Unlocking Value: Why Investors Should Champion Corporate Volunteering in 2024

In an era where the global business landscape is continually evolving, investors are increasingly recognising the transformative power of corporate responsibility. As we step into 2024, the call for a more socially conscious approach to investment has grown louder, with a spotlight on initiatives that extend beyond the traditional bottom line. One such initiative gaining momentum is corporate volunteering. In this article I aim to shed light on the symbiotic relationship between corporate volunteering and investment success, delving into the reasons why investors should champion this initiative, from enhancing corporate reputations and attracting top talent to fostering sustainable growth and mitigating risks.

1. The Ripple Effect: Benefits for Companies

a. Giving Back and Building Reputation

When companies actively engage in volunteering within their local communities, they create a positive impact. By participating in community initiatives, companies build goodwill, enhance their reputation, and strengthen their social licence to operate. Imagine a tech start-up organising a coding workshop for underprivileged kids or a fintech firm supporting financial literacy programmes. These actions resonate with stakeholders and foster trust.

Increasingly, with measures such as the Procurement Act 2023 making “public benefit” a core part of public sector tender requirements, giving back is less of a nice to have, and more of an essential requirement to winning work. And with a possible Labour government on the horizon, this trend is only likely to accelerate. 

b. Team Bonding and Communication Skills

Volunteering brings teams together, an increasingly vital exercise in the era of hybrid and remote working. When employees collaborate outside their usual work tasks, they bond over shared experiences. Whether it’s planting trees, serving meals at a shelter, or mentoring students, these activities break down silos and improve teamwork. Moreover, volunteering hones communication skills. Employees learn to adapt their communication styles to diverse audiences—essential in today’s interconnected world.

c. Enhanced Productivity and Motivation

Research suggests that employees who volunteer are more productive and motivated. When individuals contribute beyond their job roles, they experience a sense of purpose. This fulfilment spills over into their work, leading to increased efficiency, essential to developing a competitive edge, as the UK grapples with low productivity.

Imagine a software developer is given the opportunity to develop their teaching skillset by introducing coding to kids. That same developer brings fresh ideas and renewed energy to the office.

2. VC Lens: Benefits for Investors

a. Risk Mitigation and Long-Term Vision

Investors invest in companies with growth potential. When these companies actively participate in community service, it signals responsible management. Why? Because community engagement reflects a long-term vision. Companies that care about their surroundings are likely to make sustainable decisions. As an investor, you want your portfolio companies to thrive not only financially in the short term, but foster relationships and generate the positive PR required for long-term growth.. Volunteering aligns with that vision.

b. Talent Attraction and Retention

Talented individuals increasingly seek purposeful workplaces. Companies that prioritise volunteering attract top talent. Imagine a start-up competing for skilled engineers. If one company offers opportunities to volunteer at local schools or environmental projects, it becomes an appealing employer. Additionally, existing employees stay loyal when they see their company making a difference. Investors  benefit indirectly—higher performing  teams lead to better business outcomes, and reduce recruitment and training expenditure

3. The 2024 Imperative: Why Now?

a. Stakeholder Expectations

In 2024, stakeholders—whether customers, employees, or investors—expect more from companies. They demand transparency, social responsibility, and authentic engagement. Companies that ignore these expectations risk reputational damage. Investors  recognise this shift. Investing in companies that actively contribute to their communities safeguards against future controversies.

b. ESG Metrics and Reporting

Environmental, social, and governance (ESG) metrics matter. Investors increasingly evaluate companies based on their ESG performance. As of 2021, a third of all professionally managed assets, or roughly $30 trillion, were subject to ESG criteria, a figure which is only likely to have increased. . Investors can use ESG data to assess risk and make informed investment decisions, but as data comes under greater scrutiny and legislative pressure, it’s vital it can be relied upon. At Neighbourly, we’ve created social and environmental impact dashboards that help clients measure and report on their community activity accurately, with easy-to-share formats for internal teams and external stakeholders

4. Getting Started: Practical Steps

a. Assess Company Culture

Evaluate a company’s existing culture. Does it encourage volunteering? If not, consider introducing policies that support employee volunteering during work hours.

b. Build a Charity Engagement Strategy

Maintaining strong relationships with relevant causes is critical to building a successful volunteering programme. If your portfolio represents SMEs based in single locations, it may be possible to forge relationships independently, but for maximum efficiency for medium and larger businesses, it’s often better to work with a trusted partner like Neighbourly that surfaces the needs of a network of over 30,000 vetted causes across the UK and Ireland. 

c. Measure Impact

Set clear goals for community involvement. Tracking metrics such as volunteer hours, projects completed, and community feedback is an important step, but to achieve positive community and business outcomes, it’s vital to understand the impact of activities. How has the community benefited long-term? What effect has the activity had on staff morale and retention over a year? Have activities changed the perception of the business?  

As an investor, you are in the  unique position of being able to access insights across a portfolio of businesses, and learnings will be most valuable when shared throughout.

d. Communicate Internally and Externally

Share success stories within the company and with external stakeholders. Highlight the positive impact of volunteering efforts.

In 2024, corporate volunteering isn’t just a nice-to-have—it’s a strategic advantage. As an investor, champion companies that embrace community service. Their success will ripple through society and your investment portfolio alike. 🌟🤝🌍

Remember, the best way to get started is to take that first step. Drive initiatives through your r portfolio to engage meaningfully with their local communities, rather than one-off gestures The rewards will be worth it! 🚀