Corporate Citizenship Sustainability, Simplified.
The future of Corporate Foundations A global perspective March 2014
Overview of today: • • • •
Background to the research Presentation of key findings Conclusions Open discussion - key themes, next steps
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Introduction Corporate Citizenship has a longstanding interest in corporate foundations: 1) Previous research
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Introduction 2) We have worked with many corporate foundation clients: – Answering the big question – do we need a Foundation? – Advising on the role and purpose of a foundation – Developing and reviewing the strategy and ensuring it is ‘fit for purpose’ – Researching and brokering partnerships for corporate foundations – Establishing measurement frameworks to assess programme impact
From this we know Foundations remain popular and relevant
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Our objectives  Explore the distinctive characteristics of corporate foundations  Provide better understanding of the issues and experiences corporate foundations face, globally  Continue to facilitate interesting discussion
Ultimately, to help improve practice and maximise the impact of the corporate foundations model
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Methodology
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Methodology We explored: Background and history Activities Geographical focus Relevance of activities to funding company Relationship with company
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Why a foundation? Background and history Idiosyncratic Variation within as well as between regions / countries
Trends
History and context Provide structure and focus Useful tool – systematic and accountable Consolidation of CSR activity Reputational boost - visible commitment to society / issue State of flux – impacted by businesses’ life cycle
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Case study The Anglo American Group Foundation was set up in 2005 to replace the existing donations committee which, with no formal assessment process, was making grants perceived as reactive and quite ad hoc. The foundation was created to bring structure, rigour, transparency and clarity.
The Toyota Foundation was originally established in 1974 to commemorate Toyota Motor’s 40th year in the automobile industry.
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Benefits Internal and external clarity - a rationale to say no Structure and rigour Public expression of long term commitment to ‘do good’ Ring fenced funding which leads to greater sustainability for the lifetime of the commitment Able to operate outside direct business framework/objectives Ability to develop expertise and tackle longer term issues Able to engage successfully with external partners Can utilise business acumen / skills for social benefit
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Challenges Inflexible and not useful in all circumstances The lack of accountability ‘internally’ Lack of impact measurement (changing) Reputational risk associated with relationship with the funder Changing role as CR becomes more strategic Mismatch between funding and partnership commitment Resource heavy
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Nature of support More ‘hands on’ than ‘hands off’ Move away from traditional ‘grant giving’ model Very few making ‘reactive’ grants Proactive – seeking to create opportunities Fewer, bigger, better – strategic partnerships Increased expectation on delivery
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Geographical trends Influenced more by company, brand and circumstances than geography Differences perhaps lie in international versus domestic To a degree reflect the expectation of business in the area All foundations funded in the country they were set up in A majority funded more in their own country than internationally India, Asia appeared to be more focused in country / region
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Relationship with the business
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Relationship with the business All demonstrated elements of both integrated and independent approach Boards varied – internal trustees were often senior, external often bring expertise / regional gravitas Staffing varied significantly Funding also varied – but few had any long term commitment Employee volunteering – a must for some, avoided by others Many were reviewing – strategic, business aligned; However, still some caution around alignment within specific sectors Virtually all avoided pump priming / catalytic funding Blurring of lines between foundation and businesses social interest
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Case Study The Z Zurich foundation focuses on building resilience to natural disasters, with a particular focus on floods. The foundation’s close alignment with Zurich’s core activities and long-term business interests allows it to achieve a greater and more sustained impact. The program can draw on the foundation’s resources and harness the knowledge and networks of the organizations it cooperates with, while at the same time benefit from Zurich’s risk management and insurance expertise through an employee secondment program. This collaborative approach each entity to go beyond what each entity could achieve on its own to reach scale and achieve a lasting, transformative impact. Sustainability, simplified
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Case study The Shell Foundation adopts an “enterprise-based approach”, a new model for philanthropy which aims to identify the market failures that underpin global issues and co-create new enterprises and market enablers to solve them. The foundation has a small portfolio of approx. 20 long term strategic partners that receive patient grant funding, extensive “non-financial” business support and market linkages to help them validate new models, achieve financial independence and build the capacity to operate on a global scale.
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Case study Vodafone Foundation’s portfolio includes programmes which begin as philanthropic using ‘catalytic funding’ from the Foundation, but are then brought to scale by the company – for no profit. An example of this is TecSOS, a specially adapted mobile phone which provides support for victims of domestic violence. Vodafone has worked with the police, and more than 29,000 women have used it so far in the UK.
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Conclusions So we know corporate foundations remain a popular global tool for corporate giving, with clear benefits of the model to business and society
But what is the added benefit?
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Additional thoughts – the future of the global corporate foundation Leading foundations are finding a successful combination of doing the right thing, with the additional business expertise to problem solve in an innovative way Whilst some sectors are playing it safe others are creating models which acknowledge the legislative framework but can still deliver a completely different approach Corporate foundations are an established part of global language of business
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Additional thoughts New types of partnerships are emerging – progressive, problem solving, sustainable Impact measurement is of increasing importance
The AbbVie Foundation is looking to take a more long-term view in the future. Its goal is that a majority of programs will run for at least 3-5 years with foundation support – ultimately transitioning the majority of support to local sustainability. Success for the Foundation is having a selfsufficient program in 5 (or more) years, where the community has been made accountable and part of the solution. Sustainability, simplified
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Discussion In a world where we face massive social and environmental challenges we all recognise that no one sector can solve these pressing issues. A greater emphasis on partnership between sectors creates a role for corporate foundations to broker relationship with business and NGO’s. as well as governments. To do this foundation need not only to have good robust relationships with external partners but the need to maintain similar strong relationships with their funders.
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