In recent years, community investment has become increasingly important. Not only does investing in the local community benefit the company by fostering a positive reputation and customer loyalty, but it also has a positive impact on the community by creating jobs and supporting local businesses.
This article will explore the importance of community investment for businesses and how it can benefit both the company and the community. We will also look at four examples of successful community investment initiatives and how they have helped businesses to grow.
The Importance of Community Investments for Businesses
Community investments not only boost a business’s status and potential profitability but also improve the overall company culture and strengthen the potential for investments down the line. Working within a local community context provides deeper employee incentives and overall engagement with the customers, employees, and business partners who interact with the business daily.
Keeps Employees Engaged
Research has revealed that businesses that foster a positive relationship with their local community also gain increased loyalty and enthusiasm from their employees. Retaining top talent means living by brand values and exhibiting a sense of social justice, environmental awareness, or ethical considerations. Reaching out to the local community inspires employees to stick around and participate in meaningful endeavors.
Builds Up Trust Within the Community
Word of mouth is one of the most powerful marketing tools we have at our disposal. Small businesses that build up a good reputation within the local community can leverage this power to boost sales, improve customer loyalty rates, and bring in new customers.
By building up trust in the community, businesses position themselves for success as local communities exhibit long-term preferences for companies they deem trustworthy.
For example, local business clinics can build trust and credibility with their local communities by ensuring PCI compliance. Ensuring compliance with PCI means meeting several security requirements, such as monitoring security levels and encrypting customer credit card information. Customers who feel secure visiting a local business who ensures compliance in this way will be more likely to turn here for help rather than a larger, corporate option. This builds up trust within the community and benefits local businesses.
How Community Investments Benefit the Community
The number one benefit to the community is the positive effect of the business itself, which pays taxes, employs workers, draws up contracts, and supports the local supply chain and economy. By investing further in the community, businesses can provide access to social services, career development training, upskilling and reskilling, and enhanced capacity education for workers. Creative, sustainable community investments that affect the maximum number of people are key to success.
When businesses are investing in the community, it means they have the needs of that specific local community in mind. By applying funding and resources to the community and towards developments that will benefit it, life gets easier for the individuals who make up that specific local community.
Community investments work best when they embrace a multi-tiered process of engagement. The process should begin with crafting an effective strategy so that businesses can ensure their goals are in actual alignment with the needs of the community. Sustainability is key, and working within multiple stakeholder partnerships is also important.
Businesses should be able to measure the positive impact of their engagement with the local community, crafting rubrics for success that include increased personal and career development, tighter-knit community structures, and more advanced environmental policies.
Four Successful Community Investment Initiatives
An Interconnected Grassroots National Network
While not all community investment endeavors succeed in including all the voices of the communities they are serving, some do. The Seed Commons is one such example.
Seed Commons is a network that spans the United States, connecting loan funds that offer non-extractive loans through locally run cooperative businesses. The community investment initiative empowers local businesses and provides a just and sustainable alternative economic system that promotes individuals and community networks instead of profits.
Community Real Estate Investments
Access to affordable housing and real estate is often a critical issue in low-income communities, so one investment initiative aims to address that problem. In Portland, Oregon, John Haines created the Community Investment Trust, or CIT, to provide low-fee community housing for those who need it. CIT purchased a former shopping center and transformed it into affordable housing for low-income residents, who pay between $10 to $100 a month for a space in this cooperative.
Real estate crowdfunding is a way for individuals to accept capital investments from many different investors and then combine their money to purchase properties. Most real estate crowdfunding platforms have low minimum investment requirementsof around $2,500, allowing everyone to participate, even those who normally wouldn’t have access to the real estate market.
Investing in the community can manifest in many ways. Reducing paperwork and increasing the ease of bureaucratic processes is a great example of how businesses can benefit the community. For instance, businesses can use direct text messaging software to help customers and clients cut down on lengthy communication processes, making things smoother for everyone.
One local dentistry business based out of Washington found thatfour out of every five customers started paying their invoices within twenty-four hours since switching to a text-to-pay system, a simple adjustment that benefitted both the community and the business.
Balancing Resources, Technology, and Skills
By providing a balanced investment “portfolio” of possible ways to donate to community organizations, businesses can strategically allocate their community investment funds.
In-kind and pro-bono donations are also becoming ever more frequent choices for community investments, drawing on the power of the workplace community to help support the local community. For example, Salesforce hosts a professional Pro Bono Week, in which employees are invited to donate to or volunteer for specific causes, such as helping families find a sense of normalcy in war-torn Ukraine or reducing the food insecurity of low-income families.
Developing your small business is equal to developing your business relationships. Working from a framework that places precedence on relationships within and throughout the local community provides for a more equitable, trust-based, enhanced way of interacting and conducting business.
Not only do communities benefit from the funding and support provided by businesses, but the investors also gain media coverage, a stronger local reputation, higher employee engagement rates, a more loyal customer base, and even a new customer draw.
By networking with local organizations, businesses can learn how best to support and empower the people who inhabit the local community, prioritizing stability, sustainability, authenticity, and care to strengthen local small business community bonds.
What can Mainvest do for your business?
Mainvest allows you to raise capital from your community, without giving up any ownership or control in the process. By running a Mainvest campaign, you can engage the community and get buy-in from local stakeholders. If you are ready to take the next step as an entrepreneur, reach out to us here.
Written by a guest author for Mainvest.