Roundtable: Does Giving Sell?
I sat down early yesterday morning -- on Corporate Philanthropy Day -- at the New York Stock Exchange with the top giving executives of Alcoa, General Mills, Intel, and Capital One Bank. We talked a bit about the latest philanthropy trends in the corporate sector and how critical it's getting to try proving impact. It's a challenge that companies now share with nonprofits.
According to the Committee Encouraging Corporate Philanthropy, a group of business CEOs convened by the late actor Paul Newman to push corporations to give more, less than 1 percent of corporate profits go to charity and philanthropy. Amid public polls showing higher-than-ever public distrust of corporations, the CECP is urging member companies (including those represented by these four women) to start measuring the impact of their giving. It's not enough to say they're making a difference, the CECP says. Better to prove it, so as to be more credible and strategic about their programs.
What follows is an edited transcript of that conversation:
Jean-Paul Garnier, on the CECP board and the CEO of GlaxoSmithKline, told me in a 2008 interview that "public trust has gone down, and in a way, philanthropy gets us on the right side of the ledger." Public trust in corporations is even lower today than it was two years ago and corporate giving is still stuck at under 1 percent of profits. How much can measuring impact help to boost the public's perception of corporate citizenship?
LUGAR: Quite a bit. But just as significantly, measuring impact also helps companies internally. The (CECP's) initiative here is also about helping more corporate giving professionals prove the strategic importance of their work to their corporate boards. ...Many (corporate giving professionals) cite measurement as their primary management challenge and this will help to give those engaged in this work in this sector an exciting new opportunity to identify the most promising steps forward.
ARCHELL: Let me add to that. This is about doing more to align the work of the foundation with the business. We're seeing this evolving. There is now an expectation from the company that its foundation will start applying the metrics and rigor to what it gives, to see that what we're funding is, indeed, having an impact -- and if it's not, then making sure we start shifting our focus to giving areas that will.
That less-than-1-percent spending figure isn't changing, but some companies are pushing harder to develop their corporate volunteer programs -- engaging employees already keen to give to do it on the job, under the corporate brand. This has obvious marketing benefits for companies, as well as benefits for the community. It also tends to be a good retention and recruitment tool for some companies.
ARCHELL: In 2006, we had 12 percent of our employees volunteering. Last year, engagement was up to 37 percent. Anecdotally, Generation Y is much more socially-minded and interested in working at companies that have reputations for innovative giving programs. Volunteerism is something that is also seen as going beyond 'checkbook philanthropy.' Beyond that, we're also becoming more strategic about the philanthropy we do engage in. For the past year, we've been refocusing our efforts within the context of the downward trend in the external environment, developing a series of programs in the manufacturing belt, for example, to help people firm up and update a shakiness in skills.
HAWKINS: We support what our employees are doing, whether matching time or money, and that comes to about $20 million a year. Another $80 million goes into direct philanthropy, and almost all of that is in the form of funding for better education. (Our employee matching program) is a very popular program, here and around the world -- so popular that it nearly blew us away last year (laughter). This is part of a trend, but also the realization that the full extent of what we are as a corporation is not just about philanthropic dollars, but also time, the energy of our employees, the pro bono help we can offer to those who need it, and the targeting of our in-kind giving -- even the production of some products from the start that are made specifically for people tackling solutions to social problems. Corporate philanthropy today is all of those things together.
LUGAR: At General Mills, 82 percent of our employees volunteer. The other place where our board and corporate boards in general now want to know, is, 'What's the sweet spot for General Mills regarding our philanthropy? How does it connect with business strategy?' So we now focus a lot of our work on hunger and empowering women through working with CARE and other nonprofits and programs, investing in agriculture in Africa, and now China, and we're also using many of our R&D employees to help transfer their technical skills to help.
We've heard of "greenwashing" -- the term used to describe efforts by companies to dispel criticism of their environmental policies by touting green initiatives but falling short when it comes time to deliver. Another term is gaining currency -- "cause-washing." As the directors of corporate giving arms, it's a tough sell out there. How do you meet this challenge?
ARCHELL: Any initiative that encourages companies to start measuring their philanthropic impact on a community is really welcome in that regard. I think all the programs we're running are having a significant impact, of course. But it's one thing for me to say it and another to have the metrics to prove it. We have a stronger story to tell if the people we're helping can talk about how we made a difference in terms that everyone can understand.
LUGAR: The field is looking for more accountability, so the CECP's initiative is being very well-received so far by corporations that have been trying to explain more precisely the impact, or even to convince the board that more such activity can "pay." ... Corporate boards want to see ROI and this initiative gives those of us working in (corporate foundations) new impetus to go after the kind of projects that can be measured ... and to be more strategic about focusing our time and money.
HAWKINS: We're a company of engineers and so we love to measure. (laughter) ... Corporate foundations are one of the ways by which the corporation engages with the outside world. We're active in education, so one of the first things we did as a foundation was develop a tool with which to train teachers how to use technology, because they were saying they were afraid of technology and of the students. So now we've trained 7.5 million teachers around the world, and out of that initiative, which began purely as a philanthropic initiative, the company is now looking around and saying there's a market out there, and it's developed an entire branch (of the company) that focuses on education and technology, triggered largely by the experience of philanthropic engagement in this community. I think we're going to be seeing more of this type of thing, where philanthropic engagement leads to new products and new forms of engagement with the communities we serve (commercially).
Pepsi Refresh is one of the first social media experiments in the sector aimed at boosting public-private collaboration around philanthropy. How is the Web changing your company's approaches to giving?
HAWKINS: We live and breathe technology because of who we are. We are using social networking to supplement many of our programs and to engage the public and advocate for the things we care about. We also have a lot of student competition programs in science and technology; we are engaging in a lot of online contests, dialogues, mentoring programs and judging. The Intel-Berkeley Technology Entrepreneurship Challenge is all about supporting entrepreneurship and innovation. At our science competitions, kids show up with patents or patents pending. It's in the water in which we swim.
ARCHELL: We've been watching this space for a while, and we're launching a new partnership with the EarthWatch Institute, working with them to place environmental experts and teachers into the field in various parts of the world -- Kenya and South America -- and we will be having them report back, live, via the Web into suburban classrooms about environmental sustainability. This is about giving kids exposure to places they could not travel to themselves, and we look forward to developing this further.
LUGAR: We just launched an online community partnership with CARE that's called Join My Village. General Mills is focused on hunger as a cause. This online project with CARE works with 75 African villages; women in this country, families, anyone can go onto the Web site, 'join' the village and hear the stories of the women who live there, and then contribute in a personal way to those villages, to help those women achieve their dreams. Social media used in this way, either alone or partnering with a nonprofit, can empower women and help us work on hunger issues in Africa.
COOPER: We have bank branches run by students as part of our community programs, and clearly, media coverage about our activities can be a powerful incentive, and so we are trying to actively get the story out there, using traditional media and new media, letting kids themselves tell the stories about how their volunteer work is helping people and changing their lives. Are there more such stories that need to be told? I believe there are and technology can help.
All four of you happen to be women; is this a fluke or are the majority of people leading corporate philanthropy arms these days women?
HAWKINS: I do see that women seem to be more present (in corporate foundations) but there is an opportunity for women to come in at the leadership role. Often women have tended to be more present at the staff level of some of these foundations and even today, I'd say that corporations could do more in terms of hiring women as top leaders of their philanthropic operations. There's no question about what's going on at my company -- I'm a woman -- but around the table, I often see men brought in from outside to lead foundations where much of the work has been done by women.
-- Marcia Stepanek
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