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Community Social Responsibility

When it comes to social responsibility, convenience stores maintain a special connection with their community that’s more about people than business.

​By Jerry Soverinsky

In the Seinfeld series finale, Jerry and his friends are sentenced to one year in prison for failing to come to the aid of a carjack victim. As the arresting officer explained, “The law requires you to help or assist anyone in danger as long as it ’s reasonable … it’s called the Good Samaritan Law.”

Sitting in a county jail cell later that day, Jerry, Elaine, George and Kramer assess the law’s practicality. “The Good Samaritan Law? Are they crazy?” Elaine asks.

“Why would we want to help somebody?” adds George.

“That’s what nuns and Red Cross workers are for.”

It was a typical George Costanza remark, brutally honest for its insensitivity and lack of compassion. And while it’s easy to condemn the inaction of an individual like Costanza, more difficult is the case involving corporations.

What, if any, responsibility does a company — your store, for instance — bear toward its community?

Certainly, there are local, state and federal rules that govern your corporate behavior. But outside of compliance with enumerated laws, what
other actions should you take?

The concept is one of community responsibility, and it’s particularly relevant for the convenience store industry. It’s not difficult to understand why. U.S. convenience stores serve more than 160 million customers each day, with the majority likely local visitors stopping by for a grab-and-go occasion or to refuel their vehicle. Do you owe them (or their community) anything beyond just that?

The answer depends on your perspective.

Economist and Nobel Laureate Milton Friedman, whom The Economist deemed “the most influential economist of the second half of the 20th century” after his death in 2006, took a cynical, Costanza-like approach toward corporate social responsibility. Writing in The New York Times Magazine more than 40 years ago, his article, “The Social Responsibility of Business Is to Increase Its Profits,” was unapologetic for its forthrightness.

“The discussions of the ‘social responsibilities of business’ are notable for their analytical looseness and lack of rigor,” he wrote. “ ‘Business’ as a whole cannot be said to have responsibilities, even in this vague sense.”

Quoting from his book, Capitalism and Freedom, he concluded: “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits.... .”

It’s easy to dismiss such talk as dated, but the business headlines prove otherwise, with countless stories of corporate cultures focused — obsessed — with profits, not ethics (see Enron and WorldCom, for example). In fact, such examples may be precisely why one sees an increasingly prominent role of corporate social responsibility (CSR) initiatives undertaken by companies today.

Corporate Social Responsibility 
Whether it’s to restore consumer confidence or be part of an advancing wave of social awareness and involvement, companies of all sizes and industry focus are involved with CSR. While many do so voluntarily, others have bowed to pressure before embracing socially desirable business practices.

For instance, after a factory collapse in Bangladesh earlier this year that killed more than 1,000 people, shoppers took to Facebook and other social media networks to call out companies that sourced products through the country. As a result, H&M, Zara and Abercrombie & Fitch created a plan to improve factory conditions in Bangladesh.

Such action is what Harvard Business School professor Michael Porter and Harvard’s John F. Kennedy School of Government fellow Mark Kramer classify as one to restore reputation, one of four CSR justifications they cite in a 2006 article published in Harvard Business Review. The other justifications — moral obligation, sustainability and license to operate — all address distinct motivations, which more or less intersect with tangible business gains.

“The principle works best for issues that coincide with a company’s economic or regulatory interests,” Porter and Kramer wrote. They cite DuPont’s reduction in energy use (environmental), which has saved the company $2 billion, and McDonald’s evolution of its sandwich packaging (sustainability), which reduced its solid waste by 30%. “These were smart business decisions entirely apart from their environmental benefits,” they said.

Community Social Responsibility
Such an analysis of big business may make for a thoughtful academic paper, but when it comes to social responsibility, convenience stores take a more simplistic approach.

“It’s no more complicated than just doing something that we believe in,” explained Glenn Plumby, vice president of operations at Speedway LLC, and member of the NACS Research Committee, who dismissed any effort to categorize or justify (a la Porter and Kramer) the company’s charitable efforts.

For Speedway, its 22-year relationship with Children’s Miracle Network Hospitals (CMNH) is about doing the right thing for a worthy cause, not for reaping any strategic economic benefit.

“It’s the only charity we participate in and it’s by far become part of our culture,” Plumby said. “When I look at the approximately 1,470 store managers that we have out there, they have all bought into the support for CMNH and it’s become a big piece of what we do.”

Since 1991, Speedway has raised more than $53 million for CMNH, mainly through canister campaigns at store checkouts. While CMNH has a national reach, Speedway’s store-level efforts contribute directly to the 17 children’s hospitals located in the nine states where it operates.

“If a store in Toledo, Ohio, raises $20,000,” Plumby said, “it goes to the Children’s Hospital in Toledo. What better way for the consumer to direct their donation and support a hospital in their neighborhood … We understand that our consumer is our livelihood and that our consumer is very entrenched in each of their neighborhoods.”

Speedway President Tony Kenney explained the company’s CMNH work as part of a deliberate corporate effort focused on community.

“We look across the range of opportunities and how to give back to communities where we do business, and our relationship with CMNH does the best job of us being able to do that … The money is raised locally and stays locally.”

A Penny Saved
Like Speedway, Savannah, Georgia-based Parker’s has implemented a sustained, corporate-wide philanthropic effort with its Fueling the Community (FTC) program, a community-centric charity that’s focused on education.

“We wanted to do something that was meaningful and that would have a touchpoint in every community,” explained Greg Parker, president and CEO of The Parker Companies. “And that for us is education.”

On the first Wednesday of each month, Parker’s donates one penny for every gallon of gasoline sold, directing each store’s funds to the closest school. And customers who use their PumpPal Club card during the select Wednesday can designate which schools receive the FTC funds.

Since the program began last year, Parker’s has donated “about $100,000” to local schools, Parker said, a vital contribution that benefits the entire community.

“The tide that floats all ships is education,” he said. “And we wanted to help the communities where we do business.”
Speedway and Parker’s are not exceptions, but part of a growing culture within the convenience store industry committed to charitable community initiatives. In the past several months, c-stores have made substantial contributions to those in need:

  • Kangaroo Express raised $129,389 at 70 stores as part of its “Kash for Kids”program that benefits Junior Achievement, a program that helps young people develop work-readiness, entrepreneurship and financial literacy skills.
  • Wawa donated $77,449 collected from its Check Out Hunger campaign to the Food Bank of South Jersey, money that supports local food banks.
  •  QuickChek Corporation raised $13,000 on National Dine Out Day (June 19), which it donated to the Hurricane Sandy New Jersey Relief Fund, adding to the $110,569 that it collected last November at all of its New Jersey and New York locations. “We pride ourselves in being active members of the communities we serve and doing what we can to help our state recover,” said QuickChek CEO Dean Durling. The company’s community involvement continued the following day (June 20) at its annual golf outing, where it raised more than $52,000 for the Juvenile Diabetes Research Foundation.

The list is extensive and ongoing and clearly demonstrates the industry’s commitment to their communities, which Parker said should be top-of-mind for convenience stores.

“We think it’s absolutely important to give back to communities that support you,” he said. “When you support the communities you do business in, those communities support you. People like doing business with companies that care.”

Unintended Benefits
It’s a reciprocation that is inherent in most community service efforts. And while your decision to participate in a food drive, after school program, or Make-A-Wish campaign might not include any consideration of prospective business gain, don’t be surprised if it comes your way.

“[Our work with CMNH] has helped tremendously to build our brand,” Kenney said, “That’s one of the elements of brand equity. Looking at brand equity, there are several things that define it. CSR is one of those things.”

A 2002 KPMG CSR-based survey revealed a similar finding: “While the message is still working its way across corporate America, companies that embrace [the CSR] approach are finding it is just good business sense, they are rewarded with an enhanced reputation that often leads to greater financial value for the enterprise.”

Broader Efforts
For Speedway, charitable giving as a part of CSR (corporate social responsibility in its case) is just one element of its commitment to integrity that is spelled out in its “Code of Business Conduct.”

The code addresses responsibilities to the public, its shareholders, its business partners and to one another, detailed standards that address everything from environmental protection to diversity to marketing practices.

Speedway’s “Code” and others like it are increasingly common publications that companies distribute today, detailing for their stakeholders and the public (recall the power of social media in the Bangladesh disaster) their socially responsible business practices.

McDonald’s, for instance, offers an integrated approach to CSR across numerous platforms, a comprehensive effort that embraces five “pillars”: people, food, planet, sourcing and community.

Through its community pillar, it supports Ronald McDonald House Charities (RMHC), which includes Ronald McDonald House, a network of shelters located near hospitals that provide housing for families whose children are receiving medical treatment.

“For over 50 years, the McDonald’s system has been investing in and providing vital resources to children and families through RMHC and other local organizations that make a measurable impact on our society,” said J.C. Gonzalez-Mendez, senior vice president, Global Corporate Social Responsibility, Sustainability & Philanthropy, for McDonald’s. “This core value has been a key ingredient of our success …”

Nestlé, too, addresses its CSR efforts across a range of disciplines, framing them in a context that Friedman would endorse. “We believe we can make an important contribution to society, by going a step beyond corporate social responsibility to create value through our core business both for our shareholders and society. We prioritize the areas of nutrition, water and rural development to create shared value; this requires long term thinking,” said Peter Brabeck-Letmathe, chairman of Nestlé, in the company’s 2012 report, “Nestlé in Society.”

It’s an acknowledgement that the company pursues worthy endeavors but does so in a strategic way that complements its business interests. For example, with its global reach, Nestlé sources milk from more than 600,000 farmers. When it expanded to India, it found that economic conditions in the Moga district were dire, with a lack of refrigeration that prevented farmers from shipping milk or preserving its freshness.

As a result, Nestlé built refrigerated dairies in a number of Moga towns, sending its own trucks to collect the milk. In addition, it sent veterinarians, nutritionists and food experts to educate the farmers and assist with proper crop irrigation. As a result of the company’s efforts, the death rate among cattle dropped 75%, while milk production jumped 50-fold. And farmers received higher prices for their products, which improved their standard of living and strengthened their local economies.

At the same time, Nestlé was able to tap a more predictable milk yield, a strong internal benefit that led to increased sales for its products in India.

What Really Matters
Whether your company is contributing to local schools or hospitals, or is involved in more ambitious sustainability or environmental initiatives, the communities you serve are likely blind to motivations or any incidental benefit you might receive by your generosity.

The fact is, your stores are inextricably linked to your communities, serving as a safe and convenient place to obtain everyday necessities, and even acting as a distribution center for essential resources when disaster strikes.

Whether it makes good business sense or not, giving back to your community is the responsible and socially responsible thing to do. And while that doesn’t always make sound business sense, can you afford to do anything less?

Jerry Soverinsky is a freelance writer based in Chicago. He is also a NACS Magazine and NACS Daily contributor.