Archive for the ‘corporate philanthropy’ Category

What’s Next for Me is What’s Next for Philanthropy

January 2, 2012

I’ve been advising people about their philanthropy for over a decade. In person and through this blog I’ve always encouraged them to go beyond giving money to charity and think about all the assets they can bring to the table, and how they can especially use their power as investors and consumers to bring about the changes they want to see in the world.

Philanthropy as we have known it for the past few decades has been about giving money. But as we progress in the 21st century, I believe it will be about spending money: people are becoming more aware every day that we are shaping ourselves and the world around us by voting with our pocketbooks everyday.

The evidence is everywhere:

  • The exploding local food and “slow food” movements, rejecting the agro-industrial complex in favor of healing the economic, environmental and social health of our communities;
  • The growing fair trade movement, which provides fair wages and working conditions for workers and prevents the exploitation that often accompanies the production of cheap goods for consumption in the US;
  • The call echoing out from Occupy Wall Street for conscientious citizens to move their money from big commercial banks to local community banks, personified in the Move Your Money campaign;
  • The surveys that show that consumers want to purchase from socially responsible companies;
  • The growing voices of Millennials looking to work for socially responsible companies, or better yet, that want to start their own;
  • The expanding corps of investment advisers who specialize in “socially responsible investing” or “impact investing” a market estimated to grow to over $500 Billion in invested assets in the next 5 to 10 years;
  • The rise of services like Moxy Vote, which help you vote your values on any shareholder resolutions that come before companies whose stocks are in your investment portfolio

In addition to these trends, maybe you have heard the term “collaborative consumption,” which is being used to describe an emerging approach to people and their stuff–an approach based on borrowing, renting, sharing and accessing rather than owning outright. Early examples include Netflix for DVDs, car sharing services such as ZipCar or iGo, and more recently the peer to peer travel booking site Airbnb, and for designer gowns, Rent the Runway.

I’m so drawn to the concept of collaborative consumption, I am excited to tell you that I have launched my own social enterprise, one that applies the concept of collaborative consumption to an industry out of control: parenting.

Good Karma Clothing for Kids is a subscription baby clothing service that provides busy, socially conscious parents with like-new baby clothes in sizes newborn through 24 months so they don’t have to spend a fortune keeping up with fast growing little bodies.

We send a bundle in the size the baby is now, they wear, wash, enjoy, then send them back in the prepaid, reusable shipping bag when they need to exchange them for the next size up. We only use environmentally- and baby-friendly Selestial Soap to further reduce the environmental impact of the clothing, and we turn stained, ripped or worn out clothes into “upcycled” hand-made bibs, baby quilts or stuffed animals.

Our web site is live and we are now in our public beta. Check it out at www.goodkarma.co

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Why I’m Worried About the Gates/Buffett Billionaire’s Pledge

June 25, 2010

I have great admiration for Bill and Melinda Gates and Warren Buffett and their recently announced effort to convince/cajole their fellow billionaires to follow their lead and pledge to give at least 50% of their wealth to charity. I was especially moved by Mr. Buffett’s letter explaining his reasoning. It speaks very directly to many of my own motivations and thinking around philanthropy.

And yet….and yet….

Imagine if Bill Gates used the power of Microsoft to push for an end to conflict minerals (which, like conflict diamonds, are often mined using slave labor and used to funnel “legitimate” dollars to armed  militias terrorizing local people in Eastern Congo), insisting that only “conflict-free” minerals be used in computers and other electronics featuring Microsoft Office.

Imagine if Warren Buffet insisted that every company in which he is a shareholder provided a decent paid family leave and established benchmarks for increased diversity among upper management.

Imagine if Oprah Winfrey decided that only companies who certified their supply chains as free of child labor would appear on her television show or the new OWN Network.

Imagine if…the world’s billionaires became active philanthropists. Not the kind who give money away–for me that earns you the title of “donor” but not necessarily “philanthropist.” Rather, the kind who use all of their assets–their power as consumers, investors, public figures and role models–to really bring about social change on a mass scale. The combined impact of increased social responsibility from the companies they could influence would dwarf the power of their charitable dollars funneled through nonprofits.

…Manufacturing companies seeking computer parts would be motivated to find other sources of minerals and effectively close off a critical funding stream and thereby cripple the armed militias of the Congo.

…Tens of thousands of women struggling to balance work and family would enjoy improved health for themselves and their babies, and their companies would save the time and expense of replacing them.

…Companies with fair supply chains would be the ones to receive the benefits of “The Oprah Effect” and others would be incentivized to clean up their labor practices if they wanted to join in. Millions of children around the world could be affected, reducing child trafficking and forced labor as these practices become increasingly unacceptable to American consumers, led by the millions who are loyal fans of Ms. Winfrey.

Don’t get me wrong, we need the nonprofit sector and the many important charities doing great work all over the world. I’m not suggesting people shouldn’t give money to charity. But for the world’s billionaires, believe it or not, money is not their greatest asset. It’s influence. That influence in part comes from their billions, and so giving away their money should not be a substitute for using their influence to bring about positive social change. (And as Phil Cubeta points out, “good” people giving away their billions leaves the “selfish, controlling, manipulative SOBs” to built dynasties and eventually rule the world.)

So let’s applaud the Gates’s, Mr. Buffett and the others who have already pledged their wealth to charitable causes. But let’s also applaud the growing class of social entrepreneurs who start or work for businesses that don’t make them billionaires but do provide sustainable livelihoods, environmentally friendly products and social justice along with financial returns.

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Chicago Marathon “Footprints for Charity”

September 10, 2009

Here’s an interesting take on the growing trend of letting consumers choose where corporate donations are directed. From an article on examiner.com:

The Bank of America Chicago Marathon launched its first-ever digital fundraising program called Footprints for Charity. You can customize a digital running shoe tread with a personal image and tailored message at www.chicagomarathon.com/footprint. For each submission, Bank of America will donate $1 to your choice of one of 22 charities, up to a maximum total contribution of $50,000. Then, on October 11 (race day), the final results of the fundraising effort will be announced and an additional $10,000 will be awarded to the charity that received the most submissions on its behalf.

You can register and create a footprint here.

Here’s my take on these kinds of “fundraising contests”: it’s not fundraising. Bank of America has presumably committed the funds. Rather, it’s a marketing effort by Bank of America to get people to see and acknowledge its charitable donations by giving them the sense that they’re earning it.

“Design your digital footprint and help make a difference!”

This line plays to the worst kind of slacktivism, where people click a few times on their computer and get a gold star for being philanthropic. Actually donating or raising money for these causes through the Chicago Marathon would be philanthropic. Creating a digital shoe print is not.

I don’t know why this aggravates me. Maybe because these efforts come across as so transparently marketing-driven instead of genuinely altruistic. Maybe I should just be glad they’re giving money to charity and leave them alone. But what I always fear is that members of the charitably-minded public, facing a dearth of good information about corporate social responsibility, will erect a shiny halo around these companies based on highly-publicized if proportionately minuscule contributions to charity.

I’m not suggesting Bank of America is not a fantastic corporate social citizen. Maybe they are, I have no idea. But that’s my point. Savvy consumers need to look at these efforts as an advanced marketing tactic that’s designed to get past our normal critical defenses by pushing the “charity” button in our brain.

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Best Practices for Embedded Philanthropy

May 26, 2009

“Embedded philanthropy is transforming everyday commercial transactions for the public good.”

Catch me on the right day, and I agree wholeheartedly with this statement. Other days, it seems like we’ve got a tiger by the tail.

What is “Embedded Philanthropy”?

Lucy Bernholz of Philanthropy 2173 coined the term “embedded philanthropy” to describe the trend of integrating a charitable donation as “part of any other financial transaction, such as checking out of the grocery store and making a donation to diabetes care.”

You’ve probably participated in embedded philanthropy. A few examples of embedded philanthropy from elsewhere in this blog: A mutual fund that donates a portion of their proceeds to charity; TOMs shoes that give a pair to a child for every pair you buy; and of course the grandaddy of them all, Product (RED).

Sounds Harmless. So Why the Debate?

Here’s what’s potentially good about embedded philanthropy: it brings charity into our everyday lives and makes it easy.  It allows us to express our identity and our values and align our consumer behavior with the causes we care about. I think we have to start using our purchasing power in this way to motivate corporate actors to behave in more socially responsible ways because corporations are some of the most important actors in this chess game of social change.

Here’s what’s potentially bad about embedded philanthropy: it could make us thoughtless about philanthropy and it could end up being a “corporate whitewashing” tactic where companies pay a relatively small percentage of profits to convey an image of corporate social responsibility that may not be backed up by the rest of their labor, environmental and social practices. When corporations cap their donations regardless of the number of units sold, it’s unclear that individual purchases actually increase the amount of money going to charity or if they just burnish the corporate reputation of the advertiser.  I think this is a real danger and wrote about it here.

So, like most things–marketing, elected office…butter–embedded philanthropy is a neutral tool that can be used for good or evil. We have to figure out how to use it responsibly so that, as people who are invested in positive social change and real corporate citizenship, we don’t just wait and hope for the best.

Charities are Not Victims, They are Co-Conspirators

Charities themselves are on the front lines of this effort. They are the ones who allow their names and images to be used by the drug stores and clothing retailers and the credit card companies. And to be practical, the promise of a steady stream of corporate dollars and the backing of a corporate marketing budget is incredibly enticing.

But charities need to make sure that the corporations who approach them for an embedded philanthropy opportunities act in a way that is consistent with the nonprofit’s values.  Not just talk in that way in a couple of feel-good meetings, but act in that way. Charities should ask for a report from KDL research or another source that can provide a snapshot of the larger picture of corporate responsibility. Charities are responsible to make sure their own good name is not used as part of a whitewashing effort.

I suspect that a few charities will be embarrassed by their association with a corporation that turns out to be semi-evil before charities start taking this responsibility seriously.  But don’t let it be your organization that gets dinged: if the corporate report card is a “C” overall, take the principled stand and turn down the deal. It will do more to further your mission in the long run than a few extra dollars.

Another way to approach this is almost like shareholder activism, establishing partnerships and mutually beneficial relationships and then using the insider status to change the status quo. Can you imagine if Susan G. Komen for the Cure pressured every one of its 60 corporate partners to offer decent health insurance with preventive care to its employees? I bet they’d have a lot of leverage.

If Corporations are by Definition Sociopaths, How can they be Socially Responsible?

For the companies who wish to get some attention for their corporate citizenship through the use of embedded philanthropy, here are a few best practices:

  1. If your corporate social responsibility office falls anywhere under your sales or marketing function, you’ve got the wrong idea.  It should be a cabinet-level position reporting to the president or CEO.
  2. You should get to know the charity before hitching your wagon to their star, and the best way to do that is to get involved. Start your relationship with something other than cash contributions. Maybe by donating professional skills of your workers, like expertise in logistics to help an international aid agency that needs to deliver supplies to remote areas. Your employees will be a fantastic source for due diligence.
  3. Don’t cap your maximum donation. Respond to the will of the people. This is one reason why embedded philanthropy, where the amount of the donation is explicitly added on to the purchase price, is a better model than cause marketing, where a percentage of the sale price is diverted to charity.
  4. Disclose the details of your arrangement with the charity on your web site, and if possible on the packaging or marketing materials. For example, don’t just say “a percentage of profits,” but say the exact percentage. And don’t use the word “proceeds” because consumers don’t know if that means gross sales, net profit or what. If you’re too embarrassed to list the exact amount then take the hint and up your contribution. When you consider what you’re getting out of the arrangement, make the the charity is getting a commensurate benefit.
  5. Align your business practices with your particular cause, so that you’re demonstrating more than a token commitment. For example, if you’re supporting a health-related cause, re-examine your health insurance or long-term disability policy. These things are financial commitments as well, and though not as flashy they are in many ways more important.

If you incorporate these best practices into your embedded philanthropy program, you would welcome and promote transparency. If you use corporate philanthropy as window-dressing, beware. The consumer public is going to figure it out and you’ll end up looking like a phony–a death sentence in today’s authenticity-adoring society.

This blog post is part of the Embedded Philanthropy Blog Series, sponsored by Telecom for Charity. The blog series was launched in May 2009 to highlight expert thinking and encourage discussions on the state of embedded philanthropy in today’s economy.

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Google.org Shakeup: What Does it Mean?

February 24, 2009

The online community is aflutter with news of the change in leadership at Google.org, the philanthropic arm of Internet giant Google.  Dr. Larry Brilliant, the first Executive Director, is moving away from a day to day oversight role to become ”Chief Philanthropy Evangelist,” in charge of developing big ideas and identifying partners in the philanthropy work.  In his place, Google’s Vice President of New Business Development, Megan Smith, is taking over.  

What is Google.org?

Despite the “.org” right there in the name, Google.org is not a foundation or a nonprofit organization.  It’s more like an umbrella organization.  Google.org is a pool of resources: financial, human and intellectual capital.  I frequently cite Google.org in speeches as an example where all the tools of the new approach to philanthropy are in play: grants, investments, advocacy efforts, human skills, corporate reputation and significant business networks, just to name a few.  Google.org tries to bring the right resources to the problem at hand.

Why the Shake-up?

According to Dr. Brilliant, Google.org reviewed its progress after three years: “During our review it became clear that while we have been able to support some remarkable non-profit organizations over the past three years, our greatest impact has come when we’ve attacked problems in ways that make the most of Google’s strengths in technology and information.”  

So take for example the FluTrends Project.  According to the site, “We’ve found that certain search terms are good indicators of flu activity. Google Flu Trends uses aggregated Google search data to estimate flu activity in your state up to two weeks faster than traditional systems.”  Could  anyone but Google have found such a brilliant early warning system for public health officials?  It’s doubtful.

In essence, Dr. Brilliant is saying that Google.org is going to focus on projects where it’s unique strengths put Google.org in a position to bring value and add insight to solving social problems.  And if you think about it, the lesson there is both obvious and yet profound.  

Lots of philanthropists have money to spend on solving social problems–that certainly isn’t a unique strength.  And lots of philanthropists big, tiny and everywhere in between have spent that money, many of them always feeling like they weren’t being as effective as they would like to be, but unsure of what to do differently.  Google.org has come up with an answer: it’s not our money that makes us effective, it’s our know-how.  They plan to focus on problems where information aggregation and innovative technology can bring key insights and move us toward new solutions.

And for those of us without a billion dollars to spend on our philanthropy, the same lesson holds true: It’s not the amount of our money that makes us effective philanthropists, it’s the strength of our other resources that help us decide where to donate that money.

Have you thought about what your expertise is and how you can bring it to bear on your philanthropic donations?  If, as some pundits predict, the current recession is going to result in over 500,000 nonprofits going out of business, don’t you want to make sure the most effective ones stay in business?  If so, then you need to direct your charitable giving to organizations that you are able to evaluate based on the skills and community knowledge that you already have.  

If you’re an educator who works with small children, you may always wonder if you’re doing the right thing by donating to a national emergency relief organization after a natural disaster: Would a local church be more effective at finding and helping people in need?  How do you know if you don’t understand the logistics and complications of emergency relief programs? But if you look at two education organizations working with kids in trouble, you’re probably going to feel more confident in the work of one or the other, based on your own experience and knowledge of the people, the approach and the leadership of the organization.  

One last note: 

Some will argue that the focus on technology solutions is self-serving and takes Google’s philanthropy more in line with traditional corporate philanthropy–usually perceived as self-serving, thinly disguised marketing programs that serve the corporate interests more than society’s interests.  It’s something for us all to keep an eye on, but this is where we can hope that the old mantra of “Don’t Be Evil” will play out for all of our benefit.

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Membership Has Its Rewards: $1.5 Million Bucks!

August 25, 2008

“As many as 1/3 of the world’s estimated 300,000 child soldiers aged 4 to 17 serve involuntarily in the drug cartel and government armies of Southeast Asia. The lack of alternatives caused by the cycles of illiteracy, poverty and dependence upon growing drug crops perpetuates the exploitation of children as soldiers. Demobilizing these children is critical, but when the target region’s literacy rate is 1% and the two major employers are the drug lords and their army, the future is still bleak.”

Think a project to rescue, educate and provide farming skills and land to these kids deserves $1.5 million?

How about an online portal that allows students to indicate their personal characteristics and find scholarships for which they can apply –all at once, using a single, consolidated form? Would that deserve $1.5 million if it eliminated stories like this one?

“I work with a young woman, a gifted artist & excellent student, who was accepted to the college of her choice but was struggling to pay for it…The school failed to mention 3 available scholarships that she was uniquely qualified for & when she did discover them the deadlines had passed, the money was left unclaimed & reapplication was not an option as they were only for incoming freshmen.”

If you are an American Express card holder, you get to help decide where the company will distribute $2.5 million to support projects like these.  Just go to www.membersproject.com and log in using your online account usename and password.  You can browse by topic and choose to “nominate” as many projects as you wish before September 1.

How it works

They say “nominate” a project because it’s not voting, at least not yet.  Members are nominating projects for inclusion in the top 25, which will actually be chosen by an expert panel using ‘input’ from members. 

The expert panel, I will say, is impressive in its representation of well-informed philanthropy: Ed Skloot, formerly of Surdna Foundation and now at the Center for Strategic Philanthropy at Duke University; Vanessa Kirsch, of New Profit, Inc.; Jane Goodall, who needs no introduction; the leaders of Alvin Ailey and Harlem Children’s Zone; and, representing the youth factor, the founder of Free the Children and Oprah-approved role model Craig Kielburger.

The composition of panelists makes me predict that, despite allowing projects in five categories in any part of the world, the winning project will have a social enterprise bent and be focused on Africa.  I think that’s great.

The expert panel will select the top 25 projects, and starting September 9 the members will actually vote to narrow it down to the top 25 and then the top 5.  The top 5 projects receive different levels of funding from AmEx, from $1.5 million to $100,000.

The Catch

Here’s where I see the catch: if you submit a top idea, American Express matches your idea with the organization of its choosing to carry it out.  You can make suggestions for the implementing organization, but AmEx reserves the right to choose whoever they want.  And those people design the implementation plan. 

I certainly don’t mind AmEx exercising oversight, it’s the responsible thing to do.  But taking the project away from the originator and handing it to another organization? Ideas for social change are all about the execution.  As the winning project designer, to be shut out of that process would be enormously frustrating. I’m just saying.

Get Out the Vote!!

Here’s my other prediction for the Members Project: the winning project will be originated or sponsored or otherwise promoted heavily by folks with a strong social media presence.  Although AmEx may have a reputation as the credit card of the wealthy (and presumably Luddish*), I think there are plenty of members who are online.  Online channels like twitter, blogs, Digg, badges, Facebook groups, etc. could be powerful ways to “get out the vote” for your project.  Even non-cardmembers can help rally support through social media.

So find a project you would like to see implemented (and don’t mind not knowing who will implement it or how), and tell your network to spread the word. 

 

*the proper term here might be “Luddite-ish” but I thought “Luddish” more elegant.  Don’t you agree?

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The Girl Effect

August 15, 2008

“When women and girls earn income, they reinvest 90 percent of it into their families, as compared to only 30 to 40 percent for a man.”

-Phil Borges, with foreword by Madeleine Albright, Women Empowered: Inspiring Change in the Emerging World [New York: Rizzoli, 2007], 13.

This reinvestment leads to community-wide benefits known as “The Girl Effect,” which is also the name of a new project aimed at getting a greater slice of the development pie directed to girls.  Investing in girls is, according to experts, a powerful way to leverage greater change for lifting communities out of poverty. 

I stumbled on this project via a YouTube video that explains The Girl Effect. 

According to their web site, “The Girl Effect is rooted in the work of the Nike Foundation, which has been joined by the NoVo Foundation in a shared mission to create opportunities for girls, and for the world.” (The NoVo Foundation is run by Jennifer Buffett, who also Co-Chairs the organization with her husband Peter Buffett, son of Warren.  Jennifer is also on the board of the Nike Foundation and other partners in The Girl Effect.  She’s clearly playing a strong leadership role in this effort. Love it.)

The web site for the Girl Effect is itself effective at building awareness and a feeling of urgency among readers. 

What’s less clear to me is what I can do now.  I can make you aware, and I can send money, but don’t you often feel frustrated of wanting to DO something more? 

In the short term, you can send all the girls you know to check out The Girl Effect and use its logos and graphics and wallpaper. Show them their power to change the world. 

Personally, in the short-term, I’m going to change my IM graphic to the logo below.  When I figure out the long-term, I’ll let you know. (Suggestions Welcome)

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Indulgences Sold Here–Just 1% of Your Profits!

July 11, 2008

There’s a viewpoint expressed in this week’s online version of BusinessWeek saying that, in order to be fairly labeled as a “good corporate citizen” companies need to pledge 1% of their pre-tax earnings to charity.  I could not disagree more. 

The authors acknowledge that:

“measuring overall corporate responsibility requires more than just analyzing a company’s philanthropic donations. Fair treatment of employees, making or selling safe products, paying taxes, and complying with environmental standards are all ingredients that should be in the social responsibility stew. However important these things are, though, they are not more important than a corporate-wide commitment to use an appropriate percentage of a company’s pretax resources to address critical issues that affect employees, communities, the nation, and the planet. ” (emphasis added)

I think this article is wrong-headed because, in reality, nothing is more important than a corporate-wide commitment to treating workers fairly (i.e., a living wage, health insurance, maternity leave, etc.), paying taxes (as opposed to avoiding them? okay, sure), producing products that meet real needs in an environmentally responsible way, and otherwise living up to the spirit of social responsibility.

Some companies are actually earning profits on the backs of the global community: failing to pay a living wage, not providing health or other benefits, polluting the water and air and ground with their manufacturing, charging inflated prices or using marketing tactics to create a demand for products that low-income people don’t really need.  These practices create the conditions that charities seek to remedy. 

Surely it is not acceptable for companies to earn 100% of their profits contributing to these problems and then get a gold star for donating 1% of profits to help address them. 

Product(RED) Redux

The viewpoint expressed in this BusinessWeek article is the embodiment of the downside I described in my post last week on Product(RED).  Companies should be applauded for their donations to worthy causes, but they should not be allowed to hide behind charitable donations as an excuse for other bad behavior.   

Does this mean that every company donating a portion of profits to charity is hiding something, or is a bad company?  Of course not.  But the central premise of the BusinessWeek piece, that the primary measurement (instead of just one component) of corporate social responsibility (CSR) is the percentage of profits donated to charity, is an overly simplistic concept that will benefit companies but will not benefit consumers or society at large. 

(Indulgences, in case you’re wondering, were a common practice among priests in the Middle Ages.  Wealthy people could “donate” to the church and in return receive forgiveness for their sins. The bigger the sin, the bigger the donation. If I recall, the practice of selling indulgences to raise money for the church was one of Martin Luther’s 95 complaints nailed to the church door that launched the Protestant Reformation.)

A Proposed Solution: An independent certification of CSR

We need some objective third-party institution to evaluate companies as good corporate citizens.  They would define the requirements (in areas of labor relations, environmental standards, marketing practices, etc.) and do an organizational audit of any company wanting to publicly claim to be a good corporate citizen.  Or rather than a single institution to carry out this work, maybe the expertise to label people CSR compliant becomes a specialization of some auditing firms, kind of like SAS 70 certification for financial controls.

Who should pay for the work?  I think the certifying institution should be independent of businesses but the businesses who want to be certified should pay a fee to go through the process.  Much like SAS 70 process, the auditing firms could first come in and give any company recommendations about what they would need to do to become CSR compliant.  The company decides what they are willing and able to do, and after their changes are in place the CSR firm comes back to certify them, or not.

Truth in Advertising

Do all businesses have to be good corporate citizens? Absolutely not.  Some businesses are not interested in promoting an image as good corporate citizens.  They have other objectives and use other strategies to carry them out, and that’s fine.  Others may continue to give to charity but are not trying to claim status as good corporate citizens.  That’s fine, too.

But those companies that are publicly using the image of themselves as good corporate citizens in order to convince consumers to patronize them (and workers to work for them) over their competitors are in fact advertising through those claims. In my experience, almost all companies include their corporate philanthropy budget in their marketing budget.

Just like consumers have a right to know what’s in those hot dogs, or whether there is any proof that that miracle cream really does all the things the manufacturer claims, I think we also have a right to know how truthful claims of good corporate citizenship really are.

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