Www.fsg-impact.org Boston Geneva San Francisco Seattle Trends and Perspectives in Corporate...

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Boston Geneva San Francisco Seattle

Trends and Perspectives in Corporate Philanthropy

Webinar for Assifero

November 11, 2010

© FSG Social Impact Advisors2

Goals for this Webinar

Goals

• Share three new important trends in corporate philanthropy

• Highlight what these trends mean in practice through examples

• Hear from Assifero members about their own corporate philanthropy

3 © FSG Social Impact Advisors

Since Its Inception in 2000, FSG Has Combined Consulting, Thought Leadership and Advocacy to Facilitate Greater Social Impact

Overview of FSG

Sample PublicationsOverview

Functional Expertise

• Strategy and Program Development

• Evaluation

• Organizational Alignment

• Strategy Implementation

Topical Expertise

• Global Development

• Global and US Health

• Youth & Education

• Corporate Social Responsibility

• Environment

• Community-Based Philanthropy

Client Spectrum

Corporations:

Foundations:

Nonprofits:

Government:


Dalla sua creazione nel 2000, FSG ha combinato l’attività di consluenza, leadership e sensiblizzazione per promuovere un maggiore impatto

Panoramica su FSG

Esempi di PubblicazioniPanoramica

Competenze funzionali

• Sviluppo di strategie e programmi

• Valutazione

• Allineamento organizzativo

• Implementazione strategica

Competenze tematiche

• Sviluppo globale

• Salute negli USA e nel mondo

• Giovani e educazione

• Responsabilità sociale d’impresa

• Ambiente

• Filantropia di comunità

Clienti

Corporations:

Foundations:

Nonprofits:

Government:


We Have Seen Three Important Shifts in Corporate Philanthropy

These shifts are linked and often occur simultaneously

Goals Tools Scope

Purely charitable

Aligned to business context

Cash donations

Multiple corporate assets

Alone

With Partners

Overview of Corporate Philanthropy Trends


Companies Are Realizing that Corporate Philanthropy Can Create Value for Society and the Business

Aligned Corporate PhilanthropyTraditional Philanthropy

• In traditional philanthropy, companies donate to good causes, without thinking about how this relates to their business

• Companies simply want to do good

• Philanthropy happens outside the core business as a separate function and is seen mostly as a cost

• In times of economic trouble, companies may reduce traditional philanthropy as it is not strategic to the business

• Aligned philanthropystarts with the notionthat strong companies need strong societies

• The competitiveness of companies depends on:– Improving skill levels – Safe working conditions – Equal opportunity– Low levels of pollution – A transparent, corruption-free business environment

• The health of a society depends on:– A strong economy– Employable workers– Absence of discrimination– Low levels of pollution– Citizen engagement and sound government– Strong cultural, educational and research institutions

Corporate philanthropy can address both at once

Goals: From Charitable to Business Context

Economic Objectives

Social Objectives


The Following Examples Illustrate this Shift

Goals: From Charitable to Business Context - Examples

• Creating Shared Value is a fundamental part of Nestlé's way of doing business that focuses on specific areas of core business activities – namely water, nutrition, and rural development

• Nestle invests millions each year to ensure the communities it sources from can develop sustainably and improve livelihoods

• JPMorgan Chase announced this summer that it was making $325M available to support construction of new schools ($50M in grants, $175M in debt financing, and $100M in tax-credit equity)

• This way, JPM Chase can support the education reform movement, while expanding its product offering

• Cisco faced a growth constraint due to lack of trained IT workers; developing countries have limited job opportunities for its youth

• In response, Cisco built 10,000 network training academies around the world, which have trained more than 3 million people since 1997

• Both Cisco and society have benefitted from this investment


As Companies Seek to Achieve More Ambitious Goals, They Are Using More Tools in Their Corporate Social Engagement

Multi-Faceted Corporate PhilanthropyTraditional Philanthropy

• In traditional philanthropy, the main vehicle for doing good is cash donations, either directly from the company, or through a company foundation

• The relationship between company and nonprofit grantee is one-sided, whereby the company provides the cash to the grantee, but no other value creation takes place

• Companies don’t view grantees as partners that can also help the company learn and grow

• Recently, companies are seeing that they have several assets beyond cash donations that can be helpful in meeting their social and business goals:

– Corporate volunteering, especially skills-based volunteering

– Product donations, for example IT software or hardware

– Lobbying, for example advocating for policy change on key social issues

– Knowledge transfer, for example on logistics or health care

– Product innovation, for example financial services or nutrition

• Corporations are also seeing their nonprofit grantees as partners that can teach corporations new knowledge and skills

Tools: From Cash Donations to Corporate Assets



Tools: From Cash Donations to Corporate Assets - Examples

• IBM’s “corporate Peace Corps” sends future leaders to developing countries to work in teams on projects where information technology can foster economic development

• The communities benefit from the IT and skills transfer; IBM staff members benefit from leadership training

• DHL send teams to airports near disaster areas so that the team can manage the logistics of incoming aid shipments

• DHL has teams on stand-by in every part of the world

• The company is also training airports proactively so that they can eventually manage disaster logistics on their own

• The UK housing sector is under pressure to deliver high quality homes and services at an affordable cost

• In 2009, Barclays provided Waterloo Housing Group with £100 million in new debt finance which will enable the construction of 2,000 affordable homes


Sometimes, One Corporation’s Assets Are Not Enough – Partnerships Among Several Companies Are Needed

Cooperative Corporate PhilanthropyTraditional Philanthropy

• Traditional corporate philanthropy often happens in isolation

• While companies of course partner with local nonprofits and community organisations, they often do not partner with other companies

• However, if companies truly want to solve social problems that are challenging their competitive context, it will become increasingly important to work together with peers and competitors

• Partnering with other companies can be difficult due to competitive tensions

• However, the benefits of multiple corporate partners can outweigh the challenges, for example:

– More resources: the more companies that participate, the more resources will be available for the issue

– More types of resources and expertise: each company that participates can contribute what it is best at, whether it is products, knowledge, staff, etc.

– “Louder voice”: if the social issue being addressed by the partnership ultimately requires the public sector to step in, having a coalition will improve the chances of being heard by the government and other important actors

Scope: From Individual Action to Partnerships



Scope: From Individual Action to Partnerships - Examples

• Many of the world’s leading agricultural input companies seek to develop markets for smallholder farmers (<2 ha)

• However, alone, none of them can address this complex issue successfully at scale

• Thus, six companies and a corporate foundation have launched the “Smallholder Coalition” to work on smallholder development together in Africa and India

• The Bertelsmann Foundation has created regional cooperatives of small and medium-sized companies that together work on social issues in their region

• The companies were asked to identify their most pressing competitive constraint in the next 20 years and to then make a plan to work together to address this constraint

• For example, in one region the companies are all working together, in partnership with local government, schools, and nonprofits, to expand science education, from kindergarten through university

• None of the companies could have tackled this alone


This Example Combines an Aligned Goal, an Innovative Approach and a Consortium of Companies Working Together

Goals, Tools and Scope: Advocating for Education Reform in Connecticut

• In October, a group of companies in Connecticut – mostly banks – began advocating for education reform efforts that they see as crucial for long-term competitiveness

• For example, the companies are asking for:

– Full-day kindergarten

– Longer school days and an extended school year

– More subsidies for preschool for low-income students

– Programs to attract highly qualified teachers in defined shortage areas

• This is an example of companies focusing on a common topic, education, but rather than providing individual grants, they are coming together to lobby for policy change – which has a much greater impact long-term


Reflection Questions

• Can philanthropy play a role for business challenges or opportunities at your company?

• Are there other corporate assets in the company that can help with your philanthropic efforts?

• Are there companies in your community that you could partner with?

Reflection Questions

We can discuss these now, and/or you can bring these up in your foundation

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