The Pro Bono Business Case

While pro bono service has been an integrated part of the legal profession for years, it is a relatively new idea for the rest of the business community. As companies begin to explore the option, it is helpful to first understand the fundamental business case that justifies investing in a pro bono program.

To help you architect a business case for your program, we have collected relevant research on the topic and created a framework for evaluating the benefits. There are five key components to our framework:

1. Corporate Citizenship & Corporate Social Responsibility
2. Human Resources
3. Internal Communication
4. Innovation
5. Partnership Development

Good corporate citizenship is widely recognized as critical to the sustainability of a business. This is being demonstrated in several ways. All things being equal, 80% of Americans report they would switch to a company involved with a good cause (2002: Cone, Inc.), 84% of employees feel a company’s image in the community is important (The Center for Corporate Citizenship at Boston College) and 66% of Americans factor social responsibility into their investment decisions (2002: Cone, Inc.).

Perhaps most importantly, companies that were engaged in corporate social responsibility had a 10-year return on equity that was 10% higher than their counterparts and a 10-year relative return to shareholders that was 65% higher (Graves and Waddock, 2000).

The typical nonprofit consultancy charges between $75-250 an hour. Employees can provide comparable, if not greater value to nonprofits through pro bono service. It is a significantly more leveraged investment in the nonprofit sector than the $17.55 an hour (Independent Sector, 2005) in value they can deliver through direct service volunteering.

This additional value can be harnessed by a company to make a much bigger impact on the organizations it supports.


2. Human Resources

Recruitment
The cliché is true; people are your most valuable asset. In a competitive labor market, core variables like compensation tend to become commoditized, and differentiation often relies on more qualitative factors like people and values.

Law firms regularly compete for talent out of top law schools by touting the pro bono opportunities they offer attorneys. A pro bono program is viewed favorably because it demonstrates a commitment to values. In the legal profession, the opportunity to do pro bono work is viewed as a reward and therefore, access to a robust pro bono program enhances a candidate’s perception of their total rewards package.

While this perception has not yet developed in other fields, 77% of job seekers consider the social commitment of a company when choosing an employer (Cone, Inc., 2002).

Employee Retention
Losing an employee, especially a high performing employee, can be incredibly expensive. A Cornell University study estimates that the financial impact of losing an employee can be between 50-150% of the annual salary of the position. Pro bono service can help to avoid this cost by strengthening employee retention through engagement.

Hewitt Associates has done extensive research on employee engagement – the intellectual and emotional commitment of employees. They identified six drivers of employee engagement: people, work/values, opportunities, quality of life, total rewards and process and procedures.

A well supported pro bono service program can help support five of the six drivers identified by Hewitt Associates:

Learning & Development
On average, Fortune 500 companies spend over $350 a year per employee on training (Van Buren and Erkskine, 2002). This number is much higher when it comes to investments in high potential employees and managers. Companies will spend anywhere from $2,000 to enroll a rising star in a leadership program (e.g. Coro) to in excess of $100,000 to support an employee’s acquisition of an MBA.

Many of the core skills required to become an effective employee and leader can be strengthened through pro bono service (The Center for Corporate Citizenship at Boston College):

Division / Department Silos
It is a common complaint among corporate leadership that there is inadequate and dysfunctional communication between business units, offices, departments and other silos within a company. These barriers prevent innovation, create inefficiencies and cause employee frustration.

A pro bono program can be designed to create teams of employees from across these silos. By engaging them together in pro bono service, communication and trust is built between divisions. It may also expose employees to opportunities in other areas of the company that they might consider over finding another employer.

Mergers & Acquisitions
Of the 70% of corporate mergers that fail to achieve their anticipated value (Weekly Corporate Growth Report), 85% are attributed to mismanagement of cultural issues (Industrial Management).

If designed to integrate employees from merged companies, pro bono programs can help to overcome cultural barriers and build trust between divisions. When working pro bono, teams are engaged on projects for external nonprofit “clients”, projects that are not likely to raise sensitive territorial or strategic issues. As a result, employees from both cultures are able to connect through their shared commitment to the community and professional craft.


4. Innovation

Creative Thinking
For most businesses, innovation is critical to their ongoing success. It is easy, however for employees to get stuck in a rut as they face similar tasks and people every day.

U.C. Berkeley economist Anna Lee Saxenian attributes much of the innovation in Silicon Valley to the fact that employees in the region switch employers more often than anywhere else. This process of switching jobs frequently prevents skills and thought processes from going dormant and also forces people to constantly check their assumptions.

For the same reason that job hopping creates innovation, pro bono service can also be a catalyst for questioning assumptions and sharpening skills. It requires employees to apply their skills to a new environment with new people, which inevitably forces them to examine how they approach challenges and find innovative solutions.

Customer Insight
For most business professionals, it is difficult to gain insight about customers who live and operate under very different realities. The greater the differences, the harder it is to get in the head of a potential customer.

For companies who serve small businesses, nonprofits or emerging consumer groups, pro bono service can provide a unique opportunity to understand these markets. Employees are able to roll up their sleeves and work side-by-side with nonprofit leaders and understand what it takes to run a small operation (nonprofit or for-profit) as well as learn about the populations they serve.


5. Partnership Development

A pro bono program does not need to be confined to engaging employees. You can create a program that teams your employees with their counterparts at other companies.

As shown in the table below, this has the potential to be a powerful model for building non transactional relationships between you and your clients, vendors and partners:

Conclusion

A well designed pro bono program can enhance your company’s philanthropic initiatives to increase your impact in the community, while fulfilling internal objectives that ultimately strengthen your company’s performance. The objectives include enhancing staff recruitment, development and retention, facilitating internal communication, and fostering innovation. In addition, a successful program can be extended across companies to strengthen your company’s relationship with partner organizations.

The case is clear: many companies would greatly benefit from integrating pro bono work into their business practice.


© 2006 Taproot Foundation. All Rights Reserved.

Our Charter

It is our goal to make pro bono work an integrated part of the business community so all nonprofits have access to the services they desperately need.