SMEs: the mini “secret millionaires” in every community

It’s no secret that SMEs make up more than 99% of all UK businesses and support around 60% of the UK’s private sector workforce, so there can be no arguing about the positive economic value every SME adds.

However, what is often overlooked, even by SMEs themselves, is the incredible contribution that the SME sector makes too charitable and community causes.

SMEs are a cross between good Samaritans and magicians when it comes to engaging with their communities. Most are driven by their owners’ personal values structure to support community causes and they adapt with ease to the requirements of volunteering, fundraising or other activity. This is because SMEs want to make a difference, believe that it’s the right thing to do and are not driven by profiteering, and because of this, SMEs across the country can work real magic.

The public and, consequently, customers have become, at best, numb to big business PR spin in the race to be seen as the most caring and dedicated company in their market. There can’t be many people left that really believe corporates engage with the community because they care.

This isn’t to say that there aren’t business benefits for SMEs to working alongside their communities, it’s just that usually SMEs don’t always recognise them or make the most of them. The business benefits to the SME and the societal economic contribution of these small business-driven, socially responsible activities are so often unrecognised. As these types of activities are rarely given the recognition they deserve, the ‘programme’ of activities undertaken by an SME is often unstructured, the benefits not evaluated and the real value for all parties is then ultimately not established, let alone publicised.

When most lay people think about corporate social responsibility (CSR) programmes or charitable giving, they tend to think that these activities apply solely to larger companies, but this is far from reality. Most small businesses recognise that engaging in some form with their communities, acting ethically and being socially and environmentally responsible is worth it on both a personal and professional level, and that actually it’s just all part of our normal working day.

The Federation of Small Businesses’ (FSB) Social and Environmental Responsibility and the Small Business Owner report in 2007 illustrated that 92% of all respondents considered their business socially responsible, with many business owners referring to their activities as just ‘good business practice’, so there’s no doubt that as SMEs we are keen to make our mark in this area.

However, a study published in May 2013 supported by the Joseph Rowntree Foundation and delivered by Tom Levitt and Sector 4 Focus entitled The Social SME, that evaluated how small firms related to and engaged with their communities, found that ‘there is little in the way of strategic planning in employee and company engagement with communities in SMEs and SME networks are small and do not prioritise these issues.’

In the past I have been guilty of a lack of planning and evaluation of these types of activities, letting my personal desire to help and support certain causes take over my time – and business productivity – but after four years in operation, I believe that at Prescient Power we now know what activities work for the community, as well as what activities work for us. Structuring these activities into a more formal programme has helped us increase the quality and quantity of our support, as well as the benefits that our business can derive from the process.

When I first founded Prescient Power in 2009, my aim was to create a truly ethical business and recruit a team that reflected those values. As part of this value structure, I have a strong desire to be heavily involved in my local community and therefore a natural progression is for my business, and our employees, to contribute these causes too. We now have a detailed, structured programme of support that is of benefit to the business, the local community and local economy, and covers four key areas:
1. Financial contributions: We donate 10% of our post-tax profits (after dividends) to the Climate Justice Fund and we sponsor our local cricket club.
2. Volunteering: I am a STEM ambassador, and within our company we have employees that hold school governorships, carry out conservation work and work within town partnerships, amongst others.
3. Training & mentoring: We work with the schools near our head office to encourage awareness of the commercial world and by delivering STEM (Science Technology Engineering Mathematics) events via LEBC (Leicestershire Education and Business Company). We have also been actively involved with apprenticeship schemes, employing one apprentice and two students, so far, training them in their chosen field and provide a solid footing in business for the future, as well as a well needed income whilst they study. We have employed a total of three people from the Future Jobs Fund scheme and are a core partner of the new Talent Match programme to help “NEETs” get into work.
4. Sustainability: As you would expect for a renewable energy company, we do a lot of work in this area. We support the National Forest by planting a tree for every installation that we carry out. We will be carbon neutral by the end of 2014. We have compost bins in office and as a result we only fill one black bin liner a month with non-recyclable waste. When we’re onsite, we’re environmentally conscious too. For example, when we delivered the National Trust’s largest ever solar project, we recycled all of the pallets we used, and we also give free sustainability talks in universities and colleges.

If you can’t see the benefits to your organisation from socially responsible activities, like in the examples above, then why not consider The Social Value Act of 2012 (in force from January 2013) that enables public sector organisations to chose a successful tenderer based on the level of social value the organisation would deliver – even when this social value doesn’t bear any relation to the contracted goods or services tendered for? There can be no argument against social responsibility in this context, as the legislation literally gives your business a competitive edge.

The Social SME study found that we are a generous lot: ‘Even small rises in employee numbers are associated with greater and different types of community engagement’ it reads. That has certainly been true of our company – the bigger we get, the more we do. I have seen the business benefits of my new and improved, structured community programme repeatedly over the last 12 months. Developing the programme tended to be trial and error for me, however, it needn’t have been if the company had been able to access more appropriate support in this area.

There is the 2011, NORMAPME-developed* ISO 26000, Guidance on Social Responsibility for European SMEs to help support us in our endeavours but otherwise the SME contribution remains predominantly unsupported by Government.

In October 2013, BITC (Business in the Community) called CSR programmes, ‘core to the business proposition and essential to long term business success,’ and made a number of recommendations to Government requesting, amongst other things, additional SME support for developing CSR strategies and the development of innovative policy approaches which support social initiatives that include the growth in employee volunteers, secondees and career breaks.

It doesn’t occur to most of us not to get involved with our stakeholders, but as SMEs, we don’t shout about our contributions, or the value of them to the wider world. We don’t have masses of marketers or spin doctors to set up the perfect photocall to share our achievements and we are certainly short on time to do it ourselves.

You’ll be pleased to know that our SME community spirit, and our inability to take credit for it, is a global phenomenon too. In September 2013, the nationwide New Zealand survey, BNZ Spotlight on SME Community Support found strikingly similar results to the UK studies including:

● 74% of SMEs agree all businesses should support their communities
● Long term support is more prevalent than short term
● 1 in 4 businesses (that support) expect to increase their level of support in the coming year
● 78% do not expect a ROI from their community support
● Most do little to publicise their support for the community

Perhaps it’s time as an SME community, that we recognise the importance to our business and the local community or economy of planning, structuring and monitoring our good natured dedication to worthy causes. I might suggest that it’s time we all took a little more credit for our actions and let the world know about exactly what else we contribute to our society and its people.

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