The company I approached for a grant this week asked for information to confirm that my charity operated in accordance with corporate socially responsibility. We exist for public benefit and are not a corporation in that sense, though we are incorporated. Is it ethical for them to ask, and should we respond?

First, if you are asking a company for some of their money, it is not only ethical but also prudent of them to learn more about your charity. It would be unethical if they asked for something like a list of clients, as that would violate privacy, but organizational information is reasonable. If the information they request is not readily available, you can decide how much effort to put in based on the size and likelihood of the grant.

Second, companies are being pressured, primarily by non-governmental organizations, to be and to report on corporate social responsibility (CSR). They are starting to expect such reporting from partners, but they should recognize the different scale on which charities operate and the reduced resources available for data collection and reporting. Check www.globalreporting.org for information on how companies report on CSR.

Third, while the terms corporate social responsibility or corporate responsibility (there is no difference) have been applied mostly to for-profit companies, many governments and some nonprofits are realizing the concept can and should apply to them.

My definition of CSR is, “an organization accepting accountability for the environmental, economic and social impacts of its decisions and actions.” The concept is inextricably linked to and entwined with sustainability.

Environmental sustainability is about nature. If our planet is not sustainable for us (that is, if the air, water, food supply and climate do not support human life), the benefits our charities are trying to achieve will likely have little importance. All charities can take steps to reduce their environmental footprint, such as making annual reports available online rather than giving everyone a printed copy (this can also save a lot of money!). Consider the environment when making decisions about fundraising events, purchases, facilities management choices, and more. Ask the environmental charities in your community to help you find green suppliers. In my community, for example, progressive organizations are choosing Bullfrog Power for lighting and electrical needs and using environmentally-friendly cleaning products.

Many charities are focused on economic sustainability, through helping clients gain skills, find employment, access microcredit, and build stronger community economies. But every nonprofit has to consider organizational sustainability too. How can we survive long enough to achieve our mission? We do not want to leave our clients without needed services, or our initiatives half-done. We are accountable to the community for using its resources (money, volunteer time, foregone income tax on revenue, gifts in kind) to provide effective, sustainable programs, at least until the need in question has been addressed. An advocacy coalition formed to fight a specific piece of legislation will have a shorter lifespan than a program to help people obtain supportive housing. We have no shareholders, but we sure have stakeholders.

Social aspects that apply to charities include how we deal with reserves – does your charity choose social investments? Do you assess the impact on the community before opening a new location or winding down a program? Do you consult stakeholders when planning, and truly listen to their concerns and ideas? Have you trained your employees in anti-corruption policies? (Yes, nonprofit staff can be offered or seek a bribe; they need to know this is not acceptable.) Do you have good health and safety measures in place for staff, volunteers and clients? Are your programs effective in achieving desired outcomes, and described truthfully in your marketing materials? Do you carry through on your commitments to sponsors and grantmakers?

A charity can demonstrate its CSR by addressing all such areas that are relevant in its annual report, or in supplementary reports. Many of the global indicators or metrics are specific to companies, but many are not or are easily adapted. Many are easy for charities to answer; it is unlikely your charity uses forced labour or manufactures unsafe products.

Annual reports that give an entirely rosy picture of the year are rarely believed in the CSR world; the issues are too difficult for people to accept that everything went well. If you found that the t-shirts for your volunteers were produced using child labour, admit it and say how you will avoid having that happen again. At least you found out, even if after the fact. If your wonderful fundraising event disrupted traffic and angered the local neighbourhood, then again, admit that you will have to try harder in future. As with any other meaningful change, have a plan and set priorities; you cannot do everything at once.

Charities have considerable purchasing power in total. If all the large charities like hospitals and universities used that power to reward companies that demonstrate CSR, companies would have more incentive to implement CSR principles. But even small organizations can effect change in their community by choosing which companies to ally themselves with. Your goodwill matters.

To get back to the request from the company, admit that you do not yet have a CSR report to give them, but tell them what you readily can. Surely you at least recycle paper and seek to reflect the diversity of your community! Consider asking for the company’s help in developing better CSR systems for the future.

Since 1992, Jane Garthson has dedicated her consulting and training business to creating better futures for our communities and organizations through values-based leadership. She is a respected international voice on governance, strategic thinking and ethics. Jane can be reached at jane@garthsonleadership.ca.

To submit a dilemma for a future column, or to comment on a previous one, please contact editor@charityvillage.com. For paid professional advice about an urgent or complex situation, contact Jane directly.

Disclaimer: Advice and recommendations are based on limited information provided and should be used as a guideline only. Neither the author nor CharityVillage.com make any warranty, express or implied, or assume any legal liability for accuracy, completeness, or usefulness of any information provided in whole or in part within this article.