No one exists in a bubble in 2022, as every consumer, investor, and business contributes to the world financially and environmentally.
Today, 70% of American consumers believe it’s “somewhat” or “very important” for companies to contribute to society positively. Naturally, many corporations have adopted Corporate Social Responsibility (CSR) initiatives.
CSR initiatives see businesses creating value for local communities in many ways, including reducing their environmental impact, funding local community groups, or doing “on the ground” work like planting native species.
Running a CSR initiative can be very rewarding, but it also comes with challenges. One of the biggest challenges concerns measuring the value of CSR initiatives.
That’s what this article will focus on. We’ll cover fifteen key performance indicators (KPIs) that can help you evaluate your CSR initiatives and several tips to help you get the most from your measurements.
Why you need to track your CSR initiatives
When discussing CSR initiatives, you likely use the phrase “give back” a lot. To truly understand why you need to track your CSR work, let’s add another word to that phrase and make it “give back efficiently.”
Monitoring your CSR programs will help you give back efficiently because:
- It helps you reduce unnecessary costs
When you monitor where your money goes, you can reduce the amount you spend on things that don’t further your charitable work. Reducing this spending is vital, as you can divert the funds into new projects.
- It helps you make changes in the right places
Monitoring your CSR programs with metrics allows you to determine what “works” and what doesn’t. Naturally, you can use this data to drive your CSR initiatives so that they meet the needs of your community.
- It helps you prove the value of your program to others
Measuring the impact of your CSR work can help you prove the value of your programs to managers, investors, and donors. When people understand the value of your work, they are more likely to invest generously.
How to track your CSR efforts
Now that you know why you need to track your CSR efforts let’s cover the “how.” Here are fifteen KPIs to track your CSRs with:
- Customer retention rate
Your customer retention rate is the percentage of loyal customers your business keeps over time. As 77% of consumers want to buy from companies that work to make the world better, tracking your retention rate can help you understand how your CSR work influences your brand’s customer experience.
Use this formula to calculate your retention rate:
If your retention rate increases, your CSR work may be winning you the respect of customers.
If your retention rate decreases, your CSR work may negatively impact customers (though you should always consider other factors like poor customer service, a drop in product quality, or external economic factors as well).
- Net promoter score
Your Net Promoter Score (NPS) is a metric that compares the percentage of your customers that actively promote your businesses to those who would encourage others who would choose a competitor.
To calculate your NPS, ask a random selection of customers “on a scale of 0 to 10, how likely are you to recommend (brand) to a family member, colleague or friend?”
Then, sort people into these categories by their answers:
- Detractors = who scored 1 – 6
- Passives = who scored 7 – 8
- Promoters = who scored 8 – 10
When your NPS changes, it’s a good sign you have influenced the opinion of the majority of your customers. Thus, it’s a good metric to watch to see the impact of your CSR initiative over time.
- Qualitative customer feedback
Your customer retention rate and NPS are great KPIs, but numbers can’t tell you everything. Seeking qualitative feedback about customers’ thoughts, experiences, and feelings can help you understand how your CSR work impacts customers as individuals.
To get this feedback, send customers a survey that asks how they feel about each of your CSR initiatives. Then, use opinion mining to analyze the responses. Opinion mining is a Natural Language Processing (NLP) technique that uses an algorithm to look for positive, neutral, and negative feelings within the text.
You can learn about opinion mining in our webinar “Opinion Mining and Sentiment Analysis.”
- Rate of reduction of water and energy use
If your organization is working to reduce the amount of water and energy you use, you can track your progress by comparing your usage week-on-week, month-on-month, quarter-on-quarter, and year-on-year.
The easiest way to do this is to ask the person who pays your water and power bills to record the ounces/liters of water and the number of kilowatt-hours (kWH) you used. Then, use this formula to calculate the rate of reduction between periods:
- Year-on-year number of trees planted
This one is very straightforward. If your company has a large campus, owns a lot of land, or does restorative environment work, monitor the number of trees, shrubs, and bushes you plant annually and compare that figure year on year.
- Ratio of recycled material to waste
Recycling prevents pollution, reduces the amount of waste in landfills, and preserves resources like energy, water, and oil.
One of the best ways to assess the impact of your recycling efforts is to compare how much you recycled to how much you sent to landfill. To compare these, measure the weight of your recycling and waste each time you empty your bins. Then, calculate the total weight of waste and recycling for a set period and compare them.
You can measure this metric for your whole company, a single office, or for a single CSR event or initiative.
- Percentage of profits given to the community
You can show how much your company has invested into CSR by tallying up how much money you’ve donated to a CSR initiative. However, this figure doesn’t always account for operational costs (as many companies prefer to keep this data private).
To include these costs neatly, calculate the percentage of profits your company returned to the community. You’ll need two figures for this:
- Your profit for the period you are measuring
- How much you contributed to CSR programs directly and indirectly
Then, use this formula:
- Number of community organizations helped
This is another easy KPI to track. Simply count up all of the community organizations you donated to, supported, or worked with during a set period.
- Qualitative community feedback
Measuring charitable work is different from measuring the success of a marketing or sales campaign, as you can measure how much money you gave, but not the money’s impact.
Collecting community feedback is a good workaround for this problem. Community feedback can tell you how people perceived your CSR work, how your CSR work impacted them, and how they feel about it.
To collect high-quality community feedback, survey 20 – 100 people from your local community (your “sample”). Make sure you include people of different ages, backgrounds, and relationships with your CSR work, so you get a diverse range of answers.
If you need inspiration for questions, try these:
- Do you feel like (project) added to your local community? If so, how?
- What would you change about (project)?
- Did (the project)’s outcome meet your expectations?
- Where would you like to see (project) go next?
- Do you have anything you’d like to say to (project)’s team?
- Number of participants
If you need to measure the value of a single initiative, project, or program, monitoring the number of people participating is vital. Your attendance figure helps you determine if you have enough people to complete a project and if your employees and community feel your initiative is worth their time (especially if they are volunteering!).
Additionally, you can use this figure to identify events with fewer participants. Spotting these events will help you find out why people aren’t attending so you can fix the issue.
- Value provided month-on-month
Figures like the percentage of profits given to the community measure what you invest into CSR, but not what the community gets back. You can track the output of your initiative by measuring your key deliverables (or the “thing” beneficiaries of your initiative receive).
The deliverable you measure will depend on your project, but here are some ideas:
- Quantity of donated items (like the number of computers PC’s for Kids gave recipients)
- Number of people helped (like the number of consultations Her Justice had with program participants)
Alternatively, you can measure your program’s output by individual successes. For example, a job coaching program might measure success by the subjective experiences of the people who used it to get a job.
- Employee satisfaction rate
Research from the journal Employee Relations shows that CSR initiatives make employees happier in their positions. Naturally, tracking your employee satisfaction rate can help you monitor how employees respond to your CSR work.
To calculate your employee satisfaction rate, anonymously ask your employees to rate your company on a scale of 1 – 10 based on their happiness and contentment. Then, sort your employees into detractors, passives, and promoters based on their scores. Detractors scored 1- 6, passives scored 7 – 8, and promoters scored 9 – 10.
Subtract the percentage of detractors from the percentage of promoters to get your employee satisfaction rate (sometimes called “employee net promoter score” or “eNPS”).
- New hire success rate
Your new hire success rate is the percentage of employees who stay with your company after a set period (usually 45 days or three months). While many employees leave over management disputes, job demands, and other factors, “culture” is a key reason many people quit.
As your CSR programs contribute to your culture, monitoring changes in your new hire success rate can help you understand how your employees feel about your company’s CSR work.
Note: when calculating your new hire success rate, don’t discount people who changed roles within your company. Instead, list them as “successes,” as they stayed with the brand.
- Percentage of employees participating in CSR programs
Another fantastic way to understand how employees feel about your CSR efforts is to calculate the percentage of employees participating in your CSR programs. To get this figure, tally the total number of people who participated in at least one program and apply this formula:
- Rate of return for employees participating in CSR initiatives
Finally, you can measure the rate at which employees who participated in a CSR initiative returned to help with another project. This metric will help you understand whether employees view the project as a good investment of time and a fun experience, as very few people would volunteer for a project they hated.
To calculate your rate of return, track how many projects each employee has signed up for. Then, apply this formula:
How to get the most value from your KPIs
Now that we’ve covered fifteen CSR KPIs, you’re ready to put them to work. So, here are three tips to help you get the most from them.
1 Align your KPIs with your goals
KPIs can’t help you measure your progress towards your goals if they aren’t aligned from the start.
To align KPIs and goals, use the SMART goal format. The format lays your goals out, so each goal is Specific, Measurable, Achievable, Realistic, and Time-Bound.
While you can alter the goal to your needs, the easiest way to set a smart goal is to use the format: “by (date/ time), our (project) will (metric).” For example, “by the end of March, our PCs for Kids program will give 12 laptops to children in the Southside region.”
2 Be specific
Every CSR initiative and brand management strategy is different, so naturally, you’ll get the most from your KPIs if you personalize them to suit your programs.
To adapt the KPI, adjust the measurement period and the scope of the metric as needed. For example, you could limit the “number of community organizations supported” metric to include organizations within 100 miles you gave over $1000 to in 2021.
3 Choose financial and non-financial KPIs
While choosing only qualitative or quantitative KPIs may seem tempting, using a combination is wise. Leveraging both will help you understand the financial and numerical side of your CSR work as well as the experiences, feelings, and thoughts it inspired in recipients and participants.
Thus, you’ll gather a more rounded perspective on your work.
Be smart and track your CSR KPIs with BI software
Sales, marketing, and HR analytics aren’t the only things you can measure with KPIs. KPIs can help you track your CSR programs’ financial, community, and environmental impact. In turn, this can help you:
- Reduce CSR costs
- Prioritize projects that have a positive impact on the community
- Justify the value of your programs to others in your company
If you want to be innovative and monitor your CSR strategies quickly and easily, use ClicData’s BI software. It allows you to utilize over 200 data connections, create dashboards, sort your data by team or person, and collaborate with coworkers.