margaret coady - committee encouraging corporate philanthropy
DESCRIPTION
The executive director of the New York-based Committee Encouraging Corporate Philanthropy discusses the CECP's research into global giving trends and how it encourages commitment by CEOs to social investment.TRANSCRIPT
Leadership and Trends in Global Corporate Giving
Margaret Coady Executive Director, CECP
@MargaretCoady @CECPTweets
THE CEO FORCE FOR GOOD
4 4
A lot has changed in 15 years….
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A lot has changed in 10 years….
6 6
7 7
Leadership and Trends in Corporate Giving
in Strategy
in the Data
in Conversation
1.
2.
3.
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An Unscientific History of Corporate Giving
Local, reactive, heartstrings-driven Give if asked; “good neighbor” giving
Give to causes important to senior leaders
Intentionally NOT strategic or connected to the
business for fear of a backlash
Visible, proactive See other companies begin to get credit
Grants are proactive and “make sense”
Better measurement of inputs
Strategic, aligned, beyond cash Accept very few unsolicited grantee proposals
Giving as a “portfolio” of expectations to manage
Co-design initiatives with nonprofit partners
Greater attention to employee engagement
The Great Rebalancing
▪ Emerging markets gaining larger share of global GDP
▪ Growth of a multi-polar global economy
The Productivity Imperative
▪ Economic growth in developed economies increasingly dependent on productivity gains
▪ Insufficient supply of highly trained talent for rising global demand
The Global Grid
Pricing the Planet
▪ Significant increase in resource demand as emerging markets surge
▪ Growing environmental pressures on business and society
The Market State
▪ Growing need of states to compete for economic growth and innovation
▪ Competition to attract business activity
▪ Increasing interconnection of markets, trade, and technology
SOURCE: Based on research by McKinsey & Company
Context for Big Business Intensifying
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Motivations Point in the Same Direction
• Search for growth
• Access new markets
• Pursue innovation
• Demand for transparency
• Scarcity of raw materials
• Societal concerns
Push
Pull
Blending
Profits and Purpose
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“Changes in the external environment and a generational shift are creating a greater awareness
amongst businesses and a greater need to act to address societal problems.”
Joe Jimenez
CEO, Novartis AG
CEO Perspective
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Leadership and Trends in Corporate Giving
in Strategy
in the Data
in Conversation
1.
2.
3.
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• 240 Companies across all industries • Revenue = $15.7 billion USD
• Pre-Tax Profit = $ 1.7 billion USD
• Employees = 32,000 USD
• Contributions • Total Annual Giving = $19.9 million USD
• Corporate Cash 47%
• Corporate Foundation Cash 35%
• Non-Cash 18%
• Structure • Have a Foundation = 81%
• Give Internationally = 71%
Annual Survey of Corporate Engagement
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Annual Insights Reports: Giving in Numbers
Trends in the Data
1. Giving rebounded faster than
revenues… but not for all companies.
2. Non-cash (mostly product giving) is
growing, and dominates in aggregate.
3. Fewer, larger grants given to fewer
cause areas.
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Business performance rebounded somewhat from 2009 to 2010, but
in 2012 companies still did not earn as much as they did in 2007.
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Business Has Been Slow To Recover
Median Revenues
Note: Inflation-Adjusted, 6-Year Matched-Set Data, N=93
Median Pre-Tax Profits
$ B
illio
ns
Note: Inflation-Adjusted, 6-Year Matched-Set Data, N=96
$30.56
$26.95 $26.41
$28.31
$29.45 $29.90
2007 2008 2009 2010 2011 2012
$3.76
$1.94 $2.14
$3.03
$3.63
$2.84
2007 2008 2009 2010 2011 2012$ B
illio
ns
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Companies Are Giving More
Than Before The Global Recession
Distribution of Companies by Changes in Total Giving Between 2007 and 2012
Note: Inflation-Adjusted, 6-Year Matched-Set Data, N=96
Perc
enta
ge o
f C
om
panie
s
24%
11%
3% 3%
7%
14%
38%
Decreasedby morethan 25%
Decreasedbetween10% and
25%
Decreasedbetween 2%
and 10%
Flat Increasedbetween 2%
and 10%
Increasedbetween10% and
25%
Increasedby morethan 25%
59% increased
giving
38% decreased
giving
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Non-Cash Giving Growth Drove Overall Giving
Increase from 2007 to 2012
Note: All Figures in Billions, 6-Year Matched-Set Data, N=96
Non-cash giving as a percentage of total giving grew from 57% in
2007 to 69% in 2012.
$6.16 $6.05 $6.98
$8.55 $9.43
$10.46
$4.63 $4.53 $4.29
$4.80
$4.93
$4.81
2007 2008 2009 2010 2011 2012
Non-Cash Cash
$11.27
$13.35
$14.36
$15.27
$10.58 $10.79
57%
69%
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Reasons for Giving Increases
1. Increased Non-Cash Contributions
2. Improved Business Performance
3. Increased Commitment to Education
Initiatives
4. Mergers and Acquisitions
5. Better Tracking of Contributions
Reasons for Giving Decreases
1. Company-Wide Cost Reductions
2. Reduced Disaster Spending
3. Refreshing Focus Areas
Reasons For Giving Increases and Decreases
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Companies today are more likely to invest the majority of their
philanthropy programs in individual program areas compared to
before the global recession.
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Companies Are Focusing Philanthropy Programs To
Achieve Deep Societal Impact
$10.79 $10.58 $11.27
$13.35 $14.36
$15.27
0%
10%
20%
30%
40%
$-
$4.00
$8.00
$12.00
$16.00
$20.00
2007 2008 2009 2010 2011 2012
Total Giving (N=96) % of Companies Giving 50% or More to One Program Type (N=51)
$ B
illio
ns
20 Note: Medians, Inflation-Adjusted, N=38.
$31 792 $31 459
$34 606
$45 604 63
51
63
50
30
40
50
60
70
80
$17 000
$27 000
$37 000
$47 000
$57 000
2010 2011 2012 2013
Grant Size Recipient Organizations Per Grantmaker FTE
Bigger Grants to Fewer Organizations
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Leadership and Trends in Corporate Giving
in Strategy
in the Data
in Conversation
1.
2.
3.
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1. Broadened Leadership for CEOs
2. Sustainability vs. Philanthropy vs.
Shared Value
3. Telling the Story: Measuring Impact
Conversations with CEOs and Practitioners
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Who will lead progress toward long-term societal
improvement?
Broadened CEO Leadership: Polling Result
3% 8% 8%
26%
55%
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“The CEO has to lead by being the Chief Engagement Officer, to build trust and reputation by behaving with genuine humility, moral authority, speed of action, and decisiveness.”
Richard Edelman
President and CEO, Edelman
Broadened Leadership: CEO Perspective
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Broadened CEO Leadership: 4 Tensions
Inspire
Employees
Guide
Consumers
Educate
Investors
Engage
Partners
Engaged employees feel you are not doing enough
vs.
Skeptical employees question your involvement
Sometimes prefer detrimental to sustainable options
vs.
Want to know about corporate actions and impact
Pressure to see quarterly returns and high ROI projects
vs.
Long time horizon for shareholder returns with “purpose”
Collaborate while maintaining competitive advantage
vs.
Easier alone, but hard to address societal problems alone
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As CEO, what is the most effective step I can take to
help restore public trust in business?
3%
10%
10%
14%
28%
34%
Include community and sustainability issues in the …
Commit to public reporting of my company’s goals and progress …
Rally fellow CEOs to engage moredeeply in community issues
Work with my company’s critics on practical changes to our …
Further integrate my company’s values into our incentives and …
Speak publicly, in my own voice, onwhat my company is doing and why
Broadened CEO Leadership: Polling Result
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Sustainability vs. Philanthropy vs. Shared Value
Philanthropy is
dead!
Giving back
implies we
took
something!
Not every societal
problem has a
commercial solution!
The biggest polluters
are the biggest givers!
Our products change the world and we
pay taxes - and that’s enough!
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Sustainability vs. Philanthropy vs. Shared Value
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Indra Nooyi
Chairman and CEO
PepsiCo
Sustainability vs. Philanthropy vs. Shared Value
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Inputs ‒ Money or staff time invested into societal initiatives.
Activities ‒ Engaging with community programs through program
management, volunteering, and other activities.
Outputs ‒ Measures of what gets produced from activities
‒ (e.g. # of students trained).
Outcomes ‒ Immediate changes realized as a direct result of a
program’s activities
‒ (e.g. % of students improving reading level).
Telling the Story: Measuring Impact
Impact ‒ Long-term results and ultimate social value
‒ (e.g. % of students going to college and getting jobs).
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A Majority of Companies are Measuring the Societal Value of their
Contributions
18%
35%
47%
VeryExperienced(5 Years or
More)
ModeratelyExperienced(3-4 Years)
SlightlyExperienced(2 Years or
Less)
76% Measure
Outcomes
and/or
Impacts
N=160. N=119.
24% Do Not
Measure
Outcomes
and/or
Impacts
Telling the Story: Measuring Impact
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Total
Value
Business
Value
Societal
Value
Managing
Risk
Building
Intangibles
Reduced
Costs
Increased
Revenues
• Higher level of skills and
education
• Increased availability of
employment
• Improved health
• Greater economic resilience
• Enhanced environmental
quality
• ….
• New customers
• New Products
• Extended uses for existing
products
• Market penetration
• Differentiation / price premium
• Innovation
• Increased manufacturing
capacity
• Input optimization
• Lower raw materials costs
• Improved
perception by
existing and
future
customers
• Enhanced
brand value
• Employee
satisfaction
• Enhanced
supplier
relationships
• Raw material
availability
• Security of
physical
assets
• Regulatory
uncertainty
• Reduced risk
to the
community
• Logistics
network
capacity
Telling the Story: Measuring Impact
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1. Have a specific purpose for collecting data (or
asking your grantees to collect it).
2. Measurement is most powerful when used for
learning. Be ready to make program changes.
3. Don’t “round up” or overstate your impact.
4. Understand how your actions fit into the arc of a
broader theory of change, and focus on the
effect of your actions as a piece of that story.
5. Measurement costs money. Selectively
measure and budget for it from the beginning.
Telling the Story: Measuring Impact
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Key Takeaways
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1. Much has changed in 15 years
• A convergence of expectations, issues,
and strategy.
2. The data show a drive toward focus
• Giving levels are up—focused on fewer
issues and grantees.
• Companies are leveraging the assets
that make them unique.
3. A new role for companies and CEOs
• Leading beyond the walls of your
business.
• Understanding the impact a company
can have, with humility.
Blending
Profits and Purpose
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Next Steps
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If you like data...
• Download “Giving in Numbers” and the CSI Handbook
• Check out CECP’s latest infographics
If you like the CEO perspective...
• Follow CECP’s YouTube Channel
• Download our event Executive Summaries
If you like Impact Measurement...
• Download “Measuring the Value of Corporate Philanthropy”
If you like Social Media...
• Share with us on Twitter: @CECPTweets, @MargaretCoady
THANK YOU
Margaret Coady Executive Director, CECP
@MargaretCoady @CECPTweets