Status: it’s complicated

Research on Corporate Philanthropy

Start­ing in the 1990s, many of the highest-gros­sing compa­nies have set up corpo­rate foun­da­ti­ons, and not just in Switz­er­land. Nevert­hel­ess, they are (for now) a niche topic in inter­na­tio­nal non-profit research.

Nonpro­fit foun­da­ti­ons set up by major busi­nesses such as UBS, Cartier, KPMG, Lindt & Sprüngli, Syngenta and Novar­tis are a fami­liar presence in the Swiss charity sector. Small and medium-sized busi­nesses are now adding to the growing diver­sity of corpo­rate foun­da­ti­ons. Examp­les here include a foun­da­tion set up by a bakery with around a dozen bran­ches in the low-lying region to the north of Zurich. For the nonpro­fit sector, busi­nesses are an incre­asingly important source of finan­cial and non-finan­cial resour­ces. The latest surveys in the UK show that, all toge­ther, the top 400 compa­nies dona­ted more than CHF 550 million to chari­ta­ble causes – either through direct dona­ti­ons or their own foun­da­tion. Widely known corpo­rate foun­da­ti­ons with a long-term history of funding acti­vi­ties can also be found at Euro­pean level – the Siemens Foun­da­tion in Germany, for exam­ple; the LEGO Foun­da­tion in Denmark, set up by the toy manu­fac­tu­rer and, in England, the Lloyds Bank Foun­da­tion for England and Wales, set up by the Lloyds Banking Group.

Niche area of nonpro­fit research

Rese­arch into corpo­rate phil­an­thropy from both an econo­mic and social science perspec­tive has increased drama­ti­cally since the early 1990s. It has estab­lished itself as an important field of rese­arch in diffe­rent acade­mic disci­pli­nes. Corpo­rate foun­da­ti­ons, by contrast, were long regarded as a rare pheno­me­non among nonpro­fit foun­da­ti­ons and descri­bed by rese­ar­chers as ‘black boxes’ or ‘strange beasts’. Quite rightly, there were calls for more theo­re­ti­cal concep­tua­li­sa­tion, better data avai­la­bi­lity and studies with a geogra­phi­cal focus outside the USA.

The latest studies provide a better under­stan­ding and more clarity on key funda­men­tal ques­ti­ons. Who exactly are the corpo­rate foun­da­ti­ons, where do they operate, how many are there, what is their role in addres­sing the most important and most pres­sing chal­lenges of our time, and how do they commu­ni­cate their work?

Some of the key findings are:

  • Euro­pean corpo­rate foun­da­ti­ons are well inte­gra­ted in their foun­da­tion sectors, although the number, role and public percep­tion differs signi­fi­cantly from coun­try to coun­try. Their acti­vi­ties and orga­ni­sa­tio­nal struc­ture are clearly much more stron­gly influen­ced by their foun­ding company than by their social and poli­ti­cal environment.
  • Like social enter­pri­ses, corpo­rate foun­da­ti­ons are seen as hybrid orga­ni­sa­ti­ons. The term hybrid not only descri­bes their posi­tion between civil society and busi­ness but also their combi­na­ti­ons of diffe­rent charac­te­ristics at stra­te­gic, orga­ni­sa­tio­nal and contex­tual level.
  • Corpo­rate foun­da­ti­ons would be ideal part­ner­ship brokers for cross-sector stra­te­gic part­ner­ships – the kind that are essen­tial to any attempt to meet the sustainable deve­lo­p­ment goals (SDGs). They are still making too little use of their poten­tial in this role. 
  • The effec­ti­ve­ness of corpo­rate foun­da­ti­ons is signi­fi­cantly influen­ced by certain manage­ment prac­ti­ces (monitoring/evaluation and the invol­vement of experts, for exam­ple) and is posi­tively rein­forced by the nature of their acti­vi­ties, their expe­ri­ence and their inter­na­tio­nal alignment.
  • The inten­sity and scope of corpo­rate report­ing varies stron­gly between diffe­rent phil­an­thro­pic acti­vi­ties and in many cases utili­ses storytelling. 

Where the jour­ney is heading

Of course, there are many other aspects that future rese­arch should cover. The long-term impact of corpo­rate foun­da­ti­ons on the perfor­mance of the foun­ding company, for exam­ple, is still largely unclear and hotly dispu­ted in acade­mic circles. Looking ahead, we can also expect more acade­mic studies with a non-Western perspec­tive. There has, after all, been extre­mely rapid growth in the number of Chinese corpo­rate foun­da­ti­ons crea­ted since 2004, for exam­ple. It is vital that limi­ted data avai­la­bi­lity impro­ves over the coming years to enable more rese­arch with an inter­na­tio­nal or compa­ra­tive focus. It will be inte­res­t­ing to see the direc­tion in which rese­arch into corpo­rate foun­da­ti­ons deve­lops and how it holds its ground in the field of inter­na­tio­nal nonpro­fit rese­arch. Whether ‘corpo­rate’ and ‘foun­da­tion’ are actually natu­ral bedfel­lows or mutually exclu­sive is by no means a trivial ques­tion – and one that will conti­nue to be heatedly deba­ted, both in prac­tice and in acade­mic research.

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