Corporate foundations and broader corporate giving

2. Corporate foundations and broader corporate giving

3. Corporate giving is not a new phenomenon • However, growth in corporate responsibility agenda has meant: • Emphasis on business practices • Less inclination for corporate philanthropy • Align charitable / community activities with core business focus

4. That said… • Corporate giving still considered to be important (Percent Club) • GlaxoSmithKline = £328 million in 2005 (cash, time and gifts) • Corporate donors contribute just under 3% of the UK charity income • 52 new corporate foundations were set up in 1990’s • 24 so far since 2000

5. “Revealing the Foundations”

6. Rationale for research • Knowledge and understanding of corporate foundations is limited • Little previous research conducted • Views on even the basic information vary widely • Interest in knowing more and need for practical guidance

7. Aims and objectives The aim of the research was find out more about corporate foundations in England & Wales: • how many are there? • how much income do they receive and what do they invest it in? • what activities do they support? • how integrated are they with their founder companies? Our objectives were to use the findings to: • inform interested parties about corporate foundations • provide some practical - setting up / reviewing • open up a debate about the role of foundations in corporate giving

8. Methodology • Gathered lists of foundations from relevant organisations and directories including CAF and ACF • Cross-checked data with FTSE 100 and BITC list • Confirmed details using Charity Commission Register of Charities • Conducted 34 telephone interviews • Identified nine corporate foundations for detailed case studies

9. Defining a corporate foundation A corporate foundation is a registered charity whose primary income is derived in some way from a corporate source

10. Funding sources • Investment income on assets originally given by a company • Regular donations from a company • An endowment linked to a company’s profits • Money raised by a company’s or employees’ fundraising efforts • Gift and support in kind

11. Main findings

12. Prevalence Based on our definition, there are 126 corporate foundations currently active in England and Wales

13. Reason for set up Most foundations are set up to provide a transparent, formalised structure to corporate giving. • Other reasons include: • marking an anniversary or special event • individual philanthropy of senior person in the company • structural change, eg mergers, demutualisation

14. Levels of support Total income for corporate foundations 2004-5 amounts to approximately £208 million

15. Total expenditure for corporate foundations 2004-5 amounts to approximately £167 million, with approximately £148 million going on direct charitable donations, mostly in grant form

16. Nature of support • Majority fund through grants • Minority fund research, scholarships, secondments etc • Generally support a broad range of charitable activity • More likely to have broad funding areas than narrowly focused ones

17. Focus of support Most foundations are not focusing their work on areas that link closely with the activities or focus of their founder company

18. Focus of support Small number have specific regional focus, usually linked to traditional location and focus of founder company

19. The issue of risk • Ability to fund more controversial areas felt to be benefit of having a foundation • Company can remain at arms length, whilst gaining reputational benefits • Foundation = legitimacy and authority • Can lead to conflict with the business Northern Rock – exclusion and disadvantage, domestic abuse and reoffending Nationwide – “Supporting Families” prisoners families, domestic violence, young offenders Zurich Community Trust – “Disadvantage” drug abuse, older people, India

20. Employee involvement Some foundations support the involvement of employees in charitable activities: match giving; organising volunteering events / programmes; payroll giving

21. Identifying partners • Most giving is reactive, although some do approach specific organisations • Some feel overwhelmed with requests – don’t need to look for more causes to support “We do not proactively seek out causes, or heavily market our foundation as it is a small foundation and we would be inundated” “If we advertised in any way other than the website, there would be too many applications to process. The trust receives around 10,000 applications per year” “There are many applications to the foundation each month. The trustees do examine new areas that they may be able to support, but they do not particularly seek them out.”

22. Evaluation • CCI – growing focus on evaluation: Inputs: Resources contributed Outputs: Quantifiable units that are direct products of activity Outcomes: Benefits or changes for intended beneficiaries, usually linked to objectives Impacts: All changes arising from the programme’s activities • Almost all monitor inputs, outputs and outcomes • Evaluation varies - six monthly / annual report, withholding of funding • Some starting to measure impacts • Recognition of evaluation burden but also value

23. What next?

24. Maintaining a database of corporate foundations • Exploring corporate foundations from other perspectives • Exploring issues in more depth • How are corporate foundations different

25. The SMART Company 78 Cowcross Street London EC1M 6HE t: 020 7864 4141 e: enquiry@thesmartcompany.net www.thesmartcompany.net