Corporate foundations consider risks and opportunities

 

James Magowan

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DAFNE held its third European Corporate Foundations Knowledge Exchange, in association this year with Assifero, in Italy, hosted by Fondazione Sicilia. Over 70 delegates from 11 countries participated. This Knowledge Exchange will be remembered for its welcome and warmth, its sights and insights, and the building of relationships between people and places.

Building on Knowledge Exchanges in Fontainebleau and Zurich, the richness of the diversity and energy of the city of Palermo combined to encourage open and productive discussions around the complexities of the relationship between corporate foundations and their funding companies.

The Exchange highlighted the differences that exist throughout Europe (both between countries but also within countries) in the way the relationship between corporate foundations and their funders impacts on their governance, mission, and practice. This relationship is what makes corporate foundations distinctive, compared to other types of foundation. However, it also identified common challenges in making the most of the relationship, including utilizing all of the assets (including people, networks and brand), maximizing impact, and deploying innovative approaches. The risks and opportunities were explored through highly engaging interactive sessions and participants cited many takeaways from the learning from others for practical actions at foundation level but also for national associations in how they to continue to support their foundation members. A number of key issues emerged.

Firstly in respect of alignment between the corporate foundation and the parent company it was acknowledged that alignment comes in many forms – from strategic to operational; that alignment should be a two way process (that it can inform the work of the foundation but also that the work of the foundation can inform the business practice of the company); that alignment can help clarify the distinctiveness of the role of the foundation and corporate CSR activity; and that alignment can help lever non-financial assets to achieve greater impact.

It was suggested however that each view the other through different lenses – with the company often having a relatively narrow and short-term perspective of the foundation, and the foundation being in a position to have a broader and longer-term perspective of the company and society. As a result their respective metrics may not be aligned, with corporations demanding quantitative data and valuing volume, whereas foundations seeing broader qualitative intangible impact based on values. Alignment thus perhaps means finding a way to adjust the lenses. It was acknowledged that alignment however does not come without risks and that care must be taken to ensure complementarity without compromising independence, and that the foundation conducting roles which should be the responsibility of the company or what might be perceived as ‘social / green washing’ are avoided.

Secondly, with regard to the use of non-financial assets, employee engagement was a topic which generated considerable discussion. The need to provide support to ensure that employees, acting as volunteers or mentors, can adapt to a charity environment and overcome ‘culture clashes’ and power imbalances was highlighted. Similarly, it was recognised the NGOs too, need to be properly prepared to accept and utilise what is being offered. Well managed schemes however have the potential to bring significant benefit to the social sector, to the employees involved, and ultimately back to the mission and operation of the company. In addition, the value of utilising other physical and less tangible assets such as networks and relationships; convening power; and brand leverage, were discussed. It was noted however that while a brand can lever resources and help build social capital around the foundation’s work, brand exposure, in particular in sensitive work, can bring reputational risk, and as such is potentially a constraining factor.

A third major point for consideration of risk and opportunity was around communications. Described as the ‘communications tightrope’, the challenge of finding an appropriate balance that is effective in reaching audiences within and outside the corporation, that can raise awareness of the work of the foundation within the field within which it works, and encourage corporate buy-in, while avoiding a perception of ‘window dressing’, was discussed.

In conclusion, the exchange of practice, exploiting the many opportunities to make the most of the relationship between the foundation and the company, provided most participants with something to take away. In relation to risk the suggestion was made that corporate foundations might consider undertaking a risk analysis relating to all aspects of the relationship – which could help develop an even more productive and mutually beneficial relationship.

James Magowan is Co-ordinating Director at DAFNE


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