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.