Drawing on research by Corporate Citizenship, Victoria Hartley compares the development of corporate foundations to that of children – and says that it’s time for them to grow up.
This month, Corporate Citizenship launched Corporate Foundations, a global perspective, the fourth in a series of research-based reports into corporate foundations – “non-profit bodies established by companies for the purposes of social and community investment” – which we have compiled over the last 6 years. Our aim has always been to provide some basic data on the field, insight into the experiences and challenges of corporate foundations, but also to continue to develop thinking on the potential benefits of what remains a globally popular model.
We presented our findings to an audience of over 30 company and foundation representatives, as well as Jon Leach – The Good Relation Group’s Head of Planning. Following the event, Jon succinctly brought together a set of thoughts that we had been mulling over into one single analogy – the cycle of life. Through this analogy he suggests that the development and changes corporate foundations go through over time reflect a lifecycle which passes through five key phases:
‘The Child’: things are new, untainted and the child exists as a separate entity from its parent. Naïve, perhaps but full of hope and potential.
‘The Teenager’: the entity flexes its muscles, telling the world (including the parent) where it is going wrong.
‘The Young Adult’: the entity re-engages with its parent, and often collaborates with them for mutual benefit.
‘The Mature Adult’: the entity engages with the true complexity of the world (seeing both the flaws and the strengths of the parent, and indeed its own limitations) and contemplates what its own “children” – the next generation, need to be about.
‘Death’: the entity ceases to exist but its legacy lives on in the next generation – the new child – and so we start again.
While in our experience a straightforward transition through those stages is rare, the analogy certainly helps to explain some of the trends we have seen through our years of research and client work – both in the development of individual foundations and in the sector as a whole.
The ‘teenager’ phase certainly feels familiar, with many foundations having to work through what is not always an easy relationship with their founder. The foundation relies upon the company (at the very least) for funding, and as a result its very existence. While this brings a bond that cannot (and in our eyes should not) be ignored, establishing a sense of identity and worth is key to many corporate foundations. Some foundations spend a disproportionate amount of time, energy and resource on this relationship rather than on what the foundation can actually achieve.
The relationship between foundations and their founders can also become strained as a result of external pressures – for example, negative attention on the potential for the foundation to deliver benefits to the business. This can force a gap between the two, obstructing collaboration and, to use Jon’s analogy, the move to young adulthood.
It is only once foundations reach adulthood that the full benefits of the model become apparent. Excitingly, we are seeing an increasing number of corporate foundations move towards a more collaborative approach with their founders which focuses – as the Z Zurich, Shell and Vodafone foundations have – on the social impact that the foundation and company can jointly deliver as a result of their collective resources and efforts.
It is our hope that more and more foundations will move towards this stage. But for this to happen there needs to be a refocusing of priorities. Of course, we need to ensure that the foundation exists primarily for social rather than business benefits. However, for highly regulated sectors such as the pharmaceutical sector, the spotlight on the relationship between foundation and business can become stifling and so constrictive that the foundation is unable to move forwards to a space that can deliver fuller benefit to society.
In a world where transparency is key to trust, and reputation is built on what you do, do we still need to monitor this relationship so closely? Can we not focus instead on the huge social benefit a corporate foundation can deliver when it draws on the skills and experience of the business, and enables the business to develop sustainable solutions to social issues?
Imagine the essence of a young adult, who has the interest, spirit, enthusiasm and commitment needed to change the world, but with the backing of a more experienced parent company who sees things from a different perspective and has the resources and knowledge to help ensure success. Unlock this and we can unlock the true potential of what remains a popular and globally relevant model.
COMMENTS