The 2007 U.S. credit crunch that transformed into subprime mortgage crisis and economic meltdown is feared to become what is known as “The Great depression”. Under these circumstances, critics are slamming those companies who are sticking to their socially responsible practices raising questions about the loss in ‘profits’ because of CSR spending.

Dan Gray of Corporate Responsibility Matters has discussed in detail all the pros and cons of parting ways with CSR spending to limit losses. You can read his full post here but the conclusion is:

What will be really interesting to see is consumer reaction to a recession. As much as it will undoubtedly curb discretionary spending, it might equally provide a much needed drive towards more sustainable behaviours.

If it does, then the next economic upturn could be on a very different footing, and those companies that stay true to the cause will be well placed to reap the rewards.

Another take on the relationship between social responsibility and downward spiral of profits can be that if the ailing banks stop contributing towards the society then they would face double humiliation if they end up in FDIC control. Double humiliation because of their financial jeopardy and because of their lack of commitment towards the community they served in.

Non-profit organizations, on the contrary, seems pretty unscathed from the woes of subprime lowdown.

A slight cut in the CSR budget can be tolerated if your company is bearing the brunt of economic crisis but a total CSR blackout, as discussed above, can be highly counterproductive. So think before you leap (over the CSR spending!).

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