The State of Social Responsibility

A new benchmark study shows a climb in socially responsible spending but a lack of consumer knowledge is the biggest hurdle for continued growth of Social Enterprises.

Consumers are choosing cause-based brands over charitable giving when they look to give back, according to a second annual benchmark report by Good.Must.Grow. a US marketing consultancy.

In a poll of 1,010 Americans, 30 per cent of consumers said they plan to increase the amount of goods and/or services they buy from socially responsible companies in the coming year, a modest uptick from 29 per cent in 2013. Meanwhile, only 18 per cent plan to increase charitable giving in 2014, a decline from 21 per cent in 2013.

One in five consumers (19 per cent ) said they prefer to “give back” by purchasing socially responsible products, while another 39 per cent preferred to split their giving between charities and cause-based brands.

When asked to select reasons for preferring socially responsible purchases over charitable contributions, more than half (52 per cent) said it was an easier way for them to give back consistently. Just under half (48 per cent) also reported it was a more effective way to support positive change or make a difference.

“The line between charity and commerce is blurring for many consumers, thanks to increasing opportunities for socially responsible spending,” Heath Shackleford, founder of Good.Must.Grow, said.

“As a result, forward-thinking causes should be evaluating whether they can diversify their organisations so they aren’t solely dependent upon grants and donations.”

“All signs point to continued momentum for brands that are centered on social impact. In addition to the planned increase in responsible spending, 29 per cent of those surveyed said they avoided buying products from a company specifically because it wasn’t socially responsible. This is up from 25 per cent who reported the same activity in 2013.

“The growth of conscious consumerism could be further amplified if the ‘good choice’ was a little easier for shoppers to make. While 62 per cent said buying goods or services from socially responsible companies was important, only 33 per cent actively sought out such companies.”

The report said that when asked what prevented consumers  from buying more socially responsible products in 2013, almost half (45 per cent) cited that knowledge was a key issue, meaning they did not know how to find socially responsible products, or which products were actually socially responsible.

This outranked availability, price, quality, selection and trust as potential roadblocks to conscious consumption.

“The Good.Must.Grow. research shows that we need to be doing even more to celebrate and promote people who are using business as a force for good,” Jay Coen Gilbert, co-founder of B Lab, the Not for Profit organisation that certifies B Corporations and governs the B Impact Assessment, said.

“As a community, we have to speak with one, unified voice to make socially responsible products and services easier for consumers to identify and support.”

More findings:

• In 2013, 29 per cent of consumers planned to increase their socially responsible spending. In 2014, 22 percent reported increased spending in this area, which means 75 per cent followed through on their intentions to do more good;
• An overwhelming majority (90 per cent) of consumers reported “being green” in the past 12 months, while 79 per cent reported reducing consumption (gas, energy, overall purchasing);
• Fewer consumers are trusting traditional advertising as a source for determining whether a company is socially responsible. In 2013, 29 per cent cited advertising as an evaluation tool, while in 2014, that number has dropped to 22 per cent;
• When evaluating whether or not a company is socially responsible, how the company treats its employees remains the most important factor with 45 per cent rating it as very important. This was followed closely by the company's impact on the environment (40 per cent);
• When asked which entity was most effective at making positive changes in society, 73 said Not for Profits and 72 per cent rated individuals as being very or somewhat effective. Social enterprises (56 per cent) edged major corporations (55 per cent) and outpaced local government (44 per cent) and the Federal Government (36 per cent). Joint efforts between government, corporations and Not for Profits came in at 60 per cent.