To link or not to link – insights from corporate foundations

 

Theresa Gehringer

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On the second day of the Corporate Foundations Knowledge Exchange, conference participants discussed in several working groups, ideas related to Mission and Practice.

Three issues were focused on within discussions about best and effective practice in the achievement of a foundation’s purpose: grant making and other forms of financial investment, employee engagement in the corporate foundation and questions of if, and how, the work of a foundation complements a company’s Corporate Social Responsibility (CSR) activity.

A popular topic of discussion amongst the attendees was the relationship between a corporate foundation and its funding corporation. Maybe because of that, I found myself alongside twenty five participants curious about the CSR-foundation link. Two of the presenters at the conference, Vincent Faber from the Trafigura Foundation and Sian Edwards from the Andrews Charitable Trust (ACT) were able to give us more information into this. Both directors started with intriguing insights into the work of their foundation and how it is related to the founding company.

The Andrews Charitable Trust was a special case among the participants, since it holds shares of the company itself. Cecil Jackson-Cole, the founder of the estate agency Andrews, put the company into the ownership of three charitable trusts before he died in 1979 – the ACT being the principal shareholder. Today, ACT focuses on venture philanthropy and seed-funds innovative social projects.

The Trafigura Foundation is an interesting case in another way, as they’ve undergone a major strategy shift, or turning point, this year. They shifted from being rather detached from issues which are related to the core business of the founding company, to a more strategic and content-driven alignment of the foundation’s work. They now focus on sector specific topics in the field of commodity trading and logistics.

However, the thematic ‘reconnection’ of the foundation’s activities does not in any way mean a structured connection to a CSR department, as Vincent Faber indicated. Today, the Trafigura Foundation supports 51 programs running across 29 countries in the three focus areas of Sustainable Development, Education & Integration and Health.

Taking those two examples as a starting point, the following discussion revolved mainly around three levels: first, a personal one, questioning whether the foundations present have a well-established link to a person in charge of CSR or any other department in the company. Second, a content-related point, stating that the roles of the foundation and the company seem fuzzy for external stakeholders, which results in false perceptions about responsibilities and duties. And third, on an inter-organizational level, discussing the challenges for the foundation of being closer or further away from a company’s CSR activities. This is problematic, for example, with regard to reputational or reporting issues.

It became increasingly apparent during the debate that finding the right resonance for the foundation’s work in the company is a crucial aspect of the CSR-foundation link. Establishing an understanding of the foundation’s work and importance among company employees is a necessary precondition for any potential collaboration between the company and the foundation.

Nevertheless, it remains a challenging task for a corporate foundation to balance its mission for the public good with the expectations of its ‘for-profit’ oriented company. The participants shared for example their difficulties in being a part of their founding company’s CSR reporting initiatives.

How can good practice look like? Unfortunately there was no time left to advance the discussion from an exchange of past hand-on experiences to recommendations and more general applicable guidelines that would help corporate foundations find a clear strategy here. In the last minutes the discussion came back to the crux question of ‘what is CSR’?

Although some may suggest common sense in a group of like-minded representatives of a specific type of foundations, it became once again clear that there are as many different opinions as there were participants. At least the corporate foundation and its founding company should have a clear understanding of their roles, as it will affect the discussion to what degree the corporate foundation complements the CSR activities of the company.

The need to talk about practices on this specific topic has been very clearly shown in the workshop I attended and will undoubtedly remain a hot topic for future debates.

Theresa Gehringer is a research assistant at the Center for Philanthropy Studies at the University of Basel.

 


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