Tag Archives: philanthropy

Discovering new-found respect for philanthropy

I’ve always had a bit of a downer on corporate philanthropy, having tended to equate it with first generation sustainability strategy and practice – a model based on ‘giving something back’ that often pays little or no heed to what the corporation takes in the first place. In so doing, I’ve always felt, it tends to perpetuate the framing of sustainability as a discrete agenda, separate from core business.

Reflecting further on the latest Acumen Debate hosted by EY earlier this month, however, I’m thinking it’s maybe time to revise that view.

The spur for this reflection is a thought-provoking comment made by Sam Parker, director of the Shell Foundation, in speaking against the motion that, “This house believes that impact investors don’t need to compromise between financial and social returns.”

He was following on from – and directly responding to – the argument made in favour of the motion by Diana Noble of CDC, the British government’s development finance institution. Her experience, she said, proved there was no compromise. CDC has achieved an average 6% return on investments in its portfolio of ‘base of the pyramid’ (BoP) enterprises over the last 20 years; and on her regular visits to Africa and South East Asia, she could not go anywhere without seeing the benefit of businesses, “that simply wouldn’t exist without CDC.”

The essential thrust of Parker’s retort was that’s grand, but how did those businesses get to a place where they became an investible proposition for the likes of CDC? “Somebody somewhere had to do the heavy lifting,” he said. “Somebody somewhere paid for that.”

And you know what? I think he’s right.

If you think about it in terms of something like Ichak Adizes’ famous corporate life-cycle model, impact investors like CDC might only really enter the fray once an enterprise has reached ‘adolescence’ and the risk of ‘infant mortality’ has passed.

Work backwards through the ‘go-go’, ‘infancy’ and ‘courtship’ stages – where ultimately the business idea is but the proverbial twinkle in the parent’s eye – and, chances are, you’re going to be looking at investors with a very different profile.

Go back one step, and you might be looking at investors prepared to work at breakeven; go back two and they’re maybe willing to put up with a 50% loss; go right back to the outset, and you’re probably looking at pure philanthropy – the, “early-stage patient grant,” as Parker put it, without which, “there would be nothing to invest in.”

For me, that logic felt hard to refute and, whereas the show of hands at the end of the event appeared to show several of the audience metaphorically crossing the floor from the ‘opposed’ to ‘in favour’ camps, much to my surprise, I found myself moving in the opposite direction.

The importance of seeing the bigger picture

Kevin Keohane – my fellow IABC member and erstwhile boss at SAS – has written some brilliant and thought-provoking posts recently on the need for business communicators to broaden their perspectives and adopt a more “systemic” view.

Like him, I’m convinced that seeing the bigger picture and how everything fits together – rather than technical specialism – is the key to unlocking the full value of business communications and moving the profession upstream.

It’s a point I was particularly keen to make last week in an email exchange regarding a call for papers for a future IABC event on corporate responsibility…

My take? It’s the big picture stuff that’s actually the really fascinating, exciting and challenging bit when it comes to CR strategy and communications – especially for an audience of predominantly internal communicators.

My reasoning? The really critical development is the shift away from CR as self-contained box for all the “good stuff” towards CR as “core strategy” and an integral part of the fabric of the organisation. This represents a fundamental shift in the balance of power between marketing/PR and HR/internal comms.

My request? In inviting people to present case studies as to how companies have communicated their various CR activities and investments, let’s also ensure that:

  1. We preface these with the big picture, contextual stuff that illustrates where CR is heading and what that means for building trust, loyalty and competitive advantage, and
  2. We encourage the shift in mind-set away from “CR as PR” by selecting case studies that are absolutely, undeniably, 100% material to the business’ operations, not just old-fashioned corporate philanthropy

Perhaps unwisely, I chose to illustrate the latter point by questioning an example proposed by one of my colleagues – an international bank’s programme to promote clean water and sustainable water use.

My observations? A worthy initiative, I’m sure, but does it really have that much to do with responsible banking? Particularly given the current economic climate, couldn’t we agree that other issues are rather higher up in the “materiality” pecking order – responsible lending and how the bank’s policies support and promote sustainable business, for example? (See my previous post.)

For a short while, I thought I’d put the guy’s nose seriously out of joint but, to his credit, he appreciated the point I was trying to make.

A fair point, then, but less than subtly made! I really must work on that…