Posted on 10th June 2010
A new report from the Committee Encouraging Corporate Philanthropy (CECP), a US-based international corporate philanthropy forum of senior business executives, looks at the future for corporate philanthropy in the next decade and concludes that businesses need to ‘take an active role in solving social problems in a way that simultaneously delivers tangible bottom-line results (either by reducing costs or increasing revenues).’
CECP director, Margaret Coady told Philanthropy UK, “Philanthropy and goodwill will always be important to the behaviour of a business, but there is a chance to bring business goals and social goals together into one mutually-reinforcing corporate strategy.
“In the next decade, we will see corporations taking a more active role in addressing social problems, rather than being reactive or supporting others who are engaged from a distance. In a CECP poll of corporate CEOs taken in February 2010 and published in the report, 50% believe they should drive the solution and 42% believe they should proactively collaborate on problem-solving.
“This interest is driven by a sense that the only enduring way forward is to step away from the ‘race to the bottom’ created by short-termism and instead pursue the ‘upward spiral’ of sustainable value creation.”
The report describes a ‘sustainable value creation approach’. An example of this would be where a large company needs more manufacturing capacity in India but was thwarted by a lack of appropriately skilled staff there. The sustainable value approach would be to collaborate with local government and NGOs to develop training programs. This approach would result in increased profits for the company coupled with clear benefits for the local population in terms of education and employment.
Collaboration and partnership working are identified as key ways for a company to combine achievement of social and corporate goals. Coady expanded on this, “In some ways, companies are experts at making partnerships work - most multinational companies couldn’t function without a web of vendors, suppliers, distributors, and sub-contractors helping to make the business run. However, collaborating to solve social issues provides its own unique set of opportunities and challenges, which businesses have yet to master. Small-scale, collaborative pilot projects can be one way to build solid working relationships for bigger projects down the road.”
Jake Hyman, chief executive of the UK-based Social Investment Consultancy, commenting on the report’s findings, said, “In the UK, companies are moving away from the traditional mode of philanthropy, simply writing cheques to charities, and engaging in smarter ways of working with resources they already have to increase the impact of their giving. Smarter working often means working in partnership with charities, finding creative ways to use the core skills a business already has to meet social goals and finding ways of improving brand recognition and customer engagement.
“I think it’s a hard sell to convince companies that this is going to have a calculable effect on their bottom lines, but if you show them the benefits of what I would call a social enterprise way of giving, they’re likely to go for that.”
Some corporates already seem to have grasped the message. Johnson & Johnson’s chairman and CEO Bill Weldon told the report’s authors, “We all have to contribute to sustainable solutions over time - not any one group can do it alone. You cannot assume that everyone else will address the problem and that you do not have to engage. If we do not align ourselves and work in a collective way on these social issues, everybody will be worse off.”
Weldon also sounds a note of optimism, “As long as we’re aligned around our objectives - and there is trust and transparency - it is not hard to get organisations to work together to develop better solutions to the world’s problems.”
The report is available for download at the CECP website.
