The survey Philanthropy in Central & Eastern Europe conducted in 2020 by Social Impact Alliance for Central & Eastern Europe and Kantar clearly indicates that companies will soon be motivated to engage in social activity by increasingly conscious customers and consumers. Already as many as 47% of Poles are willing to pay more for products and services offered by socially responsible brands. Social involvement is also expected by employees and investors. More conscious companies are beginning to adjust their strategies.
One thing is certain – businesses have more and more resources and willingness to effectively tackle social and environmental challenges. What barriers stand in their way? To see recommendations for changes, prepared in collaboration with organizations that are shaping the Polish impact ecosystem, please download the free report below.
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In order to identify the challenges faced by companies wishing to engage in social activity in Poland, Social Impact Alliance for Central & Eastern Europe, UN Global Compact Network Poland, Kantar Poland, and Dentons held a series of individual and group consultations between May 26 and August 23, 2021, to which they invited representatives of companies, umbrella organizations for family businesses, corporate foundations and nonprofits, academic institutions, and national and international organizations supporting social engagement in Poland and in the region. They represent a voice of and support over tens of thousands of private and social entities in total. The aim of the project was to identify barriers and potential incentives for businesses willing to engage in social activity.
The following document presents the list of postulates and the recommendations developed on their basis. We hope that you will join us in their implementation. Together we can make a positive impact on the environment in which more than 4 million Polish companies operate, and in turn, on a society as a whole.
The institution of employee volunteering is not regulated by law. Some entrepreneurs do not know whether engaging employees in social activity is legally allowed or not. Furthermore, there is insufficient information about the permissible way of granting time off work for volunteering activity, the rules and obligations pertaining to compensation for the time spent on volunteering, and the scope of the employer’s responsibility for the volunteering employee.
Entrepreneurs drew particular attention to the following issues that they found problematic:
- Lack of clarity regarding the legal basis for setting up rules, including regulations and policies, for volunteering activities of employees or associates;
- Lack of clarity on the legality of engaging employees in volunteering;
- Lack of clear rules and ways of formally delegating an employee to perform volunteer work, including work for corporate foundations;
- Lack of clarity regarding the scope of the employer’s responsibility for the employee during volunteering activities;
- Lack of clarity regarding the deductibility of costs incurred by employers for the organization of volunteering, including the cost of insuring the volunteers;
- Lack of clarity regarding the deductibility of costs incurred by volunteering employees (e.g., local and international travel, meals, travel insurance);
- Lack of knowledge and tools to effectively encourage employees to engage in volunteering.
Practical doubts have been raised as to the VAT treatment of pro bono services provided by enterprises to social purpose organizations. Some companies do not provide such services or provide them without signing formal agreements due to the lack of clear guidelines on their VAT taxation. This has a negative impact on the number and stability of such services being provided to social purpose organizations.
The system of tax benefits and incentives has also been pointed out as an area for potential improvement. This pertains particularly to the low limit for tax deductible donations (especially in comparison to other EU countries) and the system’s low flexibility (deductions cannot be spread over consecutive tax years). The practical application of tax exemptions provided by regulations concerning CIT for entities performing public benefit activities has also been reported as problematic.
The ecosystem has been assessed as outdated and in need of adjustment to the dynamically evolving socioeconomic reality. The mechanisms of financing social services by enterprises on a stable and flexible basis need to be improved, and social organizations need to be given more freedom to conduct business so that they can finance their goals more effectively (at present organizations report numerous regulatory/bureaucratic barriers in this area).
There is insufficient access to up‑to‑date and reliable information that would comprehensively present the most important aspects of engaging in social activity by businesses. This applies in particular to contract standards, rules and regulations, legal and tax issues, and tools. There is no single place from where these could be obtained by entrepreneurs. As a result, companies are forced to look for information on their own, often finding mutually exclusive advice. This is felt particularly acutely by entrepreneurs who are just starting out their social involvement or lack their own tax and legal departments.
The market lacks specialized staff and experts in the field of corporate social responsibility. Pro‑social attitudes should be fostered among managers, leaders, and successors as it is the management boards or the owners who usually initiate or block the social involvement of the companies. Relevant knowledge should be promoted among the personnel of other specializations (particularly finance, human resources, and marketing). It is also essential to educate the younger generation.
Promoting good practices and creating a “positive climate” around companies that engage socially is indispensable, as is the building of an appropriate narrative to appreciate businesses who become socially involved and thus encourage others to act.
The current measures, if at all present, are quantitative, e.g. the number of activities or the number of participants. There is a lack of qualitative measures that would evaluate the actual impact of the conducted activities on the society and the planet. Companies do not know how to manage and measure these processes. There is a shortage of skills required to combine social responsibility with company strategy, perform long-term planning, and establish appropriate key performance indicators (KPIs).
Companies are left on their own to conduct time-consuming and expensive due diligence processes on social purpose organizations and their programs. The offer for businesses wishing to become socially involved is insufficient, and there is no space where it could be found easily. Social partners need professionalization in their contacts with business. Standards for cooperation and a platform for dialogue need to be created. An important role can be played by umbrella organizations that understand and are able to reconcile the expectations of both sides.
Introduction of an obligation to disclose socially responsible actions in tenders and procurements, including public ones. Analysis of socially responsible actions in investment and credit processes. Introduction of corporate standards to supply chains (compliance).
the educational offer
Abris Capital Partners
Academy for the Development of Philanthropy in Poland
B Corp / BETTER.
BNP Paribas Bank Poland
Business Centre Club | Commission for Family Businesses
Ceetrus Poland / Nhood Poland
Family Business Initiative Association (Stowarzyszenie Inicjatywa Firm Rodzinnych)
Family Business Institute (Instytut Biznesu Rodzinnego)
FAOO (Academy of Civic Organizations Foundation)
FISE (The Foundation for Social and Economic Initiatives)
ING Bank Slaski SA
Klon-Jawor Association / ngo.pl
Polish Donors Forum
Responsible Business Forum
Sport Education Foundation
Tech To The Rescue
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