A Simple Idea for Catalytic Philanthropy in the 21st Century

Catalytic PhilanthropyBy Shari L. Edelstein

Historically, philanthropy is not considered in the context of business. Yes, there are business leaders who give and there are corporations with philanthropic activities. What is new and emerging is that corporations are going beyond ‘traditional’ corporate philanthropy as they integrate social objectives into their business strategy, not for public relations, but because expanding corporate citizenship is being deemed inherent to a company’s success. As this movement continues to gain momentum, there are increasing opportunities for philanthropy to facilitate and inform this process and support its growth.

In a 2014 report issued by the Boston College Center for Corporate Citizenship, Executive Director Katherine V. Smith shared that “executives have issued a clear verdict: corporate citizenship delivers real business results.” According to the Center’s report, “the majority of executive respondents are choosing to meet the social and business challenges of our time by thoughtfully integrating corporate citizenship into business strategy and are meeting objectives such as increasing market share and improving financial performance.”

United in the belief that societal improvement is an essential measure of business performance, a coalition of CEOs, the Committee Encouraging Corporate Philanthropy (CECP), has grown to a movement of more than 150 CEOs of the world’s largest companies across all industries. Founded in 1999, CECP revenues of engaged companies reach $7 trillion annually. CECP publishes trends in corporate giving in its annual Giving in Numbers report; the 2013 report offers an in-depth analysis of 2012 corporate giving data from 240 leading companies, including 60 of the largest FORTUNE 100 companies.

Along the same lines lies the concept of “Shared Value,” a principle that entails “creating economic value in a way that also creates value for society by addressing its needs and challenges.” The Shared Value Initiative – lead by the nonprofit consulting firm FSG – brings corporate, community and government leaders together to strengthen and engage a global community, offering opportunities for “simultaneously creating business value while addressing complex social problems.” FSG Founder and Managing Director, Mark Kramer notes that “companies often have greater impact on the lives of people and the health of our planet than foundations or nonprofits. They bring tremendous expertise, technology, influence and resources to the social and environmental challenges we face. Above all, they operate at a scale that few nonprofits can match. When McDonald’s decided to put apples in their happy meals, they doubled America’s consumption of apples overnight.”

What does this have to do with philanthropy?

Aron Cramer, CEO and President of Business for Social Responsibility, believes that “too often philanthropists overlook the importance of Corporate Social Responsibility (CSR) and social enterprise. For those who are looking to catalyze social, economic and environmental progress, catalytic philanthropy for CSR can be a very useful tool, for two reasons. First, this can achieve change in the way business is done. Second, support for CSR/social enterprise is likely to have longer lasting impact, since it can create models that are sustainable, rather than models that will rely on philanthropic support forever.”

As with other fields, increasing numbers of nonprofit organizations are working to promote a just and sustainable world by supporting this growing interest within the business community. These nonprofits need catalytic philanthropic support to make this happen. Thus, a great starting point to tap into this growing trend can be made by allocation of grants to nonprofits working in this arena. Financial support for this nonprofit sector can allow foundations and philanthropists to multiply their impact on a broad range of social change issues by leveraging resources to promote developing business practices, norms and objectives.

According to Andrew Kassoy, co-founder of B Lab, “philanthropy is essential to support field building and growing the market structure to make way for new businesses to develop in this arena.” The growing field of benefit corporations (for-profit corporate entities that include positive impact on society and the environment in addition to profit as legally defined goals) relies on marketing and an instructional framework that has not yet been established. “Foundation support to seed these infrastructures can be instrumental in building the field,” shares Kassoy.  In particular, Kassoy continues, communities that are driven by values have the potential to motivate people from the entire political spectrum. “In that sense, we are looking for the enlightened philanthropist.”

Now is the time to help propel the movement forward, filling in gaps that may not be supported directly by business. Philanthropic seed funding can help these nonprofits challenge norms and demonstrate what is possible within business, creating an exponential impact on issues such as human rights, economic inequality and climate change. Each of these organizations works on the premise that philanthropic support can seed new initiatives that the business world might not be ready to initiate. For example, seed funding can support research expanding the field of knowledge, development of evaluation tools, facilitation of cross sector convenings, and support for the expansion of corporate certification programs and advocate for new policies to support these trends. (For current examples of needed philanthropic seed funding, see below.)

Tackling important social justice issues has long been rooted in the Jewish tradition of social activism and tikkun olam. While grants may be a traditional form of philanthropy, supporting the business community in reaching its potential for impact on these issues is something most foundations have yet to do. “As I look around at the corporate social responsibility community it’s interesting to see how many of the early leaders and ongoing leaders have come out of the Jewish community,” says Aron Cramer. “If you think about some of the pioneers in this movement … their beliefs, experiences, and ways of seeing the world suggest that business has a role to play besides just making a profit.”

In short, it is time to consider ways that Jewish philanthropy can leverage relatively limited resources to multiply the potential impact from corporate and business spending – all in the name of promoted shared values of universalistic issues.

To learn more about related topics, see ejewishphilanthropy.com/tikkun-olam-in-the-21st-century/, ejewishphilanthropy.com/jewish-philanthropy-and-corporate-social-responsibility-a-missing-link/, and recordings from a JFN three part webinar series on trends in corporate citizenship: www.jfunders.org/resources/philanthropic-resources/trends-corporate-citizenship-series-part-i-corporate-social.

Shari L. Edelstein is a philanthropic consultant based in Boulder, Colorado.


Examples of possible philanthropic seed funding:

BSR (Business for Social Responsibility) is a global nonprofit network that works with business to create a just and sustainable world. BSR applies philanthropic funding to launch and implement new initiatives that enable innovative practices to improve business’ approach to key corporate responsibility issues, and to enable powerful collaborations between business, civil society, and the public sector. In particular, BSR seeks seed funding to support efforts of corporations on issues of climate change, inclusive economic growth, and human rights, including women’s empowerment. Philanthropic support would enable BSR to move forward with efforts to raise awareness and better practices among businesses.

FSG’s Shared Value program – which aims to leverage foundation and government spending with shared corporate interests – would like seed funding to launch a project to develop measurement tools to identify shared value companies in an acceptable standard measurement. Such measurements can enable these companies to communicate their value to investors, and help investors identify shared value companies among publicly traded corporations. In turn, this access to information and ability to connect with like minded parties can create a synergetic affect as they pursue business actions with share similar social values.

B Lab, is an organization “that serves a global movement of entrepreneurs using the power of business to solve social and environmental problems. B Lab serves these entrepreneurs through three interrelated initiatives that provide them the legal infrastructure and help them attract the customers, talent, and capital to scale.” Aiming to be self sufficient in five years time, B Lab sees the need to grow and expand the field of access to and understanding of Benefit Corporations. B Lab has several initiatives geared towards educating the business community to be more intentional about how they do business. For example, B Lab’s Measure what Matters Campaign encourages businesses to measure their impact through the B Impact Assessment. Philanthropic funding would also allow B Lab to promote its message through the media, public policy research and advocacy for policies to create incentives for businesses.

In a different direction, JLens, a nonprofit working to bring Jewish engagement to the investment and business world, offers outreach events and conducts research through foundation support to raise awareness of the various options investors can consider. JLens is guiding the community to develop a uniquely Jewish investment lens guided by the community. Soon, JLENS will be launching the first Jewish values-based mutual fund focused on social, environmental and Israel-related advocacy, providing a platform for Jewish investor activists to encourage companies to do more to repair the world.

The Interfaith Center on Corporate Responsibility (ICCR) works to build a more just and sustainable world by integrating social values into corporate and investor actions through a lens of faith. In the past two years, ICCR received two foundation grants and consider philanthropic support as a growth area. In both grants, ICCR was able to focus on a specific issue and group of companies and address an issue shared by the funder and the company partners with a dedicated staff. For example, the Robert Wood Johnson Foundation supports the Access to Nutrition initiative which addresses concerns about the issues of obesity and under-nutrition (particularly as they affect children). ICCR members have begun to use their positions as investors to encourage some of the largest publically-held food, beverage, restaurant, retail, and media companies to help increase demand for and access to healthy foods. ICCR is working on a number of priority issue areas – including human trafficking in the supply chain, climate change, water (access, rights, supply), domestic and global health – and foundation funding for any of these topics could enable ICCR reach a turning point in their work.