Iryna Solovey on the Effects of Involving Business in Public Activities

Iryna Solovey,

community development strategist, president of the Garage Gang NGO, and co-founder of the Big Idea social innovation platform

One of the stereotypes that needs to be dispelled, with the war helping to do so, is that business is something autonomous within society. I resort to this biological metaphor because it is important to view society as an ecosystem where everything is interconnected. If we accept this view, it will be easier for businesses to develop social responsibility strategies that are linked to their business strategy rather than limited to publicity. Nowadays, it is becoming easier to spot publicity projects: If a company spends disproportionately more on communication around a project than its actual benefit is, it is not about charity or change. Social appeal is being used here as a new marketing style, but is this because it is interpreted this way in international practice, or because managers cannot think of any other way to return their value than publicity? I do not have a clear answer. It is obvious that businesses will continue to want to work on their reputation, create an image for themselves, and increase their political weight. However, I suggest distinguishing these measures from those that a company undertakes as an integrated part of the social system.

Why do businesses create their own charitable programs and projects? We have a weak management school in general, and this is partly a manifestation of that. If you dig deeper, evaluating effectiveness and forming criteria for cooperation with other organizations is all about working with information and a culture of data-driven decision making. As a post-colonial country, we could not create our development strategies on our own for some time. And until a strategy is developed independently, the value of data is low and, accordingly, we have an underdeveloped, practically atrophied analytics sector. (To be fair, it should be noted that thanks to business demand, it is now taking shape). And when you lack analytics, you are forced to speculate on perceptions, with the one who explains something in the simplest and most accessible way winning in this game. It turns out that businesses do not have analytics on their immediate activities, while the civic sector does not have analytics on its impact. Hence, partnerships are built on personal contacts and the ability to persuade — better that than nothing.

Over the past ten years, thanks to commercial specialists who, following their hearts, joined the civic sector, the latter has developed a competent approach that businesses can rely on in the joint implementation of social responsibility programs. Previously, the goal often compensated for the quality of implementation, and there was a lack of managerial skills to ensure consistency, sustainability, structure, and partnership. It is therefore not surprising that the business now wants to create its own projects that function in a way that it understands. It believes that in the civic sector, there is no system to rely on — though it would have been good to develop one.

I think that the effect of involving business in the civic sector will regard civil society development — it will affect the number of conscious citizens. It is important to understand that companies that have introduced social responsibility programs related to climate change, gender equality, or other issues covered by EU legislation have not necessarily done so because they are genuinely concerned about these issues, but because they needed to enter the European market. Now, under the influence of the full-scale war, they have tried to do something else that affects life within the country. Once the existential threat subsides, the challenges for business will not disappear — they will simply become different, e.g., those related to the restructuring of the global economy, changes in the structure of human capital, etc. They will therefore have to worry not only about external influences and reputation but also about internal programs. For example, charitable programs can give value to employees in companies where the results of their work are significantly delayed. This may help maintain people’s identity and civic competence for them to feel they are making a difference and decisions not only in elections every four years but every day. Another thing is that there are various ways to affect one’s environment, i.e., cultural, educational, and volunteer projects. This creates a type of relationship where you can attract people to a company with something more than money, since material rewards no longer work so well.

Funding employees’ projects or matching people’s and the company’s funds for a good cause are potentially effective corporate social responsibility practices. For example, a company allocates a certain amount to each employee, which they can invest in a project they consider important, and then doubles that person’s contribution. This matching funds strategy provides flexibility working for both business strategy and building trust within the team. On top of that, it solves the problem of many closed programs where all the decisions about help are made by top managers with the team being excluded. It might also be good for a business to have some money set aside, like a foundation, to support charitable or community projects that its team is interested in. Of course, this means that businesses will have to develop competencies in areas that are not inherent to them, which is not profitable for any business. At the same time, there is room for partnerships with the civic sector. Expertise is now indispensable.

It is now crucial for businesses to engage in a dialogue with civic and charitable organizations and build partnerships. Thus, a pool of 4–5 permanent joint initiatives can be formed, which is good for both businesses and charitable organizations, as they will feel systemic support. Herewith, it is important to communicate the outcomes and changes resulting from collaboration to the team.

In the culture of giving, gratitude completes the cycle and promotes trust and equality. At the time, the launch of Big Idea aimed at developing the culture of giving in Ukraine. Crowdfunding was often perceived as a tool for raising funds that creates transactional relationships. However, it has always meant to build relationships between equals: While someone delegates funds, someone implements the idea. Take a simple example. When I came to a coffee shop, paid, and was served coffee, this is a transactional relationship. There was no reciprocity, only commodity-money relations. But if I say, “Your coffee is great, you sponsor my productivity,” and the barista says something nice in response, that is an exchange between equals. Only now, in 2023–2024, have we reached a point where the culture of giving has taken root. Now, even those raising money for the army, for something so understandable and necessary, think about what they can give back to their donors. After all, when one person gives and the other only takes, this is an unequal relationship that involves pressure and breaks down instead of stitching together the fabric of society.

Let us look at the fundraising campaigns of the largest foundations at the beginning of the invasion. At that time, victory was presented as the key value, which sounded rather abstract. It quickly became clear that such fundraising campaign was difficult to close as it lacked specifics. Now think about modern campaigns: They always include information about who it is for, why, and what it can change. In addition, now it is no longer like “Prytula raised UAH 100 million” but increasingly “We raised it together.” In other words, contributions began to be valued and gratitude is now expressed, which produces trust, involvement, and even a psychotherapeutic effect.

Charitable organizations must ensure that their donors receive gratitude. The question is in its form. In charity, it is often assumed that a donor transfers some resource and must use their brains to understand what exactly will change for the better. Since this is an unfinished cycle, such a donor feels abandoned and must somehow maintain their motivation on their own. This is extremely difficult to do on a long-term basis. I once advised an organization that received $100,000 from its largest donor — a significant amount at the time. The team at this organization could not figure out how to thank this person. A simple “thank you” was not enough: Some kind of gift was needed. Hence, we talked about what this donor had done before making his decision. It turned out that he had calculated how much money would have a significant impact on the organization’s activities. So, they prepared a detailed report on what they had been able to change with this money, and this became an appropriate form of gratitude, which the donor gladly accepted. What is more, it opened up the possibility of attracting him again, for he saw how much they had grown operationally thanks to his contribution. Therefore, ideally, a charitable organization should understand what the best form of gratitude is for its partners and use it.

Another consequence of the challenges posed by the war may be a change in the relationships between the business and the state. Shared experience may mean that corporate social responsibility or charity will no longer be a signal to check a company’s taxes. Business in Ukraine was formed in the context of a newly opened market and rapid growth, which depleted our human capital, with the war impact exacerbating this situation. Now, we are faced with a shortage of qualified specialists — a physical shortage. Why has this only become apparent now? Let us return to managers’ competence: They look at cash flow gaps rather than analytics. Therefore, quite expectedly, businesses and the state will have to cooperate in education — methodically and without expecting quick results, as transparent conditions for this have not yet been created. But this may change, because businesses are interested in competent employees capable of innovation, while the state is interested in these innovations and keeping people in Ukraine so that its economy can grow. I do not believe that the challenges we face will ever allow the state and the business to go their separate ways and mind their own business. On the contrary, a field of interaction and cooperation will emerge, and communities already demonstrate that. So, we all need each other, like parts of an organism.