corpor ate foundations in fontainebleau: a signific ant ‘first ’
Corporate Foundations
in Fontainebleau:
A significant ‘first’
Steffen Bethmann and Theresa Gehringer
More than 80 representatives from corporate foundations
and national foundation networks - the very first gathering of
corporate foundations from across Europe -came together on
5 and 6 December at the INSEAD campus in Fontainebleau at the
invitation ofDAFNE, the Donors and Foundations Networks in
Europe, and CFF, the Centre Français des Fonds et Fondations.
Steffen Bethmann
and Theresa
Gehringer are
researchers at
the Center for
Philanthropy Studies
at the University of
Basel.
Email:
steffen.bethmann
@unibas.ch
Email:
theresa.gehringer
@unibas.ch
It was entitled ‘Corporate Foundations Knowledge
Exchange’ and it lived up to its name. Links were
forged, a common identity began to take shape and
the central issue for the corporate foundation sector
in Europe was brought to light - the relationship of
corporate foundations with their founding company.
Opening the conference, both Beatrice de Durfort, the
Delegate General of CFF and Rosa Gallego, the Chair of
DAFNE outlined the importance of this first meeting
as an excellent opportunity to connect corporate foundations on a European level and the role of DAFNE as
an informal networking platform of 25 national foundation associations in Europe. They were followed by
Eric Ponsonnet, Director General of the Fondation
INSEAD and Craig Smith, INSEAD Chaired Professor
of Ethics and Social Responsibility.
Delegates at the Corporate Foundations
Knowledge Exchange.
According to Professor Smith, the role of corporate
foundations in the CSR research field is still new, even
though it is an emerging trend. CSR and sustainability
itself has evolved from a marginalized activity to an
important concept for a company’s operations. Today
there is much more recognition of the fundamental
and strategic role of CSR in a company’s environmental and social impact than in the early 2000s.
Research now gives more attention to the idea of creating shared value, the concept whereby business should
create social and economic value simultaneously-a
win-win situation for both sides. Nevertheless, making the business case for CSR or sustainability is not
simple and sometimes even not possible. This is where
Smith identifies an opportunity -possibly even an
emerging trend -for corporate foundations: first, to
work on social and environmental issues with a truly
long-term commitment.
Second, even though foundations’ activities are defined by their statutes they have the ability to act with
greater legitimacy, greater independence and even
greater honesty than the founding company.
Third, a corporate foundation is able to continue its
activities much more easily in times of economic
difficulties than the founding company because of
its legally independent set-up and long-term nature.
Closing his academic snapshot, he sees an important
and growing role for corporate foundations to address social and environmental issues in ways that
complement, and will go beyond, strategic CSR and
sustainability.
In the following opening plenary session Amanda
Jordan, Chair of the Trustee Board of the Association
of Charitable Foundations (ACF) and Co-founding
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corpor ate foundations in fontainebleau: a signific ant ‘first ’
Amanda Jordan,
Chair of the
Trustee Board of
the Association
of Charitable
Foundations.
Delegates at
the conference
‘marketplace’.
teamed up. Information about the specific national
background gave the context of the following presentation of one corporate foundation.
These were among others the Michelin Corporate
Foundation from France, the Orange Foundation from
Poland and the Innocent Foundation from the United
Kingdom. Magowan kept his promise about the bell
and participants in the marketplace would have definitely liked more time to intensify the exchange and
discussion.
Director of Corporate Citizenship, gave an overview
of the European corporate foundations environment
and challenges.
All corporate foundations, she said, are united by
four challenges: legal requirements that sometimes
become a barrier to the foundation’s mission, lack of
funds, reluctance on the part of trustees and persistent expectations from a wide range of stakeholders
which makes it difficult for a corporate foundation to
keep its focus.
Anne Ramonda, Executive Director of the Social
Economy and not for profit Department at Ernst &
Young, continued with an intriguing presentation
about corporate foundations in France. The discussion afterwards gave the chance to share perceptions
about trends - for example cooperation between corporate foundations and NPOs or foundations set up
by entrepreneurs and finally the use of social media
to create a social movement without the need to set
up a foundation, a development which challenges the
system itself.
Corporate Foundations market place
The main protagonist of the late afternoon session was
a bell, wielded by James Magowan, the Coordinating
Director of DAFNE and moderator of the conference,
who promised delegates that they would be sick of its
sound by the end of the session, which had the format of a marketplace. Participants gathered in small
groups and rotated every ten minutes to a new ‘vendor’.
Each of the seven positions in the circle represented
a country where the national association of foundations and a corporate foundation from the country
center for phil anthropy studies at the universit y of ba sel
Several key issues emerged from among all groups:
good governance, impact measurement, the composition of the board and the selection of beneficiaries.
A closing plenary discussion afterwards gave the opportunity to reflect together on these key issues and
to share ideas of what is needed to advance the work
of corporate foundations.
Lonneke
Roza from the
Rotterdam School
of Management
at Erasmus
University,
Rotterdam.
Governance
The second day started with an interactive workshop. Lonneke Roza from the Rotterdam School of
Management at the Erasmus University Rotterdam
and Steffen Bethmann (one of the authors of this
text) from the Center for Philanthropy Studies at the
corpor ate foundations in fontainebleau: a signific ant ‘first ’
University of Basel asked what effective governance of
corporate foundation means.
taking corporate interest into account. The open discussion, however, showed a trend for corporations to
integrate foundations more closely in economically
difficult times.
After all, corporate foundations are strange animals.
As independent legal institutions they are obliged
to fulfill a public purpose and seek effective ways to
achieve their mission. However, as corporate foundations are almost never truly independent they are also
subject to ‘for-profit market logic’. In their public and
private capacities, they are serving different masters
whose interests might not always be the same.
This may have some negative implications for the
freedom of the foundation, but it can also lead to new
opportunities. Some foundation managers talked
about new interest in the foundations. Being able to
make a strong case about their impact and benefit for
the company’s reputation enabled some to get more
funds and greater access to company resources.
A somewhat similar point was made by Andrew Milner
and Charles Keidan in their article on corporate foundations in the last edition of the
Alliance magazine.
In general, though, almost all agreed that long-term
funding contracts between the corporation and the
foundation are essential for the foundation’s ability
to plan its programmes.
Foundation representatives were
asked to rate the degree of independence from the funding
corporation on a worksheet.
The variables were organized by
the topics: board composition,
foundation staff, operations, funding, in-kind donations and public
appearance. Connecting the dots
on the work sheet gave a visual representation of the
governance structure, which enabled comparison
between foundations1.
Next, participants combined the relative degree of
independence of the foundation with the alignment
of the foundation with the core business of the company. Four different philanthropy styles emerged:
instrumental, reputational, complementary, and
purpose-driven, with each model having its positive
and negative aspects.
None was necessarily better than the others.
Corporate foundations have to find the governance
model that best helps them fulfill their aims -while
The CEPS
worksheet.
Mission alignment
The engaging discussion spilled over into five working groups on areas including education, solidarity
between different population groups, and arts and
culture which allowed the foundations to group
around their missions. The overarching topic was
mission alignment between the corporation and the
foundation.
Here again, the active involvement of all the participants was a thread that ran throughout the
conference. In each workshop a representative of one
national association played the role of moderator
while two foundations presented their work. Lloyds
bank’s mission, for example, is to ‘Help Britain Prosper
Again’.
The Lloyds Bank Foundation (LBF) explained how it
had picked up the motto, but in a complementary
manner. While the bank has a presence on almost
every high street, the foundation concentrates on the
most vulnerable of society, supporting people in the
back street - following its own mission of ‘breaking
disadvantages – bettering lives’.
The mission of the Syngenta Corporation and the
Syngenta Foundation for Sustainable Agriculture
foundation are more closely aligned. Both aim ‘to feed
the world’. The company is doing so by increasing the
productivity of medium and large farms. Syngenta’s
prime products are pesticides and seeds. The foundation however, concentrates on pre-commercial
farmers in the developing world. It provides them with
knowledge and expertise, helping them to make a living out of their land.
Both examples lead to one of the most discussed questions of the conference: how far can and should the
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corpor ate foundations in fontainebleau: a signific ant ‘first ’
work by an insurance company’s risk analysts for the
non-profit or communities the foundations work with
as the Zurich Foundation from Switzerland does.
Other alternatives to grantmaking can be to run
social institutions like, for example, the rehabilitation centre for sick children run by ING for Children
Foundation in Poland. Foundations may also make
use of one of the many new financial tools that are
gaining prominence in philanthropy such as impact
investments or social impact bonds. However, at least
among the participants, these were not popular yet.
missions of the corporation and the foundations
overlap? On the one hand, close alignment might be
seen as an attempt to use the foundation to increase
company profits.
Wrapping up
What did we learn from the two days? First, it became
evident that, while very different individually, corporate foundations in Europe share many commonalties.
On the other hand, an aligned mission may help the
foundation to leverage the expertise and networks
of the corporation to achieve its aims. Black-andwhite thinking does not seem to be the answer. What
became clear though is that a strong but dynamic
mission statement allows a corporate foundation to
strengthen its proper identity and hence its ability to
concentrate on the social impact it strives for, however
close the alignment with the founding company.
The practice of corporate foundations
But what do corporate foundations really do? This
was the topic of the next working groups. Three major
themes were offered: grantmaking and social investment, employee engagement and complementing
CSR activities. A common challenge for the latter, is
that CSR departments and corporate foundations not
always work well together.
Even though both are striving to do good, CSR is
more closely integrated with business activities.
CSR is meant to ensure that business is done in an
ethical, sustainable way and workers are well-treated.
Foundations are more about spending and devising
their own operational programmes. Sometimes CSR
and foundation programmes are synergistic and can
dovetail but they can also be in competition.
If too closely aligned in practice, the distinction becomes blurred and any wrongdoing by the corporation
immediately has negative results for the foundation. In practice, you can find corporate volunteer
programmes organized by a CSR department or the
foundation. In both cases, participants seemed to
agree that the best way to engage company employees
is to utilize their expertise.
Good corporate volunteer programmes identify the
corporation’s key skills and use them for the aims of
the foundation. One example offered was of pro bona
center for phil anthropy studies at the universit y of ba sel
The overarching theme for all is their relation with
the funding company. Corporate foundations will
always have to deal with this. The relationship is dynamic and full of risks but also full of opportunities.
Second it became apparent how much foundations
can learn from each other. The conference delivered
what its title promised. The organizers found numerous ways to engage the participants and foster the
exchange of knowledge among them.
1. The tool can
be downloaded
from the website
of the Center for
Philanthropy
Studies.
Everybody had a better sense of what is going on in the
European foundation world. Even though participants
came from more than seven countries, they all spoke
the same language. A mutual understanding could be
felt. It was not one of those conferences where you are
lectured to and sit through one panel after another.
It was a true exchange. This sort of event will move the
field forward. Not just for corporate foundations but
for the whole philanthropic sector.
For more information
For more reports from the corporate foundations knowledge
exchange, see Steffen and Theresa’s blog posts.
See here for more on the future of corporate foundations.