This week was a tale of two events that underscored a tension many people in the corporate social responsibility (CSR) world face – are we in philanthropy and humanitarian assistance or are we in development?  Are we giving out fish or are we teaching people how to fish?  Are we prioritizing business or society?   How can we do both most effectively?

On Tuesday, I went to New York to attend the Committee Encouraging Corporate Philanthropy’s Award Dinner recognizing the work of Western Union, Liquidnet, and the Boys and Girls Clubs of America.  Then on Wednesday, I flew down to Raleigh to sit in on the International Association of Science Parks  conference – a highlight of which was IBM Foundation president Stan Litow’s presentation about encouraging science and technology tools for economic development.

When I talk with government and non-profit partners, they tend to want assistance with their agendas.  They tend to begin by asking for assistance with schools or hospitals or refugees or climate change for a particular region or demographic, and then they try to work backwards from the social cause to get to the business case.  “Working on X disease is not just socially responsible; it’s good for workforce productivity.”  “Working on climate change reduces waste and increases energy utilization.”

But if you start with the social cause as the premise, in the minds of many executives, you have crossed over into the land of philanthropy and altruism, which annoys some CSR practitioners to no end.  This is particularly true in the European context, where many people have worked diligently to associate CSR with corporate operations, and not financial support for external causes.

Be that as it may, as long as the starting point is society’s interests first, any project in this space will be treated differently within the company, than if the starting point is the company’s interests first.  This reality may not sit well with some advocates, nor is it true of every company, but as a general rule, it’s a good place to start.  The funny thing is that if you start from this premise, there can be all kinds of social benefits and the company’s engagement will be much more intense and enduring.

Whereas assistance gets written off as at best, contributing to corporate good will, development is associated with growth and wealth creation. 

Cisco, Microsoft, Intel, and IBM will tout the charitable benefits of their literacy, numeracy, and computer training programs, but we all know that a rising tide of knowledge will lift all of their boats financially as well.  Why do you think so many Chicago companies have bought into the 2016 Olympics campaign and other projects to make Chicago more attractive?  They know it will enhance their competitive position vis-à-vis other companies in their industries that don’t have the good fortune to be based in Chicago.

CNN, Coke, Delta, UPS, and Home Depot have helped to transform Atlanta and make it a desirable destination for human talent and additional investment.  Memphis and Tampa may be in different places, but they both want to travel the same curve.

This understanding builds on Michael Porter’s idea that how companies interact with their external environment can affect their competitive position.  When companies conduct SWOT (strengths – weaknesses- opportunities – threats) analyses, they tend to emphasize their strengths and weaknesses – the things they can control like their customer service, their marketing, inventory, or financial management.  OTs (opportunities and threats) are tougher to manage because by definition, they are outside of the company’s direct control, but in a way, this is why development matters for business: it helps create a better external environment in which to operate. 

The public and private leadership of Raleigh-Durham instinctively underwent this process 50 years ago with the establishment of the Research Triangle Park.  Back then, North Carolina ranked 49th in per capita income.  It was primarily a rural, agricultural state known for tobacco and textiles.  The park was founded by a consortium of government, university, and business interests, and is now the largest research park in the U.S., and a primary engine for the growth and development of North Carolina.  By leveraging the environment, the education system, and the will of the political, academic and business leadership, and by creating a vision of what progress could look like, there are now 170 R&D-related organizations including major installations for IBM and GlaxoSmithKline in the 7,000 acre park, and it employs over 42,000 people earning well-over the national average in income.   Emergent and enlightened companies like SAS Institute and Biogen Idec reinforce this virtuous cycle.

I was impressed with RTP and the leap frog philosophy embodied by it and other science parks.  This was a true example of thinking strategically about the future, and not just helping out people at the margins.   However, I can just imagine how some advocates must have felt at the time…”you want to build a research park?  We’ve got poor people here who can barely read!”

The role that the Raleigh-Durham business community played in this success story is one that many companies aspire to emulate.  They want to move from assistance to development, from giving out fish to creating conditions that enable more fish to be caught, and from philanthropy to investment and transformation. 

The companies that CECP honored on Tuesday are part of this process.  Western Union is strengthening cross-border connections and spurring global development.  Liquidnet is investing in Rwanda, building community assets one drinking well at a time.  Boys and Girls Club in partnership with the Schwab Foundation is investing in financial literacy throughout the country.

We’re witnessing a major trend that no one has articulated philosophically.  It’s just happening.  It’s a good thing, and we need to look at ways to enable this transition of focus away from assistance and toward development so that we can celebrate many other community transformations like Raleigh-Durham’s 50 years from now.