The ROI of Kindness: An Expense or Investment?

The ROI of Kindness: An Expense or Investment?

Team seedership
January 29, 2020

Karma is a popular eastern philosophical concept that is well-known across many cultures. In short, karma is a summation of an individual’s deeds either being “good” (i.e. kindness, generosity, positivity, charity) or “bad” (i.e. selfishness, destructiveness, negativity) and the effects of these deeds.

If those deeds are kind and charitable in nature, then the individual will likely see favorable outcomes in life. And if they are “bad,” well, you know what follows. Although karma is a spiritual concept, the act of purposefully living a kind and generous life can have measurable successes in businesses as well.

Take, for instance, the many studies showing the positive outcomes that come to businesses who are committed to supporting and giving back to their communities:

  • 85% of consumers were shown to have a positive image of a company that is involved in charitable giving activities. [SCORE, 2019]
  • 76% of consumers recommend products or services of charitable organizations. [Cone Study, 2018]
  • 82% believe these companies have higher quality products, are changing things for the better (73%) and genuinely care (65%). [Mintel, 2018]

Let’s jump straight to the bottom line here, kindness pays. When your business commits to regularly giving back to the community and leaning on your employees to help with these efforts, the ROI of kindness will undoubtedly start to manifest in sales and HR returns. However, in order to see these good results, you must make your good deeds known to your customers, clients, and employees.

Let It Be Known: Giving Gives Back

Being kind may be instinct for many business owners and managers, but knowing how to leverage these efforts into a business investment that can lead to growth takes some thought and planning. If you are already involved in giving back, ask yourself these questions:

  • Do you know what you gave—either cash, in-kind gifts, or time—and its value on a month to month basis?
  • Is what you give reactive or proactive?
  • Have you seen any positive results for your business from your charitable giving efforts?
  • Do you consider what you give back to the community as a business investment?

Answering these questions and taking the time to track and measure your efforts can provide some clarity on the ROI of being kind. Here are a few reasons why you should think of charity as an investment over an expense.

1. Grow Your Community

Small businesses depend on their communities. Without community support, small businesses would have few customers. When businesses are active in making their communities a better place, these communities can flourish leading to new business opportunities and more chances for growth.

2. Strengthen Your Brand Reputation

As with good karma, when you invest in giving, the positivity will be spread and returned exponentially. When your business’ charitable giving is visible, it allows customers, clients, and employees to grow an emotional connection with your brand. Studies have shown that emotions play an important role in consumers’ buying decisions. When you surround your business with positivity, it becomes a part of your brand identity.

3. Increase Employee Recruitment, Loyalty, and Retention

It has been shown time and time again, employees, especially millennial and zoomer employees, want to feel like their careers fulfill a greater purpose. When employees are researching a potential employer, they like to see how the business is involved in charitable activities. Many HR professionals know there is a cost associated with training and onboarding new employees. Getting these employees to stay within the organization will help save costs in the long run. So not only is it important to be involved in giving, businesses need to make their activities known for recruitment and retention purposes.

4. Deepen Customer/Client Relationships

As more and more consumers prefer cause-driven businesses, showcasing how your organization is actively involved in charitable initiatives serves to create good-will with your consumer base. Since consumers are more likely to recommend and support cause-driven businesses who give back to their communities, making your efforts visible and shareable on your website or on your social media channels will increase the chance to capitalize on this free publicity.

The Bottom Line

Investing in kindness and doing good has many proven benefits beyond what is listed above. Many benefits are intangible, but when it comes to building an active and engaged community around what your business gives back, these advantages can support your business growth goals.

Leveraging your charitable activities can help strengthen your branding, marketing and PR efforts, and help increase employee loyalty, retention, and recruitment. With seedership, you can easily track, measure, and share the good your business does so you can see your impact within the community, as well as on your bottom line.

Learn the potential of your kindness with a free 30-day trial of seedership.

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