corporate social responsibility: A brief history

Corporate Social Responsibility (CSR) has come a long way, morphing from a nice thing to do to what it is today:
a necessity for a successful business.

Today’s CSR programs have their roots in corporate philanthropy. Wealthy businessman and philanthropist Andrew Carnegie challenged wealthy people to support social causes, following his belief in the Gospel of Wealth. In the late 1800s, John D. Rockefeller, taking inspiration from Carnegie, followed suit in donating more than half a billion dollars.

In 1914, Frederick Goff, a well-known banker in Cleveland, founded the Cleveland Foundation, a trustee of the Cleveland Trust Company. Its purpose was to give power to the community by accepting gifts from multiple donors rather than one fortune, who could collectively assess needs and respond to the community. This was the first community foundation.

It wasn’t until the 1940s, however, that businesses, and not their owners or shareholders, could support charities.

Howard Bowen, an American economist and Grinnell College president, is often cited as the “father of CSR.” He connected the responsibility of corporations to society and published a book in 1953, which advocated for business ethics and responsiveness to societal stakeholders called Social Responsibilities of the Businessman.

CSR truly began to take hold in the U.S. in the 1970s, when the concept of the “social contract” between business and society was declared by the Committee for Economic Development in 1971. The social contract is based on the idea that business functions because of public “consent,” therefore business has an obligation to constructively serve the needs of society. This is often referred to today as “license to operate” – that is to contribute more to society than solely their products for sale.

The social contract outlined three responsibilities, and they’re still applicable today: 

  1. Provide jobs and economic growth through well run businesses.
  2. Run the business fairly and honestly regarding employees and customers.
  3. Become more broadly involved in improving the conditions of the community and environment in which it operates.

In 1976, professor Sandra L. Holmes conducted a survey on CSR to find how decisions on which causes to support were made. Her results, from the Executive perceptions of corporate social responsibilitycan boil down to:

  • Utilizing a corporation’s ability to help a specific need
  • Severity of a social need
  • Executive interest
  • PR gained from action
  • Government influence

Profession Archie B. Carroll summarized the above in 1979 in A Three-Dimensional Conceptual Model of Corporate Performance, which created a model to make CSR less nebulous. He cited Holmes’ survey that, “That these disparate factors should show up in a response to a question of this kind suggests clearly that business executives do not have a consensus on what social issues should be addressed.”

Using The Evolution of the Corporate Social Performance Model, which debuted in 1985, Carroll’s definition of CSR was understood as a 3-pronged approach:

  1. companies adopted principles (or ethics),
  2. created and executed formal processes (how they would respond),
  3. and developed policies (managing specific issues).

This approach brought together social responsiveness and business ethics into one field of study and performance.

In the early 1990s, professor Donna J. Wood published Corporate Social Performance Revisited. This paper built on the two models previously mentioned and added an important facet: program outcomes and impacts. Aside from perhaps an early version of the impact measurement systems we know today, Wood also provided a model for assessing CSR at the institutional, organizational, and individual levels.

The Corporate Citizenship Guide: Defining the Profession

Many of the companies you hear about today developed their modern strategies in the 1980 – 1990s and began to communicate their contributions, fueled in part by President George HW Bush’s call for thousand points of light.

The very early adopters of CSR were companies such as Johnson & Johnson, whose founder, Robert Wood Johnson, established their credo in 1943, which requires that the needs of those they serve are put first. The Hershey Company founder, Milton Hershey built more than just a company in Hershey. He built a town and a community with facilities, civic centers and cultural institutions that continue to grow today,

These initiatives were in the first half of the 20th century, and their founders understood that their stakeholders went beyond the board room and that when their customers and communities were healthy and vibrant, their companies would be as well.

Today, CSR is essential to the bottom line, and corporate citizenship professionals are empowered to align their work with the business to maximize impact. As new professionals join the field every day, it’s important to look back on how CSR has evolved and who those early contributors were.

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