How Home Depot and ANN Inc. Practice Social Responsibility

At the closing session of the National Retail Federation's Big Show in New York City yesterday, executives from Home Depot and ANN Inc., parent company of Ann Taylor and LOFT, discussed the role social responsibility plays in their companies.

Fred Wacker, chief operating officer of the Home Depot Foundation, the philanthropic arm of the big-box retailer, said the brand was looking for a charitable outlet that was both helpful to others and cost effective. Framing Hope was formed in partnership with Good360, a nonprofit that teams with retailers to design and deliver product donation programs that meet corporate objectives. Home Depot stores across the country team up with local nonprofits, which are vetted by Good360, to donate building products. The donated products would otherwise be headed to landfills.

Framing Hope donated $150 million worth of products last year, with 1,171 Home Depot stores participating in the program. Those donated products have helped build over 1 million homes for low-income families.

Our goal is to give back to our communities while gaining shareholder value, Wacker said. According to a study from Indiana University's School of Public and Environmental Affairs, over a five-year period Home Depot has avoided paying for 7,000 truckloads of waste removal by donating its unused products rather than disposing of them. This equated to $2 million in savings for the brand, Wacker said. Donating the products produces a better return on investment than liquidating or disposing of them, he added.

In addition to the positive effect that Framing Hope has had on Home Depot's bottom line, the program has had an impact on the brand's store associates as well. It's told them that senior management listens to them and acts upon what they hear, Wacker said. Home Depot has been so happy with its partnership with Good360 that it's budgeted an additional $10 million for social programs in 2013.

Community an Extension of the Brand
For ANN Inc., making social responsibility an integral part of its company was an easy decision because its customers and associates are so passionate about the topic, said Jeanette Ferran Astorga, the retailer's vice president of corporate social responsibility. In 2007, the company launched ANN Cares, a charitable fund that's donated nearly $25 million to women's and children's charities.

Five years later, ANN Inc. partnered with Good360 to launch ANN Cares 360. Much like Home Depot's product donation program, Ann Taylor and LOFT stores donate obsolete store materials (e.g., fixtures, visual displays) to local nonprofit organizations. In less than a year, ANN Inc. has donated 30,000 pounds of material to 90 nonprofits in 36 states.

As with any corporate social responsibility program, Astorga and her team needed executive buy-in. Here's how she got it: started small to to prove the concept worked. ANN Inc. donated disco balls to nonprofits — the balls were used to decorate venues hosting fundraisers for breast cancer research. It was easy for store associates to execute and it met our customers' expectations, Astorga said of the initial ANN 360 Cares endeavor. The results were outstanding, and senior management was sold.

In addition to the good will ANN Inc. is creating in the community with its charitable efforts, the retailer's bottom line is benefiting as well. Astorga cited increased business efficiencies, cost savings and improved employee engagement since launching ANN Cares 360.

Companies should view social responsibility as an opportunity to differentiate their brand and gain a competitive advantage, Astorga said. ANN Inc. has built a separate corporate social responsibility website to promote its good deeds to consumers.