Learn More
- Employment
- Sourcing and procurement
- Facilities siting and management
- Product & service development, use and delivery
- Financial investment
- Philanthropy and community investment
Employment
The corporation's role as an employer is one of the most important and most documented sources of economic development. Companies employ people directly, through permanent and contract employees, and indirectly, through their supplier and outsourcing contracts. It is through these relationships that companies can have a positive and negative effect and interaction with population groups that have traditionally been underrepresented in the workforce, as defined by income, ethnicity, location, or disabilities.
Countries and cities spend time and resources attracting businesses that will employ their citizens. The unemployment rate is one of the most widely used gauges to measure the health of an economy. However, the number of jobs created is not the only thing that directly impacts the community's economic health. The type of job, the skills learned while working, and the opportunities for employee growth also matter for a developing economy.
Summary Indicators
- Number of employees, by level of responsibility / percent of total
- Number and Nature of employee training / support programs
- Number on executive management and board / percent of total
- Wages for employees / percent of average or total
- Advancement, retention and turnover of employees / percent of total
Sourcing and Procurement
The direct impact of dollars spent on outsourcing and purchasing by large corporations can be considerable. Sourcing from corporations from companies owned by members of significant communities, whether defined by geography, ethnicity, or gender, can stimulate economic development for those communities. How much development depends on the contract size, its percentage of the vendor's total business, the corporation's influence over the vendor, how large the local economy is and the corporate resources dedicated to development.
Summary Indicators
- Number of suppliers used / percent of whole
- Number of contracts / percent of whole
- Dollars spent / Purchase Value / percent of whole
- Distribution of sourcing (Goods vs Services, supply chain, maintenance-repair-operation) / percent of whole
- Development and mentoring
- Outreach and verification / screening
- 2nd tier / subcontractor participation
Facilities Siting and Management
A growing number of companies have achieved profitability and boosted local economies by choosing to operate company headquarters, back office functions or manufacturing facilities in underserved or emerging communities. By taking a holistic approach to community development when siting and operating facilities, companies can incorporate many of the above practices to generate local tax revenues, create local business and employment opportunities, strengthen local revitalization efforts and support local organizations. In emerging communities, concerns about fostering dependency must be addressed.
Summary Indicators
- Underserved Communities where facilities are located
- Nature of location (market, labor, resource extraction)
- Construction and Operation
- Level of Engagement with and involvement of community
- Use of company assets:
- Employment (number of jobs and wages)
- Sourcing (number of suppliers and money spent)
- Social Investment
- Product and Service distribution (forward linkage)
- Product and Service Use
- Financial Investments
- Tax Contribution
- Indirect Jobs
Product and Service Development, Use and Delivery
The economic effect of a corporation's products and services is one of the least measured impacts, but could be one of the greatest depending on the industry. Negative and positive impacts on low-income or underserved communities can stem from the nature of the product or service, its pricing, marketing and distribution. For example, the automotive industry creates impacts that range from negative environmental effects to positive social effects such as increased mobility for job search, etc. Recently, corporate watchdogs have been advocating for companies to improve the impacts of their products and services by reducing negative impacts during manufacture and improving access to products essential for socio-economic development (i.e. pharmaceutical drugs, financial services, water.)
Summary Indicators
- Engagement of target market to determine needs
- Research and development dollars dedicated to products and services for lowest income market
- Cross-functional work with operations to reduce costs of product manufacture or service delivery
- Marketing
- Sourcing of raw materials
- Access of product
- Markets served
- Marketing
- Nature of Distribution
- Amount of business
Financial Investment
Financial investments refer to investing a portion of a company's cash on a short or long-term basis in various investment vehicles that have community benefits. These investments are then evaluated based on financial returns as well as community economic development benefits. A variety of options exists for companies, including investing in Socially Responsible Investments or tax credits that benefit communities (i.e., housing, etc), doing business with community development banks and credit unions, making investments in community development loan funds, and equity investments in community development venture capital organizations or businesses owned by minorities.
Summary Indicators
- Amount of direct investment activity
- Nature of investment activity
- Level of capital investments
- Amount of investments that support economic benefit
- Amount of investments in business partners and suppliers
- Amount of related SRI investing
- Return on above investment
Philanthropy and Community Investment
Philanthropic investments in underserved communities often involve targeting philanthropic dollars and resources for activities that stimulate wealth and job creation in the relevant communities. As such, companies have focused on a number of areas of need including job readiness training, affordable housing, small business development and expansion, economic revitalization, and investment in youth education and school-to-work programs. Strategies include: donating money to community development organizations, partnering with non-profit agencies, and spearheading economic revitalization programs that involve community groups and multiple stakeholders.
Of the different domains, the social investment domain is the most well-documented and researched. The Center for Corporate Citizenship and the Corporate Citizenship Company have worked closely with community relations managers to determine the appropriate indicators to measure the effectiveness and impact of their social investment programs.
Summary Indicators
- Amount of philanthropic investment (cash, in-kind)
- Amount of social investment (loans, equity investments, guarantees)
- Community partnerships
- Level of volunteer commitment and activity
- Public policy stance / civic engagement