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Can helping your community boost your Start-up

When Covid-19 first hit and people rushed to the shops to panic buy stocks for the coming pandemic, there were viral social media trends that emerged for all the wrong reasons. In one example, an organisation had chosen to mark-up Lysol wipes to unaffordable level, for which social media was outraged and the brand damage was complete as the company locked their Twitter account.

Conversely, many other companies and start-ups turned themselves to helping their local communities, as it is the right thing to do. The added benefit, though, is the boost to the brand that arises from good corporate stewardship that strives for a shared value, rather than focusing on shareholder value only. Apart from the good that is derived by following through with “We are all in this together”, which is better for your brand: Added Trust and Integrity, or a closed social media outlet due to consumer outrage?

Famously, companies like Labatt and Canada Goose reshaped their production lines to produce hand sanitizer and medical scrubs, respectively, which helped keep key industries on their feet, and their own employees safely employed. Shipfusion partnered with some of its clients to provide complementary services for a variety of organisations and front-line workers across Canada and the United States, while the press covered their every move.

This warm glow of appreciation is particularly prevalent when it comes to small start-ups who pitch in to aid their communities. According to BusinessTown, pitching in around the community can also get a start-up noticed, where perhaps the town did not know them before.

“Working with a non-profit can expand your audience and raise your brand’s profile. If you sponsor a charitable event such as a fun run, your brand name can reach people who might not have been aware of it before. It can also foster respect for your company since it is involved in a worthy cause,” explains the business coaching company.

Helping during a crisis such as Covid-19 has also been shown to boost employee morale at a time when they may otherwise feel extremely helpless or incapable.

The benefits of serving your community are clear, and good corporate stewardship should enhance your brand, as opposed to those that solely pursue the almighty dollar, but the choice is not always an easy decision to make. Start-ups need to be vigilant in how they can support their community beyond just cash donations, to avoid finding themselves on the receiving end of the necessary support to stay afloat.

“These admirable efforts come with a real cost,” says Darren Dahl, a business economist and professor of marketing at the University of British Columbia,

“Spending resources on good deeds can eat into revenue, which can exacerbate the problems experienced during a decline in sales.”

Dahl says start-ups need to make “a strategic trade-off” when deciding how much help to offer. “You want to be doing these things. It’s the right thing to do,” he says, “but you don’t want to also go bankrupt”.

Nicholas Coburn, President of Strata-G, agrees, saying the most important thing about helping your community is that it must be authentic.

“Helping out your community is essential for all of us picking up the pieces, and not for what is in it for me,” Coburn explains. “None of the perceived benefits of charity during a crisis will ever materialise if the company and its employees are not genuine in their desire to help out.”

In the end, these sorts of events are the perfect time for companies to reassess their priorities and for those at the top to evaluate important aspects of company leadership such as employee welfare and inclusion. Ultimately, initiatives borne out of positive corporate stewardship are as important as managing the bottom line, not only because it’s good for everyone who may come in touch with the company, but because it also happens to be good for the company itself.

Nicholas Coburn

Nicolas Coburn, CPA, CA, has 15+ years of experience spread across Government Audit, Industry Financial & Tax Reporting, and Big 4 Canadian Accounting Firms.