Mechanism of financing corporate social responsibility

In the current conditions of transformation of the national economy, corporate social responsibility (CSR) acquires the features of a strategic tool for ensuring sustainable development of enterprises. The lack of a systematic approach to financing CSR programs complicates their integration into the budgeting structure, therefore, there is a need to form an effective mechanism for financial support of socially responsible activities. The paper develops a practical model of financing corporate social responsibility that integrates CSR into the general system of financial planning of the enterprise. The optimal level of CSR financing is determined within 1,1–1,5 % of net profit, which ensures a balance between economic profitability and social effect. The scientific novelty lies in the formation of an integrated model of CSR financing that combines economic, social, reputational and innovative components through a system of quantitative indicators, as well as in the development of an integral index of the effectiveness of the CSR mechanism as a generalized indicator of the effectiveness of social investments. The model is adapted to the industry conditions of IT business and can be used for internal financial planning and external non-financial reporting. It has been proven that the implementation of CSR projects increases profitability, strengthens the company's business reputation and promotes sustainable development. The developed mechanism for financing corporate social responsibility ensures: increasing the share of socially oriented expenses in the structure of operating resources to 1,1 % without reducing business profitability; forming a stable reporting system according to GRI and ISO 26000 standards; increasing the integral efficiency of CSR by 0,83 points over 5 years. As a result, corporate social responsibility for the enterprise turns into a strategic tool for managing the value of the enterprise, ensuring a stable balance between economic performance, social welfare and corporate reputation.