Slammed by the economy and global competition, a growing number of companies are retooling their business model to incorporate philanthropic strategies to address social and global problems that present obstacles to their business.
A key to creating that new model is to partner with nonprofits that share a company’s social goals and have organizational assets and challenges that fit with those of the company.
“Every institution, whether for-profit or nonprofit, will have unique assets available to them, and unique limitations that constrain their ability to act,” says Margaret Coady, director of the Committee Encouraging Corporate Philanthropy, or CECP. “It’s a matter of fitting those pieces together to create solutions for communities.”
Spectrum of giving
In looking for ways to partner with nonprofits, many companies offer a “spectrum of giving,” says Ellen Luger, a vice president at General Mills who oversees corporate giving and is executive director of the General Mills Foundation.
That spectrum, she says, ranges from financial and strategic support to technical support and “leveraging expertise by collaborating with like-minded companies.”
In its work fighting hunger, for example, General Mills has “engaged across the spectrum,” Luger says.
Four years ago, the company began partnering with CARE International to help women and girls in Africa learn food-processing skills so they could improve their economic independence.
The Minneapolis-based global food company provided financial support for about a year, and then began looking for ways to develop a deeper and more strategic relationship with CARE in addition to continuing financial support.
So in partnership with CARE it launched an online program known as Join My Village that lets visitors to the website make a contribution to an individual village to support education and business-skills training to help women and girls become change agents in their communities.
General Mills also has begun collaborating with Merck, which has engaged its own employees, contributed to the program and will help it expand to India in 2012.
And General Mills has launched a nonprofit, known as Partners in Food Solutions, that builds on the food expertise of more than 300 of the company’s research-and-development employees.
Through Partners in Food Solutions, General Mills has partnered with Cargill and Dutch ingredient-maker DSM, as well as the U.S. Agency for International Development, to deliver technical expertise to small and medium-sized food processors in Africa.
Partners in Food Solutions’ volunteers assist with technical issues to build the capacity of these companies, aiming through the transfer of knowledge to generate more jobs for small farmers.
“Mission alignment is key,” Luger says. “Both organizations are mission-driven, so a nonprofit must connect with a company in a way that supports both the nonprofit’s mission and the company’s mission.”
Finding a good fit
In identifying potential philanthropic partners, says Coady of CECP, “companies should be doing more listening and nonprofits should be doing more talking.”
A recent report from CECP and Accenture, entitled “Business at its Best,” says corporations need to listen.
“That means you have to create mechanisms for your company to become attuned to the needs of your community at a much deeper level than you ever have in the past,” Coady says.
Nonprofits and community leaders, she says, “often can detect trends in the community before a company can.”
So companies should think about inviting those community voices into their philanthropic and strategic-planning processes, she says.
Under the leadership of former CEO Chad Holliday, for example, DuPont invited nonprofits to review and comment on the company’s corporate strategy, Coady says.
If it listens well, she says, a company can put its expertise to work to make an impact on problems in the communities it serves.
Toyota, for example, is known throughout the world for the pioneering quality-management techniques it uses for its assembly lines, Coady says.
In June, at the Clinton Global Initiative, she says, Toyota announced a commitment to donate its production-system expertise to help schools, hospitals and other organizations in Gulf Coast communities affected by Hurricane Katrina.
Toyota partnered with a nonprofit known at the St. Bernard Project and with AmeriCorps to rebuild homes in the region, using its expertise to reduce by more than half the time needed to reconstruct homes in the region, Coady says.
Sustainable value creation
A business model developed by CECP through reports with Accenture and with McKinsey and known as “sustainable value creation” encourages companies to use all their assets to help address social problems that hurt or threaten their bottom line.
To do that, Coady says, companies should chart where they are headed; identify strategic business challenges they face; find connections between, on the one hand, their business challenges and opportunities and, on the other, underlying social problems; and then put the company’s assets to work to help overcome those social obstacles to the business.
“You put the full strength of your company to play a positive role in helping to solve the societal challenges you project are in the path of your company,” she says.
Consider Gap Inc.
In an industry that faces high costs to recruit, train and keep employees because of high rates of turnover, the specialty retailer partnered with The Door, a nonprofit that provides leadership-development opportunities to underserved teens.
Together, the two organizations designed a program known as This Way Ahead to help teens be more successful in the workplace by tapping philanthropic dollars, human-resources or HR expertise and employees’ time at Gap with expertise, experience and community outreach at The Door.
The result benefits both the company and the nonprofit, Coady says.
“Employees who volunteer their time to participate in the program really get a deep sense of fulfillment for having taken part,” she says. “And the team at Gap is building on what it already knows about how to make employees successful when they come to work for their first job, with information that will help the success of their company through their HR function.”
Benefiting at the same time, she says, are the nonprofit and the teens involved in the program.”
The lesson for corporations is to “recognize the opportunities,” she says. “See that your future business issues are connected to society’s issues.”