Corporate foundations and broader corporate giving

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

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

“Revealing the Foundations”

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

Rationale for research

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

The aim of the research was find out more about corporate foundations in England & Wales:

Aims and objectives

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

A corporate foundation is a registered charity whose primary income is derived in some way from a

corporate source

Defining a corporate foundation

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

Funding sources

Main findings

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

913

28

52

24

0

10

20

30

40

50

60

Number of foundations

1960s 1970s 1980s 1990s 2000s

Decade of foundation set up

Prevalence

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

Reason for set up

Total income for corporate foundations 2004-5 amounts to approximately £208 million

1715

37

13

28

36 7

0

5

10

15

20

25

30

35

40

Number of foundations

up to£50k

£50k -£100k

£100k -£500k

£500k -£1m

£1m -£5m

£5m -£10m

Over£10m

Noaccounts

Income bracket

Levels of support

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

9

15

42

11

23

2 3

21

05

101520

2530354045

Number of foundations

up to£50k

£50k -£100k

£100k -£500k

£500k -£1m

£1m -£5m

£5m -£10m

Over£10m

Noaccounts

Spend bracket

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

Nature of support

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

Unknown, 12

No link with business focus, 78

Links with business focus, 36

Focus of support

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

No regional focus, 84

Regional focus, 29Unknown, 13

Focus of support

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

The issue of risk

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

No employee involvement, 79

Supports employee

involvement, 29

Unknown, 18

Employee involvement

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.”

Identifying partners

CCI – growing focus on evaluation:

Evaluation

Inputs: Resources contributed Outputs: Quantifiable units that are direct products of

activity Outcomes: Benefits or changes for intended

beneficiaries, usually linked to objectivesImpacts: 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

What next?

1) Maintaining a database of corporate foundations

2) Exploring corporate foundations from other perspectives

3) Exploring issues in more depth

4) How are corporate foundations different

The SMART Company

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