Corporations Pledged Last Year To Serve Communities, Not Just Shareholders. The Pandemic is Their Chance To Walk the Walk | Opinion

Last year, CEOs from nearly 200 of the nation's largest corporations announced a dramatic change in what their businesses officially stood for. In a new "Statement on the Purpose of a Corporation," the Business Roundtable said it no longer believed corporations should primarily serve shareholders. Instead, they should also serve customers, employees, suppliers and "the communities in which we work."

In a statement at the time, JPMorgan Chase CEO Jamie Dimon, who chaired the Roundtable, said, "Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term."

The Roundtable's announcement was met with plenty of skepticism. After all, business leaders have always professed their concern for their communities, but the scandals have kept rolling in.

Now that the COVID-19 pandemic has disrupted life across the country and all over the world, corporate leaders have a big opportunity to prove that they meant their promise—or to prove the naysayers right. As people suffer and the stock market tanks, will executives fixate on the latter? Or will they take substantive actions to support all stakeholders, including communities?

That support is badly needed. Charitable organizations serving communities in crucial ways during this time could quickly run out of funds. Some are helping care for the elderly who now cannot have visitors; delivering meals to vulnerable people; providing urgent medical care; and much more.

The many causes in need of financial support aren't limited to those focused on the virus. Many non-profits doing other important work are in danger of losing their funding as well, particularly given how many fundraising events have been canceled. Working in the charity space, I've also been hearing from people who want to help organizations that support crucial services during this time—services that cannot shut down, including police, firefighters, and the military.

Will businesses step in? The reasons for hope go beyond just the Roundtable's statement. Employees at today's businesses want leadership to take action. In one survey, 55 percent of workers said they would choose to work for a socially responsible company even if the salary was less. Demonstrating social responsibility during this time can help corporations attract and retain workers for the long term.

Just as importantly, customers want businesses to support communities this way. Eighty-four percent of shoppers surveyed said it's important to them that a company supports charitable causes. Research has found corporate social responsibility, which includes philanthropy, helps build long-lasting customer engagement.

Already amid this pandemic, some businesses have taken steps in the right direction. Earlier this month, Amazon and Microsoft pledged $1 million each for a Seattle-based fund to fight coronavirus. (The two companies are based in the city, which has been the epicenter of the U.S. outbreak.) Walmart has since announced a $25 million pledge to the global Covid-19 response effort. And the Business Roundtable announced, "A number of our nation's leading companies have been contributing to response and relief efforts and are deploying their expertise, products and services to safeguard public health."

Steps like these are good. But they don't speak to the vast array of causes people are concerned about. Some businesses go a step further and allow customers to choose where donation dollars go. At Lyft, there's a "round up and donate" feature that allows people to choose where some change goes for each ride (so if your ride costs $14.80, you choose to pay $15 and donate 20 cents.)

In other cases, businesses aren't leaving it to customers to add anything. Instead, they're allowing some percentage of each sale to be donated to charity of the customer's choice. (I left a career in investment banking to launch a startup, Givz, that helps make this possible.) By allowing a portion of their own proceeds to go to any registered 501(c)(3), these businesses ultimately extend their support to all sorts of organizations that matter to people in each community.

It's smart business. As a professor at Saint Mary's College put it, "Customers are more likely to return to brands that make them feel the warm glow of giving every time they make a purchase."

Over the last few years, concerns about inequality and the power of big businesses have grown exponentially. People in need, and the groups that serve them, are watching corporations closely now to see whether they pull through.

Ever since the Roundtable's statement was put out last year, many people have questioned whether CEOs will "put their money where their mouths are." We're about to find out.

Andrew Forman is co-founder of Givz.

The views expressed in this article are the author's own.​​​​​