Whether or not the private sector’s response to the Ukraine crisis signals a new era of humanitarian aid, it offers critical lessons for the business community.
Russia’s latest invasion of Ukraine was the culmination of years of repeated aggression on its neighbor, and yet Russia’s reckless actions took most of the world by surprise. In the days following Russia’s invasion of Ukraine on Feb. 24, GlobalGiving’s donor community poured their support into Ukraine crisis relief efforts. In just four days, more than $1.5 million had been donated on our platform. However, it wasn’t until two weeks later that momentum built with businesses across the world taking action. Their monetary and in-kind donations set off an unprecedented, and in many ways astounding, response from the private sector.
Why astounding? While companies have increased their aid to disaster and humanitarian causes in recent decades, with donation rates among the 500 largest US companies jumping from 20% in 1990 to 95% in 2014, the corporate response to the Ukraine crisis defied expectations given its highly politicized nature.
With more than $1 billion in monetary donations raised globally to date, nobody expected the volume or pace at which corporations around the world would send funds to support Ukrainians affected by the war. A few bold companies incited a peer-pressured cascade of million-dollar donations from across the private sector.
And yet, with a little distance, you can see how the corporate response to the Ukraine crisis was also influenced by increasingly popular business trends:
Stakeholder pressure: Most corporate donors cited employee interest as the reason for their generous contributions, with many companies creating employee matching campaigns.
Disaster and humanitarian response: In the past decade, companies have dramatically increased their budgets for disaster recovery and humanitarian aid and were poised to give generously early in the calendar year when Russia’s invasion began.
Operational resilience: Companies are shoring up global operations and ensuring a resilient supply chain given the impact geopolitics, natural disasters, and now pandemics can have on business operations.
Ultimately, a public commitment, and in some cases divestment from business operations in Russia, was an altruistic move and a sound business decision.
How the corporate response to Ukraine could (and should!) shape CSR
So what can we take away from all this, and what does it suggest about the private sector’s response to future crises?
Many are skeptical about whether the response to the Ukraine crisis signals that the tide is turning for company responses to humanitarian crises. Businesses have not given similar levels of support to humanitarian crises in other regions. Russia’s invasion of Ukraine struck close to home for Western companies, and the resulting disparities have triggered conversations about inequity in philanthropy and the impact of media attention.
Whether it’s a turning point or not, I see three key learnings for the business community:
1. Eyes and ears on the ground are essential for global companies.
GlobalGiving launched its Ukraine Crisis Relief Fund on Feb. 9—more than two weeks before Russia invaded. With 20 years of experience building deep relationships in communities around the world, our network of community leaders and local changemakers gave us early awareness few others had. Deep community engagement and communication are essential for multinational companies increasingly susceptible to natural and geopolitical events.
2. Employee pressure and expectations are a driving force for private sector response.
An increasingly vocal and powerful workforce will continue to drive corporate action. Now more than ever, it is important for companies to be clear about their purpose and values and to engage employees in what matters to them.
3. Long gone are the days when companies stay silent on political issues.
While the role of corporate leadership in societal issues remains controversial in the business community, the complexity of our global economic system and pressure from customers, investors, and employees means it will be virtually impossible for companies to steer clear of geopolitical events and humanitarian crises. The question is no longer whether a company should respond—it’s how and when.
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Featured Photo: Help us feed refugees from Ukraine by Katalyst