markets and the department itself had been reduced and reorganised as part of the general changes in company management structure.
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Section 8. Impact assessment
Section 8 - Impact assessment

Introduction
Few companies have yet been able to assess the long term impact of major projects within their overall programmes. Sometimes record keeping is not adequate and often projects have simply not lasted long enough for the results to show through. Nonetheless impact is the Holy Grail: today few companies can commit major resources if the long-term community and business impacts are not clearly identified. By impact, we mean clear, measurable changes in the social issue being addressed, measured in terms of the well-being of intended beneficiaries. We mean bottom-line benefit to the business, i.e. measurable commercial gain. We do not mean lists of activities undertaken nor steps along the way to the ultimate goal. The starting point for impact assessment is right at the beginning, when defining the projects purpose and ultimate goal. Sometimes you need to push beyond the stated objective. For example, companies often say one reason for the funding a community programme is to enhance corporate reputation. But the mission of the company is not to enjoy a strong reputation; that is only a necessary step along the way to the ultimate goal of sustainable commercial success. That is why we define business impact as bottom-line benefit. In this section, two companies present projects which have been running for four or more years and are starting to show long term impact, both in the community and on the business. The detailed case studies in the Section 16 Case studies also include short accounts of impact, in most case still be sought, but see in particular Case Studies 5 (SmithKline Beecham), 7 (Whitbread) and 12 (United Utilities).
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NatWest: Face 2 Face with Finance

Financial literacy for schools (1994 - 1999)
Inputs
Outputs
Leverage Community benefits Nearly 150,000 students participated in 2,400 schools Business benefits Improved corporate reputation Enhanced staff skills Input to marketing Employee volunteers (4,000 involved) Teacher input
Set-up cost: 2m Annual running cost: 0.5m Staff time
Impact
Community Evaluated impact on financial literacy skills Business New business generated
Project description NatWest Face 2 Face with Finance is a programme of active learning activities to teach financial literacy within the curriculum, offered to all secondary schools in England and Wales. NatWest staff work in partnership with teachers to plan and deliver the programme. NatWest Face 2 Face with Finance comprises ten separate modules which can stand alone or be used in conjunction with others. The modules include: learning modules to help students understand about banking and financial services, such as basic banking and credit cards activity based models teaching skills through real life examples such as setting up an enterprise, letting a tender and assessing credit worthiness; actual practical experience, both a two week placement for students in the company workplace and flexible placements for teachers. Each module is supported by a handbook for use by trained NatWest staff members and school teachers, including all the necessary case study materials. Inputs The programme underwent a two year development phase which included research, writing, printing materials, and running and evaluating four regional pilots: set-up costs approximately 2 million Annual running costs from 1994 include print and publication, materials, research, ongoing evaluation and database management at NatWest Financial Literacy Centre, Warwick University: cost 500,000 cash payment Time costs: Central management costs (one employee located in the marketing unit)
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Nine part-time regional co-ordinators Employees delivering the programme in schools during working hours: more than 4,000 staff have been involved since September 1994 (no estimate made of cost to company) Outputs - Leverage NatWest staff plan and prepare for lessons in their own time and often become involved at the school on an ongoing basis Sometimes teachers get involved in helping deliver the Face 2 Face programme. Outputs - Community benefits Free curriculum resources with NatWest staff to help plan and run the activities and a freephone telephone helpline for all schools. Output statistics from September 1994 to April 1999 are: 4,076 NatWest staff have helped with planning and delivery 146,374 students taken part 8,165 activities run 2,398 schools benefited across UK Outputs - Business benefits Positive press coverage generated for NatWest from Face 2 Face, worth 2 million a year in equivalent advertising cost. Research among important opinion leader audiences shows Face 2 Face contributes to NatWests positive reputation. Research with staff and their line managers shows improvement in competencies and workplace performance through the programme (random sample of participants surveyed in 1997): staff report a 17% increase in proficiency as a result of skills developed through the programme; their line managers agree proficiency improved, but at a slightly lower level of 14%; skills most enhanced include communication, planning and implementation, all previously identified as critical for the business. The programme has increased knowledge and awareness within NatWest about young people has been used in preparation for development of new youth market products and marketing.
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Impacts The National Foundation for Educational Research conducted evaluation of 2,000 students over three years. This found that Face 2 Face has a positive impact on pupil learning/financial literacy. Research covered three cohorts, assessing the position before participation, soon after participation and one year later. NFER reported the average scores of all three cohorts increased significantly after participation in Face 2 Face. The increase was 3.0 percentage points for Cohort 1, 4.9 for cohort 2 and 3.6 for Cohort 3 There was a tendency for girls to obtain higher scores for conceptual skills, and boys for computational, but these differences were not always significant. Qualitative and quantitative surveys, interviews and focus groups with teachers show that teachers like the programme and rate the materials highly. The survey of line managers found nearly three quarters (71%) report a business benefit from their employees participation. Although not a specific objective, anecdotal evidence shows NatWest gaining new business through the programme. The survey of managers found more than one in four (27%) reporting that new business is generated. For the longer term, the UK government has announced that it is integrating financial literacy as a formal part of the curriculum and NatWest is confident that its programme played an important role in persuading educationalists and others of the benefits of treating financial literacy seriously.
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IBMs Reinventing Education

To raise education attainment in schools using IT as a tool for systemic reform
Inputs
Outputs
Leverage Community benefits Totally new technology applications to increase standards and enhance pupils skills for the information society Business benefits Enhanced reputation. Media coverage and used in advertising campaign. Employee involvement and skills development. $100 million in partner agency contributions
$35 million in IBM resources since 1994
Impact
Community Improved student attendance and performance. Changed teacher attitudes and school management. Business New products developed for commercial sale.
Project description IBMs Reinventing Education programme aims to raise education attainment in schools using IT as a tool for systemic reform. The programme responds to the need for school systems to enable all children to achieve higher standards and appropriate skills for the information society. It is delivered in partnership with national or local government or administrations responsible for public education, based on commitment from the partner to systemic reform. The issues addressed through the programme are identified by the partners as ones where they have existing plans to implement change that could be assisted by technology. In each area, IBM works with the partner to develop new methodologies integrating technology. These include: home-school links - increasing parental involvement in their childs education through actions such as access to information on school activities and curriculum, and private conferences with teachers; authentic student assessment - a digitised system to provide students with feedback based on benchmarked work; teacher professional development - enabling teachers to use IT to collaborate in planning and delivery of learning, and to integrate the use of the Internet and multimedia in the classroom; early reading skills - use of voice recognition technology; management information systems - use of data warehousing to enable comparative analysis of data on resources and performance;
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integrated maths and science teaching - using multi-media as a vehicle for developing learning materials. The programme started in the USA in 1994, through a request for proposals. A second phase launched in 1997 took the most promising solutions from phase one and invited new partners to extend their application. There are currently 21 sites in the USA and five international sites, including three in Europe (Italy, Ireland and the UK). Inputs IBM Community Relations: $40 million for research and development, consultancy and project management, hardware, software and cash (approximately 15% of the total) external programme evaluation; senior staff time (including CEO) for programme development, research, management, and promotion. Outputs leverage partner contributions to funding Reinventing Education programmes are estimated at twoto-one and include staff time for development, programme management; technology infrastructure; cash; volunteers in their own time- as IT trainers, on-line mentors, technical support from IBM and other businesses; and parents; The technology solution developed initially for home-school liaison has been adapted for wider education purposes (curriculum planning, team projects, sharing effective practices etc) and introduced to multiple Reinventing Education sites; Investment by partners to extend programmes following development phase: e.g. Broward County in Florida, USA has extended data warehouse system to every school in the district; in West Virginia, USA further resources have been invested for curriculum development using the Internet for three additional subjects following the completion of maths learning materials. Outputs Community benefits Technology provision - through networks, hardware and software have been upgraded at all sites. A community has been created for transferring experience and expertise to raise standards in schools on an international basis. Information on the programme including evaluation reports is available on a world-wide basis on the Internet. Through the partnership nature of the programme, policy makers have been assisted to implement and extend their strategies for: raising standards in schools; implementing ICT; and modernising the management of education services. Tangible experience from the Reinventing Education programme has contributed to the programmes of national and international organisations concerned with raising education attainment - ACHIEVE in the USA and EUN Schoolnet in Europe. Parents have developed new IT skills and have better information to support their childrens education.
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Through the mentor programme, businesses have a structured programme for engagement with the education sector. A case study to demonstrate change management in the public sector has been developed for the MBA curriculum at Harvard Business School.
Outputs Business benefits Enhanced reputation for business leadership reinforced through article in Harvard Business Review citing the Reinventing Education programme as a leading example of new strategic approach to CSR delivering systemic change. The programme has won four awards in the USA: The Conference Board Best in Class 1999; Council for Aid to Education Leaders for Change Award 1998; E-School News Empowerment Award 1998; The Council on Economic Priorities - Rating 250 American Corporations Highest rating in category for Socially Responsible Investor. Two of the technologies developed through the programme have been adapted for the marketplace - the set of tools developed for school collaboration and the data warehouse system. Media coverage of IBMs corporate community relations programme has increased by 90% in 1998-99. The programme has been used in an advertising campaign promoting IBM as a thought leader. Closer links established with government through the partnerships, and ability to attract senior political figures to conferences on education and IT strategies. IBM Project Managers have gained new knowledge of the education marketplace. Impacts The programme is being evaluated by the Center for Children and Technology in the USA on a continuing basis. The programme has initiated entirely new methods and the development of technology solutions involving research, which have necessarily required a lengthy development period. Evidence of improved student performance are now emerging from the evaluation, along with other indicators of changes to teacher practices and the school system, evidenced through programme roll-out on a generalised basis following development phase, and adoption at other sites. Impact on student achievement the preliminary evaluation published in February 1997 identified improvements in attendance, some student performance, teacher attitudes towards technology and parental involvement; results from the partnership in West Virginia (December 1999) show that in standard maths tests, students who were high users of the instructional material developed through Reinventing Education scored significantly higher compared with those who were low/non users of the material; increased competence in use of IT and Internet.
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Change to teacher practices increased team-working e.g. collaborative approach to lesson planning adopted at all sites; increased focus on students critical thinking skills and use of acquired prior learning in teaching methodology. Change to management of education systems new methodologies have been adopted across all Reinventing Education sites all have included teacher professional development; five sites are focusing on student assessment and three on information management; reallocation of budgets to IT resources, including new roles identified for IT management. Adoption in the schools marketplace the set of collaborative tools, and the data warehouse system developed through the programme, have been marketed by IBM from 1999.
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Section 9. Reporting the community contribution
Section 9 - Reporting the community contribution

Introduction
The LBG model started life as a management tool, helping community affairs professionals to record and evaluate both the cost and the outcome of their programmes. Rapidly companies found it also offers powerful advantages in reporting to internal and external audiences. Previously, community reports were typically limited to a statement of the total cash given to charities as the legal minimum required for the Annual Report, or a simple listing of projects supported, sometimes illustrated by photos. One gained little sense of a strategic purpose, still less of achievement, so it is small wonder that the charity department was often viewed purely as a cost or more cynically as an agent for the chairmans whim. Thankfully that is rapidly changing. Today in most countries the United States perhaps being the most significant exception pure corporate philanthropy plays only a small part in a dynamic mix of activities which now constitutes companies engagement in and reporting to society.
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Using the LBG model to report

The full LBG model, covering both input and output sides of community involvement, offers companies a way to put reporting on a sound footing. In particular, it brings greater transparency to relations with stakeholders. Unlike other possible measurement models, it puts centre-stage the companys motivation for making the community contribution, so countering popular and deep-seated misconceptions about why profitmaking entities might give away money. It also allows non-profit partners to make appropriate approaches to the company for support. The case study from ActionAid in Section 6 Measuring community benefit, demonstrates clearly how charities benefit from the structured approach. Again, unlike other models, the LBG model moves the debate on from the input contribution to ask what is actually achieved after all, community benefit should be the true measure of success, but all too frequently the focus remains (even in the companys own reporting) only on the size of the contribution. In an era of growing scepticism of companies and the powerful role they can play in society, effective corporate communication needs to be based on why the company is involved, illustrated by hard evidence of the impact being made. The LBG model also offers several other important benefits when a company is considering reporting to its stakeholders. In particular: applying a clear set of principles about what is (and is not) CCI allows consistency and comparability between companies and over time; putting a full and fair monetary value on in-kind contributions, such as staff time and product donations, as well as cash, helps identify the true contribution; clarifying what the company contributes, and what employees, governments, customers and other funders offer (leverage), avoid any dangers of claiming undue credit.
Section 3: The model in detail - applying the input model, touched on reporting in its consideration of the input side of the model. It recommended analysing the total contribution between: why the contribution is being made (the LBG categories of charitable gifts, community investment and commercial initiatives in the community); what the resources are spent on education, the environment, the arts etc; how the contribution is made cash, time, in-kind (and for the purposes of accounting, the management costs associated with the contribution); where (as appropriate a global split or regional breakdown).
This is illustrated in the case study cited below, from Diageo.
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Examples of reporting
Increasingly companies are using LBG principles to determine the total cost of their community contribution and then saying so in their published reports. Often, they use the distinctive pyramid which has become something of a trademark, signifying the integrity of the approach adopted. The 18 companies in this project have taken a lead, supported by others, such as the Scottish Benchmarking Group. The trend is accelerating: a simple telephone survey conducted for this study during 1999 among a sample of FTSE100 companies found nearly half either using or intending to adopt the LBG model as their basis for valuation. So far, comparatively few have been in a position to use the model to report the outputs and impacts of their community programmes. BT was one of the early examples, using a matrix in its 1997 community report with more than ten different projects to illustrate the leverage, community benefit and business benefit they achieved. Another example is Diageo, with a comparable matrix using 1999 data cited below. SmithKline Beecham, in its community partnership report published in 2000, used the input/output model to explain in detail several of its flagship projects. A further development is the use of the model in the new style social reports which attempt to present a picture of total impact on society. Following the trend to quantitative evaluation set by earlier environmental reports, these need a measurement methodology based on assessing performance against strategic objectives and on demonstrating a systematic approach. The LBG model provides this for the community stakeholder, and companies as diverse as BP Amoco, BT, ScottishPower, Telecom Italia and United Utilities have already used it to good effect.
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Case study: Diageo

Diageo was formed from the merger of Grand Metropolitan and Guinness in 1998, GrandMet having been a founder member of the London Benchmarking Group. In the year to June 30, 1999, the companys total worldwide community contribution was 18.3 million, excluding management costs. As a practical introduction to how companies are using the LBG model to manage and report their CCI, below we present two examples from Diageo: an analysis of its worldwide community contribution (the input cost), using the LBG model to answer the question why do we make the contribution; alongside information on where the contribution is made, how it is funded and what it is spent on, this helps audiences make complete sense of CCI activity; a chart showing the input/output analysis for selected projects: these show the benefits both the company and the community are obtaining given the amount of contribution and the additional leverage obtained, so helping internal and external audiences to judge what the project is achieving and whether it is an effective use of resources. WHY? LBG categories
3.14
4.45
Charitable donations Community investment Commercial initiatives

10.67
WHERE? Geographic allocation

1.44 United Kingdom 7.31 Rest of Europe North America Rest of World 1.7
7.81
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HOW? Source of funds and other resources
1.69
3.26
Diageo Foundation Pilsbury Foundation 2.92 Hublein Foundation Direct corporate t ib ti
10.06
0.33
WHAT? Subject analysis

12 4 24 Local Citizens Our People Water of Life 18 5 6 Skills for Life Medical Trade Related Other 31
Extract from Diageo: Global Brands, Local Citizens
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Brief examples of assessing CCI projects input/output analysis

Input Diageo example Cash value 1. Charitable gifts Hurricane Relief $10,000 in Latin America UDV/Burger King Outputs Leverage Employee and franchisee volunteering Community benefit Supported humanitarian relief efforts Business benefits Brought together UDV and Burger King people in Latin America with common purpose Enhanced morale, teamwork, creativity, pride in company, community and diversity awareness
Employee $25,000 Volunteering: Pillsbury REACH and Golden Ambassadors 2. Social investment Burger $100,000 King/McLamore from Diageo Foundation Foundation
1,200 volunteers / 11,000 hours supported by Pillsbury
Over 200 community projects received direct help
$3 million from BKC and Business Partners External agency funding
Provided over 260 annual scholarships for educational opportunities to deserving youth Approximately 200,000 people in developing countries have access to clean water for the first time.
Water of Life Guinness/UDV
Tomorrows People Burger King/UDV
Has helped over 300,000 young and unemployed people to work for over 15 years. Added value to UK economy over 150million (tax paid less welfare costs) 3. Commercially led initiatives with direct community benefits Social $80,000 for Matched Has given over 150 Sponsorship: three years external Russian authors and their Smirnoff Russia funding of works access to Booker Prize $80,000 international recognition Cause Related $1.6 million $130 million The proceeds of $100 Marketing: each year has been million have helped many Tanqueray raised in HIV/AIDS charities American AIDS fundraising Rides
50,000 per project over three years Annual budget 300,000 500,000 each year
Cemented unity of purpose and culture between company, employees and business partners Enhanced reputation and government relations.
Levers 3 million external funding
Corporate reputation in UK and direct support to our businesses on Welfare to Work and plant closure programmes Promotion of Smirnoff brand and government relations and new audiences Increased Tanqueray media exposure
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Section 10. The management challenge
Section 10 - The management challenge

Introduction
We started by saying that this book is based on the existing experiences of companies in evaluating the outputs and impacts of their community programmes, and as such is by no means the last word on the subject. We end here by looking forward to the challenges we believe companies are going to face, as they increasingly adopt a systematic and performance driven approach. Some of the evaluation techniques can be fairly easily added to the existing day-to-day management of individual community affairs departments. Others will require further development, some experimentation and much learning from experience, best achieved through a group of companies continuing to work together. Valuing the contribution to the business We have stressed that the LBG model is a tool for the improved management of corporate community involvement. In a highly competitive economy, every part of the business - the community affairs function included - needs to know as precisely as possible its contribution to overall commercial success. The LBG model provides guidelines about collecting data on the cost of the community affairs function to the business. In Section 5 Assessing leverage, we showed how the additional resources attracted to the community as a result of the companys efforts can be totalled and the leverage achieved thereby demonstrated. In subsequent chapters, we suggested that at least some of the community and business benefits can be aggregated too, focusing on just a few indicators and assessing all the individual projects. Some companies have started to do this, and we believe more will follow. BP now reports a rough estimate of the total number of community organisations it works with worldwide (over 2,000) and the total number of individuals affected by its programmes (over 40 million). Other companies have calculated the totality of media coverage that their programmes generate as a business benefit. Much more can be done to assess the big elements of business benefits; examples include calculating the saving on landfill tax that large community-based recycling schemes can generate and savings on employee healthcare costs in developing countries through community-based preventive initiatives on HIV/AIDS. Once progress is made towards assessing the total business benefit, the way is open for a full cost/benefit analysis of the community affairs function. For companies with full time community affairs departments, that means looking at the running costs of the department (salary, overheads, etc) and at contribution budgets, and comparing those with the total benefits that they bring to the business. At a time of relentless downward pressure on costs and headcount, we believe professional community affairs staff should take the lead in demonstrating their effectiveness.
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Building a common language The LBG model has created a common language for discussing and particularly valuing the community contribution across all business units, not just the specialist community affairs department. Often for the first time, community affairs professionals and line managers can now see their community involvement in the same framework of analysis. This has a big impact on the quality of data and knowledge about what is going on. When BT first applied the model, for example, its reported contribution figure increased from 15.6 million to 27.6 million. For the first time, it was able to publish a more comprehensive account of what the company as a whole is doing for the community, not just the corporate community function. Other companies in the UK are now investing resources in communicating this common language across the business, using face-to-face meetings with colleagues, regular questionnaires and other techniques. The bigger challenge is for international companies to extend the process to the various group businesses operating in as many as 120 countries around the world. Companies such as BP Amoco, Unilever, Diageo and SmithKline Beecham are making good progress, despite the wide cultural differences in a multiplicity of countries. Meeting this challenge successfully gives companies the ability to assess their global contribution to society, having got the inputs side of the equation right. Then the task is to move on to assessing outputs and impacts. On both sides of the equation, there is tremendous scope for sharing best practice and exchanging experiences. Developing a pro-active management style For most companies, the LBG model is still primarily a system for organising and collecting data. However once a common understanding and language about the inputs to and outputs and impacts from community involvement are established, the model offers a powerful tool for the proactive management of the programme. The models component parts allow companies to maximise the three Es - economy, efficiency and effectiveness: better data on the full input cost of the community contribution allow a judgement about appropriate and economical levels of spend, when benchmarked with other companies and between operating units of the same company (economy); better data on the immediate output (such as the number of pupils helped through the education programmes or employees trained through community assignments) allow a judgement about how efficient the programme is, given the level of input resources (efficiency); better data on the longer term impact of the community programme allow a judgement about the overall success of the programme in achieving its objectives and goals, both for the company and the community (effectiveness ).
The challenge here is for community affairs managers and their business colleagues to review existing and especially new community initiatives, using the LBG model for scenario planning against economy, efficiency and effectiveness. That will also equip
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companies to engage constructively with non-profits who, our researches have found, are increasingly keen to structure proposals around inputs, outputs and impacts. Developing a research agenda It is no exaggeration to say that the whole field of corporate community involvement is chronically under-researched. Much activity can only be described as do gooding because there is no verification that it achieves anything more. The six companies in the LBG reviewed their research spending as a percentage of programme cost and no company spent more than IBMs 1.5%. That figure was the highest because the company had commissioned a one-off study from the Rowntree Foundation to review the value of its programmes from the non-profit sectors perspective. Both IBM and NatWest are cited in Section 8 Impact assessment in part because they have invested in systematic research for long enough to yield adequate data. Other companies in the group are moving in this direction but generally speaking community affairs staff do not have adequate research budgets. The pragmatic response to this problem so far has been three fold: to set aside a proportion of grant funding for research and measurement work on community benefit; to piggy back on research being done by line managers in other parts of the business, for example on how customers view community involvement priorities; to pool research funds with other companies, as in the case of this project, to get work done which is of generic interest.
Reporting One of the major drivers behind the Getting the Measure project was the desire to improve the quality of reporting. As we have seen, the inputs side of the LBG model enables companies to communicate why they make the contribution (the LBG categories by motivation), as well as how they give (cash, time and in-kind), where they give (by geographical areas) and what they give for (the subject focus such as education and the environment). The challenge now is to move towards reporting what community programmes actually achieve, by moving from inputs to output and impact analysis. Companies such as Diageo, BT and SmithKline Beecham are leading the way with using the full model in reporting on their community programmes publicly. However the demand for increased corporate accountability is growing louder, with employees, customers, investors, governments and business partners looking at the wider agenda of the whole social, environmental and economic impact. Companies in the group such as BP Amoco, BT, Camelot, Centrica, NatWest, Railtrack and United Utilities have all moved towards such social reporting.
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Towards benchmarking outputs and impact The work of this project to date shows that more work still needs to be done on refining the distinctions between outputs and impacts, and much more experience gained in applying measures of performance. The case studies, especially those in Section 8 Impact assessment, and SmithKline Beechams Bosnia project (Case Study 6) show that companies, non-profits and public sector agencies are already working on improving impact assessment. As greater coherence and agreement on specific measures emerge, we believe the LBG model can be used in a very powerful way, that is to benchmark outputs and eventually impacts, not just inputs. It was beyond the scope of the Getting the Measure project to tackle this. But it is clear that such benchmarking is the next logical step, one that can make a major contribution to improving the efficiency and effectiveness of community programmes. This benchmarking can take place at four levels: comparing one company project with another within the same company, perhaps looking at different divisions or countries; comparing individual projects or a whole community programme with those of other companies, looking at best in class and competitors; comparing the effectiveness of company-led efforts to tackle social issues with those in the public and not-for-profit sectors: programmes such as NatWest Face 2 Face with Finance and Diageos Tomorrows People Trust bring a distinctive corporate perspective to the issues of financial literacy and skills respectively and these should be achieving real value-added; comparing genuine three-way partnership projects with more traditional single sector approaches (much is asserted these days about their effectiveness in addressing intractable social issues but little has been done to quantify the value-added): too often companies are drawn into projects to plug a funding deficit, not for their unique contribution, and the reality is that working in partnerships can cost more and take longer; benchmarking could reveal if that is worth the effort. This section has been about challenges for the future. We believe corporate community involvement is here to stay and the work of the original six companies in the LBG and now the follow-on project has been about putting CCI on a firmer foundation. There remains much to do but the foundation is strong and can be built on to good effect by others. We commend the approach to you.
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Section 11. Measures and indicators
Section 11 - Measures and indicators

In this section, we have pulled together and cited the measures and indicators for business and community benefit used by the companies in their examples of LBG output evaluation. As a specific illustration of how it is possible to set clear objectives for projects in the community and then measure success, we present a detailed case study from Unilever (the Flora London Marathon).
Examples of community benefit and measures used by projects supported by companies cited in this book
Schools and young people numbers of young people educated and trained numbers of young people given work experience quantity of educational materials produced numbers of schools participating in business partnership evaluation of change in culture in school impact on educational attainment in required subjects and skills numbers and time with children on reading practical resources provided to young people in need eg youth club facilities information distributed to young people about dangers of product abuse increased take-up of information packs about preventing under-age sales increase rates of refusal to sell to under-age Other community benefits numbers gaining access to clean water, and consequent reduction in waterrelated illnesses children with a disability helped respite care offered for families with children with a disability reduction in crime and vandalism in the local area enhanced community spirit numbers of local residents getting involved in community activities and managing local community centres encouraging sport and participation by young people numbers of new businesses receiving start-up finance jobs created in new businesses Practical help for charities themselves cash raised for charity reduced costs/savings by charity raised profile of charity in media and public numbers of volunteers with professional skills and time served on management committees numbers of volunteers and time spent running events
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Examples of business benefit and measures

Listed below under three broad headings are examples of the types of business benefit and the measures cited in this book as used by the companies applying the LBG model. Attitude and reputation enhanced reputation among community, employees, opinion formers, schools, education service, young people, local councils proportion of key audiences saying that the company is meeting its social responsibilities spontaneous recall rates of company as an active citizen national and local media coverage weighted opportunities to see; column inches external awards received by company from government and charities Employees enhanced attractiveness to new recruits team building among employees from same section bringing together of employees from different parts of the group opportunities to develop leadership skills proportion enhancing skills, eg problem solving, creative planning, running meetings increase in confidence expressed by staff higher staff retention rates enhanced employee motivation enhanced pride in the company proportion of employee volunteers who enjoyed their community experience proportion of staff saying company treats its social responsibilities seriously Sales, cost reduction and other business benefits brand image strengthened raised awareness of new product variation sales increased cost saving on landfill promoted water saving message, so meeting regulatory targets better links with suppliers through joint community projects reduced risks of fines for breach of licence conditions concerning under-age sales
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Flora London Marathon

This case study from Unilever shows how a company can set clear community and business objectives for a major community sponsorship and use measures to assess both types of benefits. For the 1999 race, Unilever set six objectives and the table below gives examples of the measures used to evaluate each one. Project description The London marathon is a huge annual sporting and community occasion which has raised over 100 million for numerous charities since the first race in 1981. Initially only 8,000 entered to run the 26.2 mile event, now more than 40,000 take part. Each year two official charities are nominated by the event to benefit from their association and since Floras involvement began in 1996, these have included the British Heart Foundation, Leukaemia Research and the childrens charity, WhizzKidz. The 1999 race raised a record 15 million for charity. Sponsorship as a business opportunity The London Marathon is an ideal vehicle to enable Flora to promote its brand messages by making the relevant link between the health benefits of Flora and taking exercise as an important part of this healthy lifestyle. Community budgets contributed 1million to the projectss total costs, with commercial budgets adding considerably more. The projects business success is based on continuous research which drives the formulation of objectives, planning and execution of the event. It is an excellent example of how a community event can achieve commercial objectives and wider leverage. The follow table summarises how commercial objectives can be set, with the results carefully measured. It is based on the 1999 race which was the fourth year of Floras sponsorship. A particular issue was to increase the rate of spontaneous public awareness of Floras involvement, compared to previous sponsors, notably Mars.
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Business objectives set Awareness Continue to build Floras association with the event with an aim of maintaining spontaneous awareness at 56% whilst aiming to increase BBC TV viewing figures Longevity Leverage association outside race week Impact Optimise brand impact on course Internal buy-in Increase group and internal involvement
Results achieved Spontaneous awareness held firm at 56% in race week (versus 40% in 1997) and remained 53% one month after the event. Awareness of Mars dropped from 20% to 6% in the same period. BBC TV viewing figures on race day peaked at 6 million.
Press and TV coverage extended consistently across a six-month period spanning many sectors of the media including general news, health and lifestyle features, sports press, Panorama, a BBC religious broadcast (First Light) and even The Weather Programme. Total branded TV increased to almost 2 hours of clear Flora sightings, representing almost half of the race day coverage. The course branding has now reached the point where virtual saturation has been achieved. Internal entries for the event were greatly over subscribed. Van den Bergh Foods runners included the company chairman and a team from their Dutch headquarters. Important Flora National Accounts including retailers Sainsburys, Asda, Somerfield and Tesco entered teams. More than 50 pubs lining the course were designated as official entertainment sites. Spectators given goody packs including supporters boards, balloons, rattles and t-shirts. Bands and entertainers were strategically positioned at quieter locations on the route to motivate and encourage flagging runners. In 1999, almost 100,000 applied to run, a record 41,500 were accepted, and over 30,000 runners completed the race.
Sense of occasion Improve the live experience for spectators and participants Stage the best London marathon yet
Floras sponsorship of the London Marathon has been rewarded with a number of industry awards including the Hollis Award for Best Sports Sponsorship (1997) and the Institute of Sports Sponsorship award for Best Televised Event (1998). Leveraging wider involvement The charity connection is a central part of the success of the whole event in commercial terms. While TV coverage is the biggest single benefit, other marketing and involvement activities are undertaken. One example is cause-related marketing, working with one of the official charities each year to develop marketing initiatives around the event. In 1997, an on-pack offer was run with the British Heart Foundation, with customers collecting Flora tub lids towards the price of a toy race rabbit and profit
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from sales went to the charity. The BHF logo appeared on millions of Flora tubs during the campaign. In 1998, 500 runners of all abilities were recruited into Team Flora to run and raise funds for the Diana Princess of Wales Memorial Fund. An on-pack thanks promotion raised awareness with the foil leaf inside the tub profiling individual runners, such as landmine amputee, Chris Moon. In 1999, Flora teamed up with the childrens wheelchair charity, WhizzKidz, with activities such as generating media coverage around the regions via a roadshow. In addition, Unilevers employees get involved. Examples include: a Van den Bergh team of over 300 runners each year; in 1999, they included the company chairman and a group from the Dutch headquarters; regular internal staff updates and newsletters, with training and nutrition tips; branding the Van den Bergh office headquarters in Crawley with a finish tape enveloping the outside of the building; at least 200 other employees helping on the day at hospitality and around the course.
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Section 12. Links with other measurement models
Section 12 - Links with other measurement models

Introduction
In parallel with the work of the LBG, many attempts are being made around the world to devise ways to assess corporate community involvement programmes. Some are simply codes of practice and statements of key principles highlighting perceived good practice in community involvement. Others go further and allow evaluation (sometimes with a numerical scoring system) of the extent to which these principles are being achieved. In general, these efforts respond to the growing expectation externally that companies give a robust and detailed account of how they contribute to society. Somewhat in contrast, one of the main focuses of the LBG model is as an internal management tool, enabling a great knowledge of what is being undertaken and why, leading to better use of available resources. Companies which have applied the model, however, find that the existence of better data internally assists and improves external reporting. In this chapter, we concentrate on the main evaluation models in use or being developed which go beyond simple statements of best practice, introducing at least an element of numerical assessment.
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Input cost assessment

The Per Cent Club started as a loose affiliation of major companies in the UK committed to making a fitting contribution to the community, coordinated through Business in the Community (http://www.bitc.org.uk). It now primarily offers a benchmark standard for inputs to corporate community programmes. Its millennium standard is for companies to contribute at least one per cent of pre-tax profits, doubling the original standard set at the Clubs launch in 1986 when the focus was on charitable donations. Reflecting the very considerable changes in the approach by most large companies to community involvement since then, the rules governing what can be counted towards the target are wholly aligned with the LBG approach. The LBG total community contribution (the input cost), including management costs and the community elements of commercial initiatives such as cause-related marketing, can be submitted to the Clubs annual reporting process. The descriptive paragraph in the report also allows companies adopting the LBG model to go further and comment on what that contribution has actually achieved.
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Quality and excellence models

One of the most influential models is the European Foundation for Quality Management business excellence model (http://www.efqm.org), which is also the basis of the approach adopted by the British Quality Foundation. This subjects the operations and resources of a company to a rigorous and thoroughgoing selfassessment and external audit, examining nine elements of performance including impact on society. Issues of corporate citizenship and CCI can contribute not just in this specific area, but also to employee and customer satisfaction, as well as process issues such as policy and strategy and people management. An important part of assessment is based on demonstrating trends and benchmarks, so the London Benchmarking Group models focus on measurement of all resources deployed and results achieved is particularly helpful. It also helps indirectly through the clarity and rigour that it brings to the processes and management of corporate community programmes. The Business in the Community Principles of Corporate Community Investment (http://www.theprinciples.org.uk) are aligned to the European Foundation for Quality Management Model, mirroring the nine principles. During 1999, the principles were revised and updated to simplify their use as an evaluation tool, with a simple selfassessment procedure available on-line. Using the London Benchmarking Group Model will enable a company to answer better and more easily the questions relating to principles which concern inputs and processes. They will be similarly helpful with regard to BITCs three principles which concentrate on outputs. Bruce Naughton Wade (http://www.bnw.co.uk), a London-based consultancy, has developed a Corporate Community Involvement Index to assess performance in six component areas strategic rationale, management, activities, communications, measurement and outcomes. The London Benchmarking Group Model is of particular help in the measurement and outcomes indices. Companies which have been assessed report that the mapping involved in measuring a programme through the LBG model considerably strengthens their ability to answer the questions posed by the Index.
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International models
In the United States, Boston College Center for Corporate Community Relations (http://www.bc.edu) originated a set of Standards of Excellence in Community Relations ahead of similar developments in the UK, and these were substantially updated in early 2000. The standards are a set of management practices, processes and policies that identify the principles upon which community relations practice should be based. They are not therefore primarily concerned with the measurement of inputs, outputs and impacts but once again the London Benchmarking Group Model is helpful both in terms of providing verifiable evidence and in leading companies to go through an effective mapping process of their community activities. Measurement of corporate community activities is also relevant to the Keidanren (Japan Federation of Economic Organisations) Charter for Good Corporate Behaviour (http://www.keidanren.or.jp) and in particular to its sixth point referring to corporate philanthropy. In the US, the Council on Foundations (http://www.cof.org) published a study in 1996 called Measuring the Value of Corporate Citizenship, based on work with 16 companies. This ambitious study attempted to devise methods to measure accurately the impact of corporate citizenship, demonstrating the strategic value to business and community. The main measure proposed is an assessment of the total costs and total benefits to the corporation of its community involvement. Any attempt to do so requires a methodology to put an accurate cost to the contribution as the LBG model does. Attempting then to put a single monetary value on what that achieves for the business is conceptually possible but fraught with difficulty and the Council on Foundations commissioned a further study during in 1999 in order to look again at the issue.
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Social accounting, auditing and reporting

A number of major companies, including some in the original London Benchmarking Group and in the follow-up project, are now looking at social reporting. For example BP Amoco, BT, Camelot, Diageo, NatWest and United Utilities have all commissioned work and/or published reports which seek to demonstrate the impact of the business on society, including but going beyond the specific contribution made by the community involvement programme. Techniques to evaluate this wider social impact are still in their infancy and subject to much innovation. Already it is clear that most progress will be made when sets of common definitions emerge around a number of key indicators, so allowing benchmarking to take place. This was the experience of the London Benchmarking Group. Certainly those companies which have already applied the LBG model not just to input costs but also to outputs and impact find the process of assessing wider impact much easier.
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Balanced business measurement

Finally some companies have adopted more holistic systems to measure their performance, getting away from relying on a single historic financial measure such final profit. In addition they assess regularly factors such as customer satisfaction, employee pride and investment in training. The best known is the Balanced Business Scorecard, which has the flexibility to identify the main drivers of commercial success and add measures to track performance. Companies such as NatWest have done so, and some divisions in the group have added an explicit indicator of community involvement. Again, where the LBG model has been applied internally, this becomes much easier, as data are readily to hand.
This document is taken from the publications Companies and communities: valuing the contribution and Companies in communities: assessing the impact. The combined volume is available to download from: www.lbg-online.net/members/default.asp For further information on the content of this, or any other, section please contact: The Corporate Citizenship Company (Ground Floor South) Cottons Centre London Bridge City London SE1 2QG +44 (0)20 7940 5610
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lbg@corporate-citizenship.co.uk
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Section 13. The full proforma
Section 13 - The full proforma

1. Charitable Gifts Intermittent support to a wide range of good causes in response to the needs and appeals of charitable and community organisations, increasingly through partnerships between the company, its employees, customers and suppliers Specific Activities 1.1 Donations to local, national and international appeals 1.2 Social 'sponsorship' of causes or events with name recognition but not part of a marketing strategy CASH 1.3 Company matching of employee giving and fundraising 1.4 Costs of supporting and promoting employee involvement 1.5 Costs of facilitating giving by customers and suppliers 1.6 Costs of employee volunteering in company time TIME IN-KIND 1.7 Cost of secondments, short and long-term 1.8 Gifts of products from inventory at cost 1.9 Written down product or equipment 1.10 Use of company premises and other resources Sub Total 2. Community Investment Long-term strategic involvement in community partnerships to address a limited range of social issues chosen by the company in order to protect its long-term corporate interests and enhance its reputation Programme costs in s Programme costs in s
Type of Support
Type of Support
Specific Activities 2.1 Memberships and subscriptions
CASH TIME
2.2 Grants and donations 2.3 Secondments, long and short-term 2.4 Other staff involvement such as technical and managerial assistance 2.5 In-house training and placements eg work experience 2.6 Gifts of products from inventory at cost
IN-KIND
2.7 Written down product or equipment 2.8 Use of company premises and other resources Sub Total
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3. Management Costs Type of Support
The costs of maintaining full and part-time community affairs staff Programme costs in s
Specific Components 3.1 Salaries and benefits
CASH
3.2 Operating costs including overheads, research and evaluation 3.3 Communication of community programmes Sub Total
4. Commercial Initiatives
Activities in the community usually by commercial departments to support directly the success of the company, promoting its corporate and brand identities and other policies, in partnership with charities and community based organisations Share of costs attributable to programme in s
Type of Support
Specific Activities
CASH
4.1 The sponsorship of events, publications and activities, promoting brands or corporate identity 4.2 Cause-related marketing, promoting sales 4.3 Support for universities, research and other charitable institutions 4.4 Community-based care for consumers with special needs 4.5 Longer-term secondments to charitable organisations
TIME
4.6 Community development assignments as part of a training plan 4.7 Gifts of products from inventory at cost 4.8 Written down product or equipment 4.9 Use of company premises and other resources 4.10 Exceptional one-off gifts of property and other assets Sub Total
IN-KIND
Sub total: cash
Sub total: time
Sub total: in-kind Grand Total
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5. Mandatory contributions
Community contributions or activities undertaken as a result of the requirements of law, regulation or contract.
This section covers community activities that are undertaken in response to the requirements of a law, regulation or contract. They should not be included with the voluntary contributions detailed above and should be reported separately. Examples include those services to disadvantaged customers which utilities are required to provide as a condition of their licence to operate. Detail of contribution Cost
6. The Business Basics
The core business activities in meeting society's needs for costeffective goods and services in a manner which is ethically, socially and environmentally responsible
Business basics includes all core business activities involved in delivering products and services which are critical to business but not motivated by community benefit. The manner in which these activities are managed has a significant social and environmental impact and is often reported alongside CCI in company reports, but is outside the measurement scope of the LBG model. Examples of community benefits associated with business basics include jobs created and taxes paid.
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Section 14. Definitions
Section 14 - Definitions
1. Charitable gifts Intermittent support to a wide range of good causes in response to the needs and appeals of charitable and community organisations, increasingly through partnerships between the company, its employees, customers and suppliers. Charitable gifts - cash 1.1 donations to local, national and international appeals Definition A cash gift made in response to an appeal or good cause identified by the company, and thus not part of its strategy for long term community investment in a limited number of carefully chosen social issues of importance to the company. Valuation The gross amount of cash donated. Where the actual payment made is net of tax, with the charity reclaiming the tax the company has paid, add back the tax to produce the gross amount. Output issues Some donations, particularly large ones, can have the effect of drawing other resources into projects and such leverage should be reported where possible. The key criterion is that the companys gift is the trigger to subsequent support. 1.2 Social sponsorship of causes or events with name recognition but not part of a marketing strategy Definition Payments as part of a high profile public sponsorship of a charity or activity run by a charity, to raise the profile of both the charity and company; even though some element of name recognition is sought, not tied to a marketing strategy or other business goals such as increasing sales as a commercial sponsorship would be. Examples are sponsoring a charity event or placing advertisements in charity programmes for events. They are recorded in full as charitable giving, even though some publicity is obtained, because primarily they respond to an appeal by the charity and do not necessarily serve a strategic corporate purpose.
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Valuation The gross amount of cash given to the charity or activity, but exclude separate identifiable elements of pure business activity, such as entertaining at a charity event. Output issues Precisely because such initiatives create publicity nationally and locally, they can often attract additional support, particularly from the public. Considerable additional funds can be generated and if so they may be recorded as leverage if the company was the only or main sponsor. 1.3 Company matching of employee giving/fundraising Definition Payments to match employee giving or fundraising, whether through direct activity or payroll giving schemes such those as run by CAF in Britain or schemes such as United Way in America. Valuation The cash the company contributes as the matching gift, including any incidental management or administration fees where met by the company. Absolutely not included in the total are funds raised by the employees themselves. Output issues Companies must not be seen to colonise the voluntary contributions of their employees to the community. The question is who is matching whom? Almost always it is the employees who have leveraged the companys contribution, not the other way around, so the LBG model does not normally count the employee contributions as leverage. 1.4 Costs of supporting and promoting employee involvement Definition Cash costs associated with supporting employees in volunteer work of their choice, such as publicity materials, money-for-time grants and payments to support challenge activities. (Organised employee involvement as part of the companys strategic community investment programme is counted in the second section below.) Valuation Cash contributions to organisations where an employee volunteers, as at BT, or payments for expenses, for example by Whitbread to help employee volunteers buy materials to complete projects such as repainting a nursery school. Output issues An output measure in the leverage section could be an estimate of the number of employees who volunteer as a result of an incentive grant, but again be clear who is matching whom and err on the side of caution by not claiming undue credit.
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1.5 Cost of facilitating giving by customers and suppliers Definition The cost of using company facilities or systems to help customers or other business partners make donations to charities. Examples include putting collecting tins in shops or bank branches and schemes such as British Airways Change for Good which collects foreign currency from passengers. Likewise water utility companies encourage customers to donate through their quarterly bills funds for Water Aid schemes in the developing world. Valuation Any genuinely additional costs to promote or manage the scheme. If it is just printing an extra box on a water bill and making the electronic transfers to the charity, there may not be any. However, some campaigns are quite expensive to prepare (literature and collecting boxes for example) and promote (posters and other publicity). Output issues The money raised by the facilitated giving from customers, employees or the public is classified as an output in the leverage column, not a company contribution. In some cases, like Whitbreads support for pub fundraising, the input cost is small but the output in the form of cash raised can be in the millions - a highly effective use of the community programmes limited resources. Charitable gifts - time 1.6 Cost of employee volunteering in company time Definition Time off during the working week for employees to pursue their own personal community activities. (Organised employee involvement as part of the companys strategic community investment programme is counted in the second section.) Valuation Paid time off is generally valued at the employment cost to the company, covering salary plus additional social security charges such as national or health insurance and pension payments. For practicality, rather than trying to calculate an actual cost for each individual employee, average rates can be used to produce a standard hourly or daily rate, either for the company as a whole or for different grades such as managerial, administrative, manual, etc. Where the inclusion of a very highly paid senior executive would distort the average, a typical figure should be used instead. This standard rate is then applied to the estimated lost productive time. Alternatively, for simplicity national average employee costs can be used. In the United Kingdom, the average gross weekly pay in April 1998 was 384.50. Taken from the New Earnings Survey 1998, this is also analysed between manual and non-manual workers. Adding 10% to cover employers national insurance and 5% if pension contributions are paid yields the following standard rates per day:
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non-manual workers: 100 manual workers: 70 average: 90
However care is needed when valuing ad hoc volunteering - where an employee leaves a few hours early to attend a school governors meeting, he or she will often make up the time, for example by coming in early the next day. Erring on the side of caution, it is best only to count clearly identifiable, substantive paid time off allowed under formal schemes, such as Railtracks five days company time allowed for volunteering or United Utilities half a day a month. Output issues Only when there is substantial support by the company can outputs be claimed from the company contribution; otherwise they really belong to the individual employee. 1.7 Costs of secondment, short and long-term Definition Called loaned executives in America, this is when an employee is formally released to undertake a specific task or programme of work or even full time job for a charity or other community organisation, whether for a year or more, three months or just one day a week. Valuation On the same basis as the valuation of volunteering, namely the full cost to the company of lost productive time. As secondment is a formal release from work, there is normally no question of the employee making up the time. For long term secondments perhaps at end of career, the cost of any significant package of fringe benefits, such as a company car, can be included, because these are genuine additional costs of maintaining the employee on the payroll. Output issues Since the amount of company contribution is generally significant, the full range of output measures can be used.
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Charitable gifts - in kind 1.8 Gifts of products from inventory Definition Ready for sale products taken from the companys inventory stocks rather than being sold as new commercially. The range of examples is huge, from computer hardware or software (IBM), pharmaceuticals (SmithKline Beecham) or household goods (Unilever). Valuation Currently there are many ways used by companies to value in-kind contributions, but the LBG model says clearly that the actual cost to the company must be the guiding principle. Therefore gifts of product from inventory are normally valued at the average unit cost of production. This information should be easily available from accounting records and contains no element of overcounting through inclusion of a profit component. Note that the treatment of an item can change rapidly: perishable food stuffs such as sandwiches are stock valued at cost on the day before their best by date. The following day, the company must withdraw them from sale and they are written down to scrap value (and included in the next sub-section). Output issues Companies can suffer an opportunity cost on these contributions, as some at least might have been sold to the beneficiary. However, this lost profit element is not counted as an input cost, as it is too speculative. Instead the retail value of products donated can be used as an output indicator of community benefit, symbolising the worth to the charity or other beneficiary. Indeed recommended accounting practice for charities says they should include gifts in-kind at a reasonable estimate of their value to the charity, normally the retail price. 1.9 Written down product or equipment Definition Goods, stocks or assets held by the company but written down in its books for a variety of reasons. Products may be time dated, slightly damaged or end of range; they may also be trials not put into full production or simply surplus to market demand. Equipment is usually office equipment and computers surplus to requirements or approaching obsolescence. Examples include perishable goods approaching sell-by date (food and sandwiches at Marks & Spencer) and equipment from refurbished premises (the contents of hotel rooms at Whitbread).
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Valuation These product or equipment contributions should normally be valued at the depreciated value held in the companys books of account. For written down products, where cost overstates their actual worth, accounting policy will have reduced the amount to the net realisable value (essentially a fair market value for a second hand sale less costs of disposal). Equipment will have been depreciated over a number of years and again will be reduced to net realisable value where this overstates their remaining value. Two practical problems sometimes arise. Donated items can have a zero book value because they have been fully written down over (say) a four year and any residual value is not significant (material) in terms of the companys whole accounts - but in the context of the community programme and for charities, zero is not a fair figure. Under such circumstances, a notional amount, based on net realisable value, can be used as the input cost to the company, since the equipment could have been sold second hand or as scrap. Secondly, sometimes no figure is readily available from the books of account, especially for products. Then the LBG model says to make a reasonable estimate or apply a rule of thumb of 20% of sales price for products. Generally, if the items involved are small or minor, and only contributed occasionally, then precise valuation is not an issue, and a fair estimate will do. But if they are major or regular contributions, then a professional valuation should be sought, providing proper substantiation to the claimed figure for cost to the company. Output issues Record in the normal way. Where appropriate, one business benefit can be the disposal costs saved, such as Landfill Tax avoided. 1.10 Use of company premises and other resources
Definition A broad range of items, including holding meetings, providing places on in-house training courses, photocopying and printing facilities, other business services, office premises made available at nil or reduced cost, loan of specialist equipment, etc. (Professional services, such as pro bono legal advice, would normally be counted as a contribution in time under the appropriate category.) Valuation Normally, only the genuine additional costs can be counted, for example only refreshments during meetings or the paper used in photocopying or the heating and maintenance of premises. For ease, simply take the standard internal charging rates, for example those used by the catering or reprographics departments. Exceptionally, the full cost of a donated resource can be used where the company suffers genuine costs by choosing to support a community organisation or project. Examples include the use of training facilities when fully booked and which would otherwise be let at commercial rates and the loan of a whole office block which is permanently redundant and would otherwise be sold or commercially relet. Likewise,
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services offered free or discounted on a regular basis should be counted at their full cost, rather than just the marginal cost, the rationale again being that significant savings could be made if the community contribution ceased. Output issues The normal methodology applies here. One indicator of the community benefit might be the open market rate for the facilities and services provided as a measure of their worth to the charity. 2. Community investment Long term strategic involvement in community partnerships to address a limited range of social issues chosen by the company in order to protect its long term corporate interests and enhance its reputation Community investment - cash 2.1 Membership and subscriptions DefinitionCompanies often commit core support to community-based organisations and charities, as part of their strategic investment in the community, by paying a regular membership subscription. Bodies such as Business in the Community, Young Enterprise and Save the Children, are examples. Chambers of commerce or employers association - which promote business interests - do not count (although an additional grant to such bodies for a separate scheme they are running of general community benefit might and would then be counted in the next section). Valuation Simply the cash paid. Output issues The normal approach to evaluating the output benefits applies. 2.2 Grants and donations This is where the main strategic community investments will be recorded. The general principles previously presented on definitions, valuation and output assessment apply here too. NatWest includes under this heading its grants of 250 to organisations where staff volunteer in a management capacity, such as school governors, charity board members, since this is a key element of its overall community strategy. Community investment - time 2.3 Secondments, long and short term See the advice given about time in the section above on charitable gifts.
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2.4 Other staff involvement such as technical and managerial assistance Definition This covers more flexible forms of staff engagement which are part of the community investment strategy, such as where companies involve professional staff with specialist skills as volunteers. Also included are the costs of lawyers, accountants and other professionals undertaking pro bono or reduced rate work in house. Valuation The general rules apply here about only valuing the genuine additional costs to the company. The services of professional staff can be counted at normal chargeable rates less the profit margin (ie full not marginal cost) where they would otherwise have been undertaking commercial client work. Specialist skills volunteered during the employees own time should of course not be counted. Output issues The general approach applies here. 2.5 In-house training and placements eg work experience Definition The time of employees who help to supervise work experience placements, such as school pupils or other trainees and teachers gaining industrial experience. Valuation The cost to the company is normally only the loss of productive working time - so a week long placement might involve a day per individual to induct them at the outset, supervise progress and debrief at the end, identifying learning points. Output issues Whitbread offers around 350 individual placements a year for teachers to benefit from exposure to industry. The costs of providing replacement teachers is substantial and shared between the schools themselves and a national non-profit organisation. This contribution is effectively leverage. By reporting it along side Whitbreads own costs and indicators of the numbers involved, the full input to the scheme is known and its benefits to the community and business can be judged accordingly. Community investment - in kind Sub categories 2.6, 2.7 and 2.8 are identical to the charitable gifts section, except that these are contributions as part of the strategy of community investment on key social issues of importance to the business. On valuation, note that some manufacture-to-give schemes, such as that run by SmithKline Beecham, may not have a normal inventory cost in the books of account. Here pharmaceuticals are specially added to the production line, after agreeing with aid agencies their particular needs. In such limited cases, the company will need to apply the general principle of cost and estimate a suitable input valuation.
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3. Management costs The costs of maintaining full and part-time community affairs staff Definition All the direct costs of conducting the community relations programme, without which no contribution could be made. This covers central community relations staff, along with a share of the costs of part-time staff in the operating divisions and subsidiaries around the group. However where community relations is only an incidental part of those employees job descriptions, this is deemed not a management cost and their time should be counted above, as appropriate. The rule of thumb says incidental is up to 20% of time; thereafter costs should be included here as management. Divided for ease of benchmarking into three categories, this includes not just salaries but also operating overheads, research and evaluation to maintain the programmes effectiveness. Also included are communication costs related to community engagement but not general promotion of corporate reputation. Valuation The normal approach applies here, with the full cost of running the community affairs department, for example including office and premises costs. The LBG model gives a rule of thumb that communication costs should not exceed 5% of the costs of the whole community programme. Output issues Management costs do not appear in the output matrix, because they do not have a direct output but instead underpin all the activities in the charitable gifts and community investment sections. They are recorded, however, to allow a judgement about managements efficiency (compared to total input costs, as a percentage benchmarked with other companies) and the programmes effectiveness in generating outputs and impacts in the community. 4. Commercial initiatives Activities in the community usually by commercial departments to support directly the success of the company, promoting its corporate and brand identities and other policies, in partnership with charities and community based organisations Commercial initiatives - cash 4.1 The sponsorship of events, publications and activities, promoting brands or corporate identity Definition To achieve brand or corporate recognition, a company may sponsor arts events, media programmes, university conferences or scientific expeditions. These are fundamentally commercial as the business benefits are designed to accrue to one particular company.
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Valuation Only the costs of the specific elements given to the charity or public body without restriction can be included. No direct corporate advertising or entertaining costs can be included. Output issues The value of the brand recognition that accrues to the charity from association with the company has been discussed as one output from this activity, but as yet no measure for this community benefit has been devised. 4.2 Cause related marketing, promoting sales Definition Cause related marketing takes the concept of sponsorship one step further and ties it directly to sales, the purpose being to increase sales or brand recognition by associating it with a cause or charity. The Unilever Flora Marathon, bank affinity credit cards and charity promotions in supermarkets such as Tescos Computers for Schools are examples. Valuation Only the amount which goes to the charity or community partner for their use in pursuing their public purpose goals can be counted. The rule is still cost to the company and not, in the case of computer equipment, what the schools would have paid if they had made purchases on the open market. Advertising and public relations expenditures do not count. Output issues If additional funds are raised by cause related marketing initiatives, for example from customers, they are recorded as leverage and can be very substantial as they go to the community partner. 4.3 Support for universities, research and other charitable institutions Definition This is cash support, often from departmental not community affairs budgets, for programmes such as grants to students, scientific research, engineering experimentation and establishing a chair at a university in subjects of central importance to the commercial wellbeing of the company or its industry. Those elements which are of general public good can be included here, where learning is shared perhaps in the first phase of research projects. The fact that subsequent commercial exploitation of intellectual property rights is retained by the company does not invalidate the reality of a community contribution. However, where the research findings are wholly confidential, they become commercial transactions and are not part of the community contribution. Valuation The cash value of the cost of the contribution, as normal.
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Output issues None specifically apply here. 4.4 Community-based care for consumers with special needs Definition This category borders on mainstream business practice. Expenditure required by disability discrimination legislation or industry regulators or now an everyday part of doing business, such as providing bank statements in Braille, cannot be counted. However the major private utility companies in particular, but not exclusively, make extensive provision for customers with special needs well beyond anything required by regulators. One example is the creation of a separate and charitable fund with some independent trustees to make awards to customers in difficulty with paying bills or facing heavy connection charges in remote and disadvantaged geographical communities; this is allowable provided the scheme is not restricted to customers of the funding company. Another example is using the database of older customers, required by the regulator, to provide additional voluntary services in association with (say) Age Concern, such as a regular newsletter with helpful tips on keeping warm in winter or with an invitation to a company-sponsored Christmas party. Valuation If such provision is demonstrably beyond a statutory requirement and is undertaken for a clear charitable purpose (usually in association with a qualified community-based organisation), then the cost of this additional contribution should be counted. Output issues The general approach applies. Commercial initiatives - time 4.5 Longer term secondments to charitable organisations The general principles apply, although careful judgement is required because of the closeness to business interests. Thus a secondment to an industry agency such as a trade association to promote industry exports would not count. However support for a quango trying to overcome youth unemployment generally through publicly-funded schemes probably would. Bank secondments to enterprise agencies have long been counted, either here or as part of the community investment strategy. 4.6 Community development assignments as part of a training plan The general principles apply here. Of particular note is the need to exclude part of the cost of time away from work since development assignments are training tools, often used in lieu of traditional alternatives such as a distance learning or residential course, the costs of which would clearly not count. This is in line with the principle of excluding
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from the commercial initiatives category the separately identifiable elements of direct business benefit. Commercial initiatives - in kind Sub categories 4.7, 4..8 and 4.9 are identical to the other sections, except that these are contributions arising from commercial initiatives in the community. Accordingly output evaluation will tend to concentrate on their business benefit. 4.10 Exceptional one-off gifts of property and other assets
Definition This is a sub-category for rare one-off events of significant size. Examples include the contribution of whole buildings, water rights or land to the community. They are included in commercial initiatives because they are often linked to business operations, such as mining or natural resource extraction and plant closures. As one-off events, they cannot be seen as part of a long-term community investment strategy and inclusion as a charitable gift would seriously distort trend data. Valuation The valuation of these gifts follows the general rule of cost to the company and mirrors guidance given in the other sections. Their exceptional size may make it worth valuing them individually, based on professional advice, and this helps with transparency in external communication. Output issues None specifically apply here
5.
Mandatory contributions
Community contributions or activities undertaken as a result of the requirements of law, regulation or contract. Definition Some companies make significant contributions to the community under the requirements of law, regulation or contract. As these are not voluntary the LBG requires that these are reported separately from voluntary contributions. For a contribution to qualify as a mandatory contribution it must meet the following criteria: Be mandatory, that is, legally enforceable, whether through statute, regulation or contract, even if freely entered into: Have clearly identifiable community benefit, as recognised by the LBG model (usually but not necessarily in partnership with independent agencies); The company exercises some discretion or influence over how the contribution is used, at least at the outset.
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Section 15. Hot tips for using the LBG model
Section 15 - Hot tips for using the LBG model

This section includes tips on:
Overall use of the model Improving data collection Assessing leverage Measuring community benefits Evaluating business benefit Impact assessment
Five hot tips for using the model

1. This is a management tool, not a tax return! The input/output matrix is primarily a management tool, helping community affairs managers and others to do their jobs better. It is not a tax return that has to be laboriously filled in to account for every last penny (even though it might feel like it the first time around). Begin by recording those inputs that are easily captured. Not every item of in-kind or employee time has to be quantified. Start with the larger ones. Simple estimates are fine as a starting point. Similarly with the outputs side of the matrix, companies should first record information that is easily verified and available, noting where gaps exist for improvement in next years accounting. Consider using the matrix as a way to compare possible new projects before funding is agreed, by estimating likely costs, outputs and impacts, and so select the best combination. Likewise on renewal of funding, the model can be used to think through alternative options and scenarios for the future. Use it as a tool to help change direction and get people especially senior management - thinking about what can be achieved. Try to involve the charity partner and not just on the community benefit column. 2. A framework, not a straitjacket! The model seeks to promote a new way of thinking about corporate community involvement. It is about getting community affairs managers and others to consider where they are going, by asking these sorts of questions: Valuing inputs How much is this really going to cost in terms of cash, time and in-kind? Can we help this project in ways other than cash? Can we do something worthwhile for nothing? Creating leverage Is there any way for us to multiply the value of our contribution through some innovative partnerships?
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Community benefit Just what are the community benefits of this contribution and can we prove them if asked? Business benefits What is the benefit to the business of this activity? Why does it fit with who we are? Can we measure this if necessary? Impact potential Is there a way really to change peoples lives here? What performance goals should we be setting for the project? What will it take to achieve them in terms a sustained partnership? How can we measure success for both the community and the business? This is a list of potential questions and there is no right answer to any of them. They can be asked about every single community contribution a company makes, although they are usually only asked about major programmes. 3. This is about developing a common language for managing community involvement. The types of questions asked above are ones that all managers in the business with an interest in community programmes should be using. The model creates a way of talking about how all the company views its whole relationship with the community and manages its multiplicity of contributions. Similarly these types of questions are ones that community partners should be prepared to answer when they approach a business for help. Why not ask them to complete the matrix? It can only help them gain support, if they can frame their ideas and proposals in the business language of inputs, outputs and impacts. A growing group of companies from all sectors of business are using this model in the UK and abroad. That means that they too can talk to each other and benchmark performance using consistent definitions and a common approach. 4. Size doesnt matter, small is beautiful! This approach is as valid for a company of 50 people as it is for one of 50,000. A small company is a business enterprise just like a large one and uses exactly the same basic input/output approach to run its business. Indeed the model allows small companies to compare themselves with big ones, for example by looking at contributions per head of staff or as a percentage of profits and sales income. When applied to a group of small companies by the Getting the Measure project, small companies were found to be every bit as active and as efficient as many of the large ones. This approach is also as valid for a small grant of 500 as it is for a grant of 500,000 with additional leverage. A small grant for a feasibility study one year can launch a project in the next, which grows to be a major charity five years later making a major impact. The model is the way to capture that growth and truly understand what has been achieved - but only if proper records are kept.
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5. Good tools need to be kept sharp! The key to making the model work is good record keeping. The first year of getting the systems in place may take some time, depending on the complexity of the business. The key is to put in place regular recording of information, collecting as you go and not waiting until after the end of the year when data may be lost and memories hazy. Some companies offer small prizes or other incentives to departments which send in questionnaire replies on time. Once the basic approach is established, it becomes progressively easier to maintain and improve. This is true for annual data collection but particularly so for managing trend data over time, showing how totals for inputs and outputs build up to impacts. Challenges and difficulties with categorisation, valuation, measuring outputs and assessing impacts will constantly occur. Help can found from other companies using the model, CAF and The Corporate Citizenship Company.
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Four tips for improving data collection

1. Keep it simple! Never send complicated input/output matrices to colleagues at most use the short template with colleagues unfamiliar with the model or devise your own questionnaire based on the proforma. 2. Use understood terms. Do not use terms like community investment and commercial initiatives unless they have been explained. 3. Say what you mean. Do not rely on simple charitable giving to describe community involvement - it is too narrow to encompass the full range of activities likely to be going on. 4. Ask for simple data and do the analysis yourself. Do not ask colleagues to value their time and in-kind contributions, but simply to provide a fairly accurately record of the base numbers (hours volunteered, computers donated), then do the valuation yourself. That will ensure consistency and take a burden from colleagues, particularly where volunteering and the donation of scrap equipment is concerned.
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Three tips on assessing leverage

1. If you dont ask, you wont get. Leverage is about putting deals together. It is about how scarce company resources can be made to work harder. Companies need to be constantly asking questions of community partners about how they can help control input costs, by finding matching funders or even more radical approaches to structuring the support for a project. Companies bring credibility to projects, as well as resources, so in major projects they and the community partners together should work out how to lever that asset to best advantage. It is not rude to ask for the re-packaging of a grant proposal to maximise the leverage of company resources, its good business sense. 2. You can lever company assets as well as community ones. Corporate community budgets and contacts can be used to help package deals with colleagues internally as well as externally. Companies have an immense range of cash and non-cash resources beyond those immediately available to the community affairs manger. For example, a small grant to an IT charity to help fund the refurbishment of older PCs might instead become a major in-kind gift from the computer department or turn a request for a grant into a cause-related marketing proposal. 3. Measurement is a must. If community affairs mangers are to be effective social venture capitalists, then they must measure the full scope of the deals they put together. They need to value the inputs they win from others and show how they have been a catalyst for its success. In this way, their credibility as people who make things happen will be greatly enhanced.
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Five tips on measuring community benefits

1. Ask and you may well receive! Charities are generally very willing to provide output data, as they have their own established reporting systems already both for existing major funders such as government departments and to report to individual donors using media such as their annual reports. 2. Start as you mean to go on. The precise form and content of evaluation needs to be specified and agreed at the outset, otherwise it may be unduly costly or impossible to compile data retrospectively. Also beware mission creep evaluate against original objectives so dont expect the project to achieve more than it was designed to. 3. Be realistic. Many projects are simply too small to be worth requiring special measurement strategies. Companies should not ask for impact measures (e.g. a reduction in homelessness) if they are not funding action to achieve it (e.g. only bed spaces in a night shelter). For example, contrast NatWest Face 2 Face with Finance (see chapter 7) which seeks impact on financial literacy levels with the cause-related marketing schemes run by a number of companies to provide computers, books and other equipment for schools an output objective only. 4. Think long term and be prepared to pay for results. Dont expect to see impact showing up in the short-term; but do build impact assessment into three or five year projects. Proper impact studies may require a major research strategy - if companies want detailed impact measures beyond simple output data, they should add an element of funding as necessary to achieve them. 5. Community partners can assess your business benefits too. Charities can also help to measure some of the business benefit outputs, as they tend to be closer to actual implementation than you. One example is recording the number of your employees involved, another is listing the opinion leaders who attend promotional events. PR departments in larger charities can track your press mentions in their activities, often at no extra cost.
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Six tips on evaluating business benefit

1. Achieving business benefit is your responsibility. Responsibility cannot be transferred to your community partner. You need to constantly work with your partner to ensure your goals are achieved. 2. Know what you want to achieve before you start. You need to know where you are starting from and where you want to end up. Start with a baseline study and plan to achieve the desired outcomes. 3. Measuring progress is vital, so collect evidence of your success. You need systems to collect evidence of progress against your planned goals and key milestones along the way. At the onset of an initiative, you need to have identified your success measures. Now put systems in place to collect the evidence for analysis. 4. Review and reflect on progress. Major projects should be subject to regular reviews, monitoring progress towards meeting business goals. All projects should have a simple final review to see if the business goals initially set for them were achieved and what lessons can be learned. 5. Build in proper research and communication strategies. Few, if any, business decisions move forward without good research, yet charitable giving and community investment seems to think otherwise. If you want serious business benefits from major projects, you will need to spend money on research and communication strategies too. This means accepting that management budgets are good things. 6. Work with business colleagues to get community research done. Colleagues in public affairs, human resources and marketing often undertake research into opinion former, employee or customer attitudes. You can include questions related to the community in such surveys at little or no extra cost.
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Four tips on impact assessment

1. Be realistic Dont expect impact if you are only resourcing activity capable of generating limited outputs. 2. Be patient Few projects can generate immediate impact on the identified social issue or the business goal. Be prepared to invest for long term reward. 3. Share the credit While waiting for your community contribution to generate practical outputs which can have the desired impact, other factors can come into play. Conditions change, new projects start, other ones come to fruition. It is often hard to ring-fence the impact of your project from the environmental context. Be prepared to under-play your contribution and share the credit. 4. Plan your research Impact assessment is all about focusing on the ultimate goals of the project. You must plan your measurement strategy at the outset and ensure it is funded before the project gets going.
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Section 16. Case studies
Section 16 Case studies

This section contains the full case studies, as listed below: Summary of case studies
No Company Charitable gifts 1 Nationwide 2 United Utilities 3 American Express Community investment 4 SmithKline Beecham 5 6 7 Unilever 8 Whitbread 9 BT 10 NatWest Commercial initiatives 11 Unilever 12 Camelot 13 United Utilities 14 Marks & Spencer 15 BT Mobile Project Macmillian Cancer Relief WaterAid Global Volunteer Action Fund Brentford Log Cabin European Employee Involvement Bosnia Paediatric Physical Rehabilitation Investors in People in Schools programme Youth & Community Centre, Salford Swimathon Board Bank Persil Colour Care Minimising Under-age Sales of Lottery Products SME Venture capital fund Education Action Zone WhizzKidz mobile phone promotion Type of contribution Cash donation and media support Facilitated giving Grants to project supported by employee volunteers Employees plus cash donation Employees plus cash donation Finance plus secondee Some funds plus employee time In-kind plus some cash Facilitated giving Staff volunteering Cause-related marketing Market protection Long term market growth Development assignment Cause-related marketing
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Case study 1: Nationwide

Project: Type: Macmillan Cancer Relief Charitable gift
Description: On 25 February 1999, Macmillan Cancer Relief held its Nationwide-sponsored Hold Your Tongue event. Children across the UK held 10 minutes silence to raise funds for the national cancer charity. This was the second year that Nationwide has supported the event, which combines the fun of a sponsored challenge with helping children to understand more about cancer.
Inputs Leverage Cash: 30,000 In-kind support: Nationwide Media support and photographer Nationwides contribution enabled the event to take place and, as a result, over 175,000 has been raised to date for Macmillan Cancer Relief with more money still coming in. Nearly 280 schools across the UK took part.
Outputs Community benefits Educational element of event allowed 140,000 pupils to benefit from professional training packs that support the National Curriculum and increase understanding about cancer, in a way specifically aimed at children to avoid fear of the subject The 175,000 raised for Macmillan Cancer Relief allows the charity to continue its work in improving the quality of life for cancer patients Business benefits Enhanced Nationwides reputation in local communities where schools took part, and highlighted its relationship with Macmillan Cancer Relief to the public. Raised Nationwides profile locally and nationally through media coverage and mentions in event literature sent to schools. Built on existing good relations with Macmillan Cancer Relief.
Longer term and wider impact: this depends crucially on the effectiveness of Macmillan Cancer Relief in applying the funds raised. For Nationwide, the impact will be felt mainly in its overall corporate reputation.
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Case study 2: United Utilities (North West Water)

Project: Type: WaterAid Charitable gift
Description: North West Water has had a 15 year partnership with WaterAid. The charity was set up by the UK water companies in 1981, in response to the UN decade of water in the 1980s. The goal is to help people and communities in developing countries achieve sustainable improvements in water supplies, sanitation and hygiene. NWW launched the Thirsty World Appeal in 1994. In 1997, it celebrated raising 1 million in the north west and launched a new target of 2 million.
Inputs Leverage Costs: Printing a leaflet to go with bills costs about 20,000 Time: Ten employees are WaterAid committee members, meeting four times a year. Sub-groups organise specific events and committee members also arrange a monthly lottery draw. The regional representative spends two days pa in national meetings. Each year one supporter is allowed two weeks paid leave to attend the WaterAid supporters trip. The billing leaflet generates in excess of 80,000 pa donations from customers in the north west. NWW has encouraged other companies to support WaterAid including many suppliers. Suppliers hold an annual Golf Day which raises over 12,000 with many of the prizes donated by participating companies. Suppliers also donate goods and services to the Christmas Pledge Sledge and other fundraising events. NWW employees encouraged Granada TV to support WaterAid as part of their annual appeal. The appeal raised over 20,000 and generated extensive TV coverage (regional viewing figures of over 21%). Outputs Community benefits Direct: 2,000,000 raised for WaterAid through the Thirsty World Appeal in the north west over four years As projects cost less than 10 per head, that equates to over 180,000 people gaining access to safe water and sanitation in Africa and Asia Promotion of WaterAid locally through billing leaflet, promotion and events arranged by NWW. High awareness and support for WaterAid amongst NWW employees. Indirect: Increased awareness of WaterAid in the north west. Business benefits A project that has united support from employees, the business and the local community. Enhanced NWW reputation with customers, employees, the community and opinion formers. Contributes towards NWW achieving high recognition (70% of the community agree that it is meeting their expectations on social responsibilities). Award winning partnership (Sword of Excellence in 1994). Enhanced employee motivation with many team events. Helps promote the Use Water Wisely message.
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Total estimated cost in excess of 2,000. In addition, UU Corporate Services Director is the Chairman of the North West WaterAid steering committee; UU newsroom helps promote events and appeals; Speakers Panel gives talks to community groups. In-kind:
Employees arrange events often in their own time. Nearly 9,900 employee numbers are entered into the monthly WaterAid Lottery draw. On average, contributions to WaterAid triggers two to one matched funding from the governments Department for International Development.
Improved access of people to clean water and adequate sanitation, thereby reducing world deaths from water related illnesses. Highlights the importance and value of water to customers in the north west. WaterAid is now one of the UK's largest charities.
NWW hosts community events, manages local promotion, education centres promote WaterAid to schools. Longer term and wider impact: the funds raised through the efforts of North West Water, its employees, customers and suppliers have a direct impact on the health and well being of communities in the developing world. In the belief that accurate measurement is beneficial to community and business partners, WaterAid is now committing new resources to comprehensive evaluation of the long term success of its projects, relevant measures being the reduction in water-borne diseases and infant mortality.
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Case study 3: American Express

Project: Type: Global Volunteer Action Fund Charitable gift
Description: In 1996 American Express launched its Global Volunteer Action Fund to take overseas an established US programme which supports employee volunteers in their local community. Employees are encouraged to work in their own time for local charities of their own choice. The company believes it is right to support employees in their personal commitment to good citizenship and provides them with advice from a co-ordinator and small grants to the organisations they work with. The company has used CAF to administer the programme which now runs in 28 countries and has grown at an average of about 50% a year since its inception.
Inputs Leverage Cash Over the four years from 1996, a total of $482,500 has been made in grants to the organisations employees work with. In addition, CAFs charges for administering the programme have been met by the company. Time and in-kind support: includes telephones, copying and publicity materials for 20 volunteer programme coordinators around the world. Co-ordinators spend about 2 working hours a month to administer grant proposals, advise participants, communicate the programme and organise recognition for the volunteers. Employees have been encouraged to volunteer by this programme but that is not counted here as leverage (see note below). Rather there is some evidence that several US companies have been encouraged by the example to expand their volunteering programmes overseas, particularly as the US tax and legal constraints on giving small grants overseas have been solved - this information is freely shared with other US companies. In country, local firms are similarly encouraged to develop their own programmes by the example American Express has given Outputs Community benefits Over the four year period: In excess of 700 employees have spent an average of 8 hours a month volunteering with charities of their choice in their local community (more than 60,000 hours in total). More than 400 community based organisation in 28 countries have received grants averaging over $1,000 as well as the volunteer time to help older people, the sick and atrisk youth amongst others. Over half the $428,500 given in grants went to projects in 18 developing countries where need is pronounced and the purchasing value of the US dollar is greatly increased. Business benefits
Internal benefits
Employees have welcomed the initiative. It continues to grow and most employees stay active once they have participated. They can practice their business and personal skills in new surroundings and the programme supports their morale and pride in the company. They are also given recognition within the business and the community as leaders. The programme brings employees together from across the business within the country and to the extent they work in teams, allows employees of all grades to mix. It is featured regularly in company publications and the high level of awareness shows the effectiveness of the communications strategy. The programme also helps to create a common sense of company identity around the world.
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No monetary value is placed on this contribution.
Many small organisations in these countries were able to use the endorsement by the employees and the company to gain access to other resources but no record is available of the value of this leverage. By meeting the requirements for an American Express grant, the community organisations have learned about grant application procedures for future use as well as being able to leverage other resources. There has been some technology transfer in the field of grant seeking generally and meeting UK grant requirements in particular. In a small but positive way, the programme is helping to build a culture of volunteering and corporate community involvement in countries where it has never before existed. This is a contribution to the development of civil society around the world.
External benefits
Especially in countries where corporate community involvement and volunteering are new, the programme has been recognised as a valuable contribution to the society by local and national leaders in the public and nonprofit sectors. The philanthropic values of the Global Volunteering Action Fund are particularly well received because the company is also very active in strategic commercial sponsorships: the employee programme helps balance its profile as an all-round good corporate citizen active in philanthropy and community investment through programmes to protect monuments as well as cause related marketing and commercial sponsorships.
Note on leverage: within the LBG model, some companies are comfortable claiming employees volunteering as leverage from the company EV initiatives while others are not. All companies in the Getting the Measure Project believe in treating this issue cautiously and avoiding any appearance of colonising the personal commitment of their employees. So they only report volunteering as leverage when the employees themselves find this description acceptable.
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Case study 4: SmithKline Beecham

Project: Type: Brentford Partners Programme with the Log Cabin Community investment
Description: The Log Cabin is an adventure playground for disabled children assisted by staff from SmithKline Beechams Brentford office, as part of the Partners Programme, SBs Europe-wide employee involvement scheme. Every participating site must identify a notfor-profit partner in their local community which reflects SBs European focus of childrens health. The partner must also offer the opportunity for as many staff on the site to be involved as is possible. The staff on the site should use the cash donated to leverage further opportunities such as fundraising events.
Inputs Cash 5,000 In-kind giving SB supplies nutritional drinks for events run by the charity, left over sponsorship goods mugs/t-shirts etc (no cost attributed) Volunteer days During the Community Investment Day, SBs Corporate Management Team worked at the Log Cabin, repairing, painting, gardening cost approximately 10,000 Leverage 72 employees signed up as volunteers across Brentford (*) Partners team member has become the treasurer for the charity; two of the team members have become board members of the charitys committee. Members of the Corporate Management Team now working directly with the Log Cabin on improvement projects Partners team are providing business planning, advertising, marketing, training and recruitment skills to help the Log Cabin. SBs high profile involvement is helping the Log Cabin in their fund raising efforts in the local community as we are a 'validation' for the work they do. Outputs Community benefits The Log Cabin provides facilities for 350 disabled children during the course of the year as part of the after school club. They also rent their facility to many other local children, schools and playgroups as a revenue generator. All improvements made to the Log Cabin facilities help these children. Improvements to facilities enable the Log Cabin to generate further income from renting the facility to other groups or organisations and for social events. Creation of a dark room for special needs children and a sensory stimulation room have enabled the Log Cabin to extend their services to disabled children Business benefits Enhanced reputation in the local community between 350 and 1,000 families affected by the project, telling their friends and colleagues. Partners work with local suppliers for items needed mulch, a kitchen etc raising awareness of SB as a good corporate citizen. Improved recruiting statistics have shown that good community involvement programmes is important to prospective graduate applicants to SB. Staff development participants have the opportunity to mix with people from all business units within SB and with all other functional areas and at all levels within SB
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Partners Brentford are using company-advertising boards to promote local companies who in turn support the Log Cabin. Partners can offer free advertising space in return for cut-price goods that the charity needs. Funds raised for Log Cabin as percentage of sale of goods on SB premises
The Partners team have undertaken general office work filing, typing, help with IT skills etc, to alleviate the administrative tasks of the charity The Partners team help with the after school club supervision, cooking, washing up etc as well as help with fund raising events and work with the children hearing them read, play schemes, day outings
It also gives all participants the opportunity to be project managers and team leaders regardless of their job or grade and makes participants feel good about their company, thus less likely to look for satisfaction elsewhere.
(* Employees involved came from eight business units and from 14 functional areas. All levels were represented from administrators to directors. Partners Brentfords internal sponsor is a vice president.)
Longer term and wider impact: potentially it is possible to give some measures of improvement in the quality of life of the children involved in the project, tending towards qualitative measures. Similarly, the impact on staff attitudes is measurable, and perhaps also tracking improvements in bottom-line factors such as retention.
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Project: Type: Liaison Network Partnership with Barretstown Community investment
Description: The Barretstown Gang Camps mission is to benefit seriously ill European children through an international summer programme and year round activities which support children with special needs and their families, and the volunteers, health professionals and policy makers who serve these children. Barretstowns philosophy of care is predicated on the knowledge that the therapeutic recreation engages participants socially, emotionally and physically, challenges them to grow beyond perceived limits, thus enhancing self-esteem, confidence, trust and friendship. The European Liaison Network, funded by SB, is designed as a permanent European recruitment network to support Barretstowns programme to serve an ever-increasing number of seriously ill European children. The programme also demonstrates a partnership where SBs resources, cash, people skills and products can add value.
Inputs Leverage Cash: More than 1.6 million to date Employee secondment: Interpreters, in-country on the ground support and others Consultancy: Task force advice and support In-Kind Giving: Product for medical centre and programme, approximate annual value 3,500 Volunteer Days: Various in paid time, including SB Consumer conference and SB Dublin on the companys employee volunteering Partners programme;
Outputs Community benefits 1,000+ children and family members benefit from Barretstowns programme annually (3,600 by end 1999): improved ability to cope with serious illness through focus on empowerment. Respite for rest of family during session Participants receive exposure to new skills in a fun but also educational manner advantageous for training and job choices in future SBs involvement in particular enables Barretstown to serve more children and families by investing in the human infrastructure of the organisation both at Barretstown and in each country served, raising awareness in hospitals, families and amongst healthcare professionals Business benefits Enhanced reputation for SB amongst peers, competitors and philanthropic service providers. Project seen as a model of corporate citizenship Staff development, through awareness, volunteering and fundraising activities. Enhances morale, teamwork, creativity, pride in company, community and diversity awareness Makes SB attractive to potential employees thus improving recruitment Consumer and employee feel good factor.
Other funds attracted by corporate donation e.g. American Home Products, Dublin Millennium Committee Use of SB corporate partnership as a model for all other potential corporate donors Barretstown Board member from SB has directly secured additional funding; Also SB employees across Europe run own fund-raising projects
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Inputs Leverage Also membership of Barretstowns Board of Directors
Outputs Community benefits Enables Barretstown to serve nonEnglish speaking communities thus increasing inter-cultural awareness and appreciation Enables Barretstown to improve constantly its programme through research projects and visioning process Business benefits
Longer term and wider impact: SB involvement and commitment has been crucial to Barretstowns international growth, and the impact on the children is potentially measurable. This may lead to reduced costs for public sector care agencies.
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Project: Type: Bosnia Paediatric Physical Rehabilitation Community investment
Description: This project aims to provide high quality cost-effective healthcare for children in Bosnia injured or neglected due to war by the establishment of three clinics and the training of therapists and therapy students.
Inputs Cash Funding for first two years programme establishment and rollout. 300,000 Agreed funding to continue development of self-sustaining programmes in two new locations for year three 150,000 Time Secondment of staff member as development director on a 24 month assignment, jointly funded by SB and Glaxo Wellcome. Management skill transfer: SB 10th anniversary day was used to set up a team from Category Management, Corporate Communications, Medical Marketing and Advertising Agencies to deliver a marketing and communication plan for HOPE UK: no measurable cost Leverage The involvement and support of SB is used as a key lever for introductions to other donors. SBs reputation for supporting well-planned and efficiently executed programmes helps focus other donors onto Project HOPE UK. Confidence in HOPE generates a broader donor base and moves established donors towards unrestricted cash in addition to gifts in kind. These unrestricted funds allow HOPE to plan proactively for emergency relief in addition to the long-term programmes. UK and other government funds have been attracted to HOPE by the reputation of SB as a key donor/supporter. Development of SB/Hope partnership is used a role model for establishing further relationships. Outputs Community benefits 1997 Established paediatric clinic in Kosevo. Government and Community awareness of paediatric rehabilitation raised in Sarajevo. Professionals trained at Kosevo clinic 1998 Collaboration with the Dom Zdravlja clinic in Ilidza resulted in refurbishment of a paediatric treatment room by HOPE/SB. Tuzla clinic identified, structured and equipped. First therapist arrived in December to conduct a needs assessment. 1999 Kosevo hospital clinic becomes completely independent, sustainability delivered. 75 children monthly receiving high quality healthcare and improved lives. Health Care Professionals in Bosnia are able to utilise the 7 libraries and training materials made available by SB/HOPE. 38 customised Orthotic devices manufactured in year 1 of local
Business benefits Staff development :secondee director develops wider experience of the healthcare industry at the customer interface. SB/HOPE associated with developing local skills (Orthotic device manufacture) and leaving a self-sustaining venture that supports healthcare promotion within a community. SB support of this and the product donation programme for other CEE based programmes widens the reputation of the company as a supporter of healthcare in all communities irrespective of financial wealth.
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operations. 7 Doctors, 17 Practising Physiotherapists and 155 students receiving medical training. 13 nurses and 16 caregivers receiving training at neo-natal intensive care units. 25 independence aids manufactured and distributed in the community
Longer term and wider impact:

Wider professional training scheme developed resulting in Orthotic device training, development and local manufacturing set-up in Sarajevo. This is a local self-sustaining effort and has added to the local economy. Nationalise the programme of clinical treatment and training centres to include Serb, Moslem and Croat populations Establishment of clinical treatment and training centres in Sarajevo, Tuzla, Mostar, Banja Luka and Bihac that are recognised by the Ministry of Health and medical schools Physiotherapists are trained by HOPE specialists to become trainers. These trainers are equipped with skills to allow them to train others within their own community. Full trainee programme developed including seminar delivery for medical professionals. Initiation of instruction at Sarajevos High Medical School SB/HOPE associated with the establishment of Paediatric Rehabilitation as a recognised discipline within the medical educational community in Bosnia Orthotic manufacturing success is a model for establishment of similar local ventures that become self-sustaining by linking delivery to the SB/HOPE programmes. HOPE is able to transfer the best practice of establishing local industry in support of funded programmes in Bosnia across to the other global programmes.
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Case study 7: Unilever

Project: Type: Investors in People in Schools Programme 1997-98 Community investment
Description: The Unilever sponsored Investors in People in Schools aims to help schools local to company sites attain the Investors in People standard. The programme was launched in 1997 in the belief that the IiP process, originally designed for business would benefit school s by providing a framework for staff motivation and development leading to improved pupil performance.
Inputs Leverage Unilever centrally: 100,000 for project management, provision of materials and provision of accredited trainers Unilever companies locally: In-kind support through accommodation, refreshments, etc for workshops - 12 company sites each hosted a fiveworkshop programme Time support through local company staff hosting and inputting to workshops Training and Enterprise Councils/Education Business Partnerships more willing to fund the assessment stage of schools aiming for IiP standard because Unilevers 18-months support programme increases schools commitment and their chances of success. Group companies willing to participate in national programmes which have a Unilever quality standard. Outputs Community benefits Unique partnership between Unilever centrally, its operating companies, their TECs/EBPs and local schools Out of 100 schools taking part in the Unilever programme in 1998, 30 had attained the IiP standard by the end of the year, and others were well on course. An independent evaluation showed the majority feels the IiP process has changed the culture of the school, resulting in greater staff commitment impacting on pupils educational attainment. Business benefits Major buy-in by companies to a programme in a Unilever focus area for education involvement. Enhanced reputation for Unilever companies in the local community. Enhanced reputation for Unilever nationally with education ministers and senior civil servants, Investors in People UK, TECs and Headteachers.
Longer term and wider impact: the independent evaluation found that achievement of IiP status is having a direct impact on pupil achievement, with nearly half those evaluated (46%) saying they can already see an improvement. Unilever believes it is achieving its wider business goals, and plans to expand the programme to more sites covering another 100 schools.
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Case study 8: Whitbread

Project: Type: Youth & Community Centre, Salford Community investment
Description: Whitbread has a strong trading presence in north west England and provides equally wide ranging community support. Following the construction of a Beefeater Restaurant and Travel Inn at Salford Quays, eight portacabins were donated through the Whitbread CARE (Community Action by Recycling Equipment) programme to provide a community centre in nearby Swinton.
Inputs Leverage In-kind support: eight portacabins donated media support from Whitbread PR agency support and refreshments for launch event IT equipment, TV and furniture Cash donations: 2,000 for foundations and services 1,250 for third party insurance, transport and crane hire expenses Whitbread involvement used to persuade other companies to support the project: transport company moved portacabins; crane hire company provided cranes and team of eight people; Barden Road Stone Company supplied 80x2.5 ton boulders to secure the area. Whitbread suppliers and contractors provided resources free or at cost: Readymix Concrete at cost; Master Fitters free installation; North West Water free connection. Salford Council also contributed 40,000 to the endeavour, with the national lottery granting 22,000. Sports Council funding of 75,000 for floodlit multi-sports facility was also helped by letter of support from a senior Whitbread director. Outputs Community benefits Creation of new local partnership which includes residents, councillors and the police. Saved 70,000 on building costs. Community centre provides activities for residents of all ages and groups. Examples include senior citizens (tea meetings, bingo, bowls), young mothers (daily nursery group), young people (sports activities including football and karate, youth club and regular discos). Crime prevention - over a two year period, criminal damage has been reduced by one third, robberies by half, burglaries by half, theft of vehicles by a third and cars burnt on estate from 14 per month to nil. Community spirit - residents worked together to create the centre; centre owned and managed by the residents; no vandalism of centre.
Business benefits Enhanced reputation in the local community local police comment Whitbreads involvement sends a really positive message to the local community. Improved image with movers and shakers in the area, particularly the public sector. Raised profile in Manchester area with press and media coverage of project. Established good relations with local police - police comment that it shows Whitbread is not just about making money, but prepared to put something back. Staff development: brought together a number of company people from different divisions and grades working on a common project; the feel good factor doing a worthwhile job; increased team spirit.
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Inputs Leverage
Outputs Community benefits Comments by residents - Previously never went out - nowhere to go. Felt afraid of leaving the house. Frightened of young people hanging about with nothing to do. Business benefits
Longer term and wider impact: in addition to the immediate impact in the local community, demonstrated by the crime reduction indicators cited above, the project has been used as a model by the local council to adopt a similar partnership approach in other areas, and another community centre has now been established. The local police officer most involved in the project has been promoted to be youth development officer for the whole of Salford as a direct result of the experienced gained in multi-agency support for community problems.
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Case study 9: BT
Project: Type: BT Swimathon 1994-1999 Community investment
Description: Now in its ninth year of BT sponsorship, the BT Swimathon has become the largest fundraising swim marathon in Europe. Held annually at an average of 500 pools, leisure centres and health clubs across England, Scotland, Wales and Northern Ireland, each year approximately 45,000 swimmers, including BT people, raise money for a carefully chosen partner charity.
Inputs Leverage Cash As sole sponsor, BT has paid 450,000 annually to the London Events Agency which owns and operate the event. Total amount paid over the period 1994-1999 - 2.7 million. Total raised through participant sponsorship over the six years 8,334,000. Additional 500,000 raised through BBC Blue Peter Childrens Swimathon. . Up to 45,000 participants each year give up their personal time to participate in the event and to raise money for charities. Outputs Community benefits Money raised each year goes to specific charities/projects, including: Medical research 1998 - Marie Curie Cancer Care for expansion of the NurseLink Project, a database to match specific patients needs with nurses in their area. Child welfare 1999 NSPCC to launch the Full Stop campaign providing new services and aiming to reach up to 100,000 children every year. Money was also used to fund a team of professionals trained to recognise and act on the signs of bullying, abuse and neglect. Wider benefits The event also encourages sport young people have the opportunities to develop self confidence and learn new skills. Business benefits Projects are chosen based on issues identified by stakeholders, with prospective charities required to submit proposals to ensure projects meet BTs corporate goals communications theme. BT Swimathon is now one of the largest events under the Community Partnership Programme and its coverage is a major input into BTs overall image and reputation. Publicity Over 1,300 items of positive publicity received through national and local media resulting in 107 million weighted opportunities to see in 98/99; 20% of public aware of BTs involvement with Swimathon. Recognition Winner of BITC Programme Impact Assessment Award; ICFM award for Most Effective Use of Events.
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Inputs Leverage
Outputs Community benefits Increased awareness among the 45,000 participants of social issues and on-going involvement in fundraising. 500 pools participating each year gain exposure through local media and pools become better integrated with the local community. Business benefits Brand reputation One of BTs well known and longstanding commercial initiatives: 78% of opinion formers believe BT takes seriously its responsibility to society and the community (increased from 52% in 1994. BT is third most recalled company seen to be active in CSR highest non retailer. Employee morale BT staff participate, generating positive feelings: 87% of staff consider that BT takes its social responsibilities very or fairly seriously.
Longer term and wider impact: From BTs perspective, BT Swimathon is now a key component of its long term reputation as taking social responsibilities seriously. The company considers that to be an critical component of its overall corporate reputation, important in an increasingly competitive but still highly regulated industry. The longer term impact of the fundraising depends on the effectiveness of the beneficiaries and has not been formally evaluated.
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Case study 10: NatWest

Project: Type: Board Bank Community investment
Description: Board Bank was launched in March 1996 to provide arts organisations with the opportunity to strengthen their boards with skilled business managers, and enable business people to become involved in the governance of arts organisations. The scheme is managed by Arts & Business, which promotes partnerships between business and the arts. The table below covers the inputs and outputs over three years 1996/99.
Inputs Cash donation NatWest contributed 105,000 (35,000 a year ) Leverage Nearly 600 business people from 321 companies have joined the programme, including 40 NatWest staff (NatWest has the most employees involved of any participating company). The business people plan and prepare for board meetings in their own time Levered cash resources to the programme are three times NatWests cash input, with contributions coming from other companies, central and local government, and arts funding sources. Outputs Community benefits 75 training sessions run for business managers wanting to join the board of arts organisations. 594 business people enthused, trained and made aware of wider issues facing arts organisations. 297 candidates have joined the boards of 267 arts organisations, with many more arts organisations to benefit from the pool of prepared business people. These arts organisations (including community theatres, bands, museums, dance groups) gain business support and networks. 80% of Board Bank members offer specific specialist skills such as marketing, legal and accountancy. Business benefits Independent research into how Board Bank members benefit from their board place shows: 98% of Board Bank members enjoy it; 92% gain new skills or knowledge; 77% gain increased confidence; 77% increase understanding of board duties and responsibilities; 71% learn new approaches to problem solving and new methods of creative planning; 72% improve their meeting skills. Positive profile gained in media and with government.
Longer term and wider impact: the expectation is that this infusion of business skills will help arts organisations to be more effective in meeting their own gaols, but this has yet to be formally evaluated. For NatWest, the expectation is that facilitating this sort of employee volunteering will beneficially impact the company, as staff apply their developed skills and greater motivation back at work. Formal evaluation of other NatWest involvement programmes has demonstrated that link.
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Case study 11: Unilever

Project: Type: Persil Colour Care / Red Nose Commercial initiatives
Description: In 1999, Persil worked with Comic Relief as part of its Red Nose Day 1999 campaign. Persil is a brand leader and the campaign helped reinforce Persils position as market leader via a high profile link with a leading charity. The partnership enabled significant funds to be raised for Comic Relief and raised awareness of the 1999 Red Nose campaign. It also raised awareness of the Colour Care variant, increased sales of Persil and built on the total brand image of Persil.
Inputs Leverage Cash donation 258,000 donation money raised from each special Red Nose pack of Persil sold. Availability of special packs communicated via TV advertising (with obvious benefit to Comic Relief too). Cost of telephone line to supply Go Red fund-raising packs. Time Activities arranged to enable employees to raise funds on Red Nose Day. Sainsburys was the official Comic Relief retailer in 1999. Lever worked with them to create high awareness of the campaign in stores around the UK. 3,000 raised by employees for Comic Relief on Red Nose Day. Go Red fundraising packs encouraged members of the public to get involved, helping towards the very considerable sums raised. Outputs Community benefits Money goes to projects in the UK & Africa. Raised awareness of 1999 Red Nose campaign through TV advertising and on-pack promotion. People encouraged to raise money for Comic Reliefs 1999 campaign through red-themed fund-raising. Business benefits 25% uplift on Persil sales. Raised profile of Persil and contributed to a positive effect on brand image. Helped raised consumer awareness of the Persil Colour Care variant and the benefits of using it. Raised employee morale at a time of significant change within the company. Made employees feel proud to work for a company which links with a good cause.
Longer term and wider impact: the partnership was designed to achieve short term business goals, but one legacy was a stronger brand for the company and community projects making a long term impact, especially in the developing world where the healthcare and other services provided reduce mortality and morbidity rates.
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Case study 12: Camelot

Project: Type: Project 16 - Minimising under-age sales of lottery products 1998/99 Commercial initiatives
Description: This project is a response to government, regulator and pressure group concerns about people under the age of 16 getting access to lottery products. It brings together Camelot staff, retailers, trading standards and other community agencies to act in concern to prevent under-age play. (Note: some of the inputs to this project were directly from the company to the network of retailers and not routed through the community partner.)
Inputs Leverage Operation Child Camelot publishes safeguards against under-age selling for retailers to use in their shops. Piloted in 1998/99. 37,000 of staff costs to investigate and follow-up failure to implement safeguards, to enforce the three strikes and out policy. A Dead Cert Youth Pack Funded the design, writing, publication and distribution of a pack for youth clubs and youth workers in the UK, via Gamcare, to promote responsible gambling through youth focused education. 7,000. Retailer vigilance campaign 22,800 (badges, safeguards, staff noticeboard posters, policy document, underage stickers) Provides prevention strategies for 35,000 retailers to implement within their business that prevent the sale of all age-related products. Camelots support of the prototypes of proof of age cards won support from local authorities, government agencies, schools and other organisations and gave momentum to the principle of proof of age cards The Validate card is now being extended countrywide. Refusal registers provide independents and smaller multiples with an audit process for recording refusals of all age-controlled products as well as a means of demonstrating due diligence as lottery sales outlets. Widespread distribution of the Citizencard pack lead to a 500% in applications for the card in the first two weeks Outputs Community benefits Provides protection for young people from potential problems with gambling The campaign is providing strong backing for the efforts of parents, police, retailers and other local agencies to prevent under age sales Local authorities and Trading Standards support the initiatives as they have a direct impact on all forms of under age selling in retailers including alcohol and tobacco Proof of age cards provide retailers of all age-restricted products (including tobacco and alcohol) a means to check peoples age before the sale, and therefore reduce illegal under age purchases Over 1 million instances of retailer refusal to sell age-related products are recorded by retailers per annum Business benefits Given Camelot a two-pronged approach to preventing under age sales: through preventing retailers from selling and through preventing young people from wanting to buy Lottery products Given Camelot a business procedure for recording retailer behaviour on age related projects Developed Camelots existing retailer training package against under age sales in a focused way Given Camelot a transparent and justifiable reason for the use of the ultimate sanction of lottery terminal removal for retailers who continue to sell lottery products to under 16s after three visits Ensures positive, partnership based, relationship with Trading Standards Officers
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Inputs Leverage Packs have been distributed throughout the country for use by youth workers
Outputs Community benefits Trading Standards have no power to undertake test purchasing in Scotland and therefore Project 16 initiatives are a form of policing for age-related sales that does not currently exist Via the youth pack A Dead Cert, young people receive information and support that enables them to make educated choices for themselves. Business benefits Enhances Camelots reputation within the local community (District council, Police, youth clubs) as a company who has a socially responsible approach and is willing to be pro-active about its responsibilities Developing perception of Camelot as leading edge on social responsibility by national pressure groups with concerns about the exposure of young people to lottery products Camelots best practice is being reported in the media, and applauded as the most pro-active of any business in relation to preventing under age sales MPs have contacted Camelot to support best practice Helped business minimise changes of being fined for breach of licence condition responsibilities
Literature and Research 3,800 for retailer handbook inserts and 5,000 for training video used at retailer training. Retailer panels/focus-groups 1,600. Research into underage purchasing 7,500 Refusal Register A register provided to all National Lottery retailers to record instances of refusal to sell National Lottery products. Cost 33,000 and 900 of staff time. Internal survey of retailers - 3,500 of staff time Support for Proof of Age Card Camelot has supported several initiatives in this field and put 49,000 into Citizen Card (proof of age card) for 12-21 year olds Work with trading standards Camelot has put 8,800 into test purchasing retailers in partnership with trading standards officers Management Costs 93,000.
Longer term and wider impact: Within the business, Project 16 has provided a strategic solution to a critical issue, part prevention and part cure, helping to establish Camelot as a leader in addressing social issues associated with its industry sector. Within the community, the initiative must have had considerable impact, given that one million instances of refusal to sell have been recorded and young people are receiving targeted advice on the issues. A survey of young people involved would reveal a range of impacts.
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Case study 13: United Utilities

Project: Type: United Utilities Venture Fund Commercial initiatives
Description: In 1996 United Utilities launched a 10m fund to help improve the prospects for small and medium sized businesses in the early stages of development, covering Greater Manchester, parts of Cheshire and Lancashire. A partnership between the private and public sectors and the European Union, this offers new or existing SMEs an additional source of equity finance. Managed by Innvotec, an investment management firm, it has a ten-year life and also provides business advice, access to information and active management help.
Inputs Leverage Cash: One off payment of 4 million towards the 10 million fund. Time: A UU employee has been seconded to help manage the fund for the last two years (approximate cost 22,230) The Group Finance Director is executive sponsor and sits on the Board of the fund In-kind: The Fund can call on UUs specialist resources when needed. UU involvement levered 6 million of the total 10 million project fund, including from the ERDF. Additional 15 million now attracted to SME support alongside the 10 million investment from UUVF Outputs Community benefits Direct 21 SMEs received investment in the range of 100,000 to 1,000,000 from September 1997 to June 1999, totalling over 6.5 million awarded to these projects to date 612 jobs have been created or maintained from the investment activities of UUVF Indirect Increased economic activity and employment in the region. Eight new business start ups and early stage financings. Contribution to government objectives including: job creation, improved SME access to private equity and venture capital and the commercialisation of academic research through private investment. Business benefits Positive media coverage including 18 regional/local newspaper articles, regional radio coverage of UUVF investment into Accrington-based Dale Polymers Limited, feature article in Daily Express finance and IT section. Access to local government as Government Office for the North West co-ordinates ERDF support. Dialogue with the Regional Development Agency. Leader of Wigan Borough Council is a member of UUVF board. Involvement with Campus Ventures business incubation services for Manchester Universities and leading academics.
Longer term and wider impact: the ultimate success of the Venture Fund in creating sustainable new businesses can only be truly assessed after several years, once a complete economic cycle has passed. In addition to new direct jobs created, indirect jobs, addition tax revenues and (from the companys perspective) extra demand for power and water services are all possible impact measures.
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Case study 14: Marks & Spencer

Project: Type: East Basildon Education Action Zone Commercial initiatives in the community
Description: A one hundred hour development assignment (staff skills development) to examine education action zone sponsorship arrangements and to design a strategy for implementation. If successful, the EAZ stood to gain 25,000 in private sector support and 150,000 in central government funds each year for three years.
Inputs Leverage Outputs Community benefits Sponsorship position assessed, found to be weaker than anticipated early action to put on track again to achieve target (250,000K pa x 3 years). Strategy designed: a framework set to meet basic obligations and prospect for exceeding them. New contacts identified for follow-up. Enhanced capability of director to build on relationships through focused approach. Skills developed and transferred effectively. Business benefits Engagement with public services better understanding of issues regarding the preparation of future workforce and customers. Local press coverage. Clear demonstration of skills: organisation; influencing; presentation.
Time
100 hour development assignment, estimated national cost 2,000
New partner encouraged to join (PricewaterhouseCoopers) Good relations restored with possible funder Cleanaway Pitsea Marshes up to 40,000 pa Marks & Spencer donation (local) 500 If sponsorship target of 250,000 reached, 750,000 will be levered from DfEE
Longer term and wider impact: the ultimate success of the development assignment is not just whether the funding package is eventually secured but whether the EAZ is thereby enabled to transform education achievement in its area. From the business perspective, the skills and experienced gained could be tracked through to career development, promotion and ultimately contribution to business performance.
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Case study 15: BT Mobile

Project: Type: BT Mobile/Whizz Kidz Commercial initiatives in the community
Description: Run over a three month period, BT Mobile/Whizz Kidz was a cause-related marketing partnership where BT donated 4 for every new connection to BT Mobile by BTs business customers. The donated money was used towards the purchase of up to 20 specialist wheelchairs.
Inputs Leverage Cash donation Total contributed: 55,000 50,000 from BT Mobile / Community Partnership Programme. A further 5,000 spent on promotional material. In-kind BT also provided conference rooms for two Whizz Kidz events. Outputs Community benefits Provision of mobility aids to 20 children with a range of disabilities. Increased profile of Whizz Kidz as a charitable organisation. Business benefits Sales Improved sales of Mobile phones for the quarter by 25%. Achievement of objectives Increased awareness within BT of the benefits of Cause-related Marketing. Publicity Project achieved national press coverage of one million weighted opportunities to see. Recognition Project was used by BITC in causerelated marketing case studies. Brand Image Direct mail to 175,000 customers increased awareness of BTs role in the community.
Longer term and wider impact: this project was not established to achieve long term impact for BT, although it will have helped build and sustain BT Mobiles brand image. For the charity, the impact is the boost to the life chances of the 20 young people.
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The complete volume

Companies in communities: valuing the contribution and assessing the impact

How to use this guide

Companies in communities: valuing the contribution and assessing the impact

LONDON BENCHMARKING GROUP

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Why better recording and reporting matters

Companies in communities: valuing the contribution and assessing the impact

Tips for smaller companies

Companies in communities: valuing the contribution and assessing the impact

LONDON BENCHMARKING GROUP

Section 2. Summary of the LBG model

Companies in communities: valuing the contribution and assessing the impact

Section 2 - Summary of the LBG model

What is corporate community involvement?

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

What is meant by community?

The London Benchmarking Group model

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

The LBG input/output matrix

Companies in communities: valuing the contribution and assessing the impact

Inputs cash time in-kind

Impacts changes in attitude, behaviour or status

A simple demonstration of the full model in action

Outputs the number of beneficiaries helped

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

LONDON BENCHMARKING GROUP

Section 3. The model in detail applying the input model

Companies in communities: valuing the contribution and assessing the impact

Section 3 - The model in detail applying the input model

Companies in communities: valuing the contribution and assessing the impact

Step One - establish baselines

Companies in communities: valuing the contribution and assessing the impact

Step Two - collecting the input data

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Hot tips for improving data collection

Step Three - ensure the quality of the data

Step Four - categorise the data

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Figure 2 Examples of categorisation in higher education

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

Presenting the data

Companies in communities: valuing the contribution and assessing the impact

Companies in communities: valuing the contribution and assessing the impact

The effects of using the inputs model

Companies in communities: valuing the contribution and assessing the impact

GrandMet 3 SmithKline Beecham BT Marks & Spencer IBM UK Whitbread Totals