The traditional approach is well-meaning.  It is largely an act of charitable giving or philanthropy. It measures input including cash, time and gifts in kind. It is disparate and often unaligned to the core purpose or strategy of the business. It is usually not designed to achieve real measurable social or business benefit. It is often driven by employee interest (usually assumed and not often measured).

Newer approaches to community engagement are strategic. Causes are aligned to the core business. The dominant audiences are customers, employees, communities and partners. People are given power to deliver real change within a framework. Delivery is integrated and involves collaboration. The aim is to achieve real measurable social and business impact.

In practice, we would differentiate between three main strategies (philanthropic, pragmatic and strategic) and it is possible (and often preferable) to have a corporate programme that embraces them all. It is also possible to have leading edge examples in each area.

Philanthropic programmes (tier one) involve giving something back. An innovation includes engaging customers in proposing charitable projects e.g. the Pepsi Refresh project. 
 
Pragmatic programmes (tier two) aim to achieve measurable community and business outcomes. The tools used in this category are strategic community investment, cause related marketing and customer behaviour change (also called social marketing).

One example of a pragmatic programme is a Procter & Gamble Pampers project. They formed an alliance with Unicef to eliminate maternal and neo-natal tetanus which kills 128,000 people a year. Another would be Citizens Bank support for The Growing Communities initiative to enhance the neighbourhood surrounding the West Side Market of the City of Cleveland. The opportunity for business to engage in collaborative transformation is huge.

Strategic programmes (tier three) involve the development of business strategies which integrate social and community action. Community engagement here contributes directly to long-term commercial success. Organisations which make this link include IBM, Intel, GSK, General Electric, Centrica and Anglian Water. 

One useful reference source is the IFC quick guide on strategic community investment available here.