There are many opportunities for business to work with charities on community projects, but what can directors from the for-profit sector learn from third sector leaders to ensure that such ventures are successful for both the community and the business?

Companies, like individuals, need to interact with society, says Simon Hamilton, director of community involvement consultancy Three Hands. "I don't think any company can just plonk itself into a community and put up barbed wire," he says. Isolation is unhealthy because it diminishes a company's likelihood of success, he adds.

Companies need to be "rooted" in the communities where they work and sell their products, says community impact director of Business in the Community (BITC) Graham Russell. Why? Because firms have a better understanding of the society in which they work, as well as how local issues affect their employees. They enhance their reputation and visibility, bringing new business and talent into the organisation. And they gain a wider perspective which can lead to new market opportunities.

He cites BITC member Lloyds TSB as an example. It's the leading provider of bank accounts to Polish workers, an "under-served" market, thanks to its community activities. Russell says companies shouldn't be embarrassed about seeking business advantage through community involvement, as long as there is also a serious commitment to making a lasting impact in the community. And the benefits need to be measurable. "They become the energy and fuel which maintains the enthusiasm," he says.

And according to 2005 research by CSV, a volunteering charity, 83 per cent of employees prefer to work for companies with an employee volunteering project. It also found that nearly half of companies find that employee volunteering reduces absenteeism and improves morale. "Good" employers, who give something back to their community, have better staff retention, it said.

But if community involvement is to succeed, companies need to understand the requirements of both the charity and the people served. "In trying to do good, there's a danger that it becomes a CSR box-ticking exercise," says Edward Hodgkins, director of fundraising for homeless charity Centrepoint. "Don't assume because you're a successful company that you can immediately be successful at solving people's problems," he adds.

It's the quality, not quantity, of resource and commitment that counts, continues Hodgkins. And where large corporates may support overseas community projects, local projects make more sense for smaller companies, says Hamilton.

These can range from enhancing a school playground to improving employability by providing a work placement or starting an enterprise club for local teenagers. As Dame Elisabeth Hoodless, executive director of CSV, says: "Talk to your employees because they are likely to live locally and will know what needs doing. They are your best source of local intelligence. Get the chemistry right, then community involvement will grow organically."