Leadership and Trends
in Global Corporate Giving
Margaret Coady
Executive Director, CECP
@MargaretCoady @CECPTweets
THE CEO FORCE
FOR GOOD
44
A lot has changed in 15 years….
55
A lot has changed in 10 years….
66
77
Leadership and Trends in Corporate Giving
in Strategy
in the Data
in Conversation
1.
2.
3.
8
An Unscientific History of Corporate Giving
Local, reactive, heartstrings-driven
 Give if asked; “good neighbor” giving...
The Great Rebalancing
▪ Emerging markets gaining
larger share of global GDP
▪ Growth of a multi-polar
global economy
The P...
10
Motivations Point in the Same Direction
• Search for growth
• Access new
markets
• Pursue
innovation
• Demand for
trans...
11
“Changes in the external environment and a
generational shift are creating a greater awareness
amongst businesses and a...
1212
Leadership and Trends in Corporate Giving
in Strategy
in the Data
in Conversation
1.
2.
3.
13
• 240 Companies across all industries
• Revenue = $15.7 billion USD
• Pre-Tax Profit = $ 1.7 billion USD
• Employees = ...
1414
Annual Insights Reports: Giving in Numbers
Trends in the Data
1. Giving rebounded faster than
revenues… but not for a...
15
Business performance rebounded somewhat from 2009 to 2010, but
in 2012 companies still did not earn as much as they did...
1616
Companies Are Giving More
Than Before The Global Recession
Distribution of Companies by Changes in Total Giving Betwe...
1717
Non-Cash Giving Growth Drove Overall Giving
Increase from 2007 to 2012
Note: All Figures in Billions, 6-Year Matched-...
1818
Reasons for Giving Increases
1. Increased Non-Cash Contributions
2. Improved Business Performance
3. Increased Commit...
19
Companies today are more likely to invest the majority of their
philanthropy programs in individual program areas compa...
20 Note: Medians, Inflation-Adjusted, N=38.
$31 792 $31 459
$34 606
$45 604
63
51
63
50
30
40
50
60
70
80
$17 000
$27 000
...
2121
Leadership and Trends in Corporate Giving
in Strategy
in the Data
in Conversation
1.
2.
3.
2222
1. Broadened Leadership for CEOs
2. Sustainability vs. Philanthropy vs.
Shared Value
3. Telling the Story: Measuring ...
2323
Who will lead progress toward long-term societal
improvement?
Broadened CEO Leadership: Polling Result
3%
8% 8%
26%
5...
24
“The CEO has to lead by being the Chief
Engagement Officer, to build trust and
reputation by behaving with genuine humi...
25
Broadened CEO Leadership: 4 Tensions
Inspire
Employees
Guide
Consumers
Educate
Investors
Engage
Partners
Engaged employ...
2626
As CEO, what is the most effective step I can take to
help restore public trust in business?
3%
10%
10%
14%
28%
34%
I...
27
Sustainability vs. Philanthropy vs. Shared Value
Philanthropy is
dead!
Giving back
implies we
took
something!
Not every...
28
Sustainability vs. Philanthropy vs. Shared Value
29
Indra Nooyi
Chairman and CEO
PepsiCo
Sustainability vs. Philanthropy vs. Shared Value
30
Inputs
‒ Money or staff time invested into societal initiatives.
Activities
‒ Engaging with community programs through ...
31
A Majority of Companies are Measuring the Societal Value of their
Contributions
18%
35%
47%
Very
Experienced
(5 Years o...
32
Total
Value
Business
Value
Societal
Value
Managing
Risk
Building
Intangibles
Reduced
Costs
Increased
Revenues
• Higher ...
33
1. Have a specific purpose for collecting data (or
asking your grantees to collect it).
2. Measurement is most powerful...
34
Key Takeaways
34
1. Much has changed in 15 years
• A convergence of expectations, issues,
and strategy.
2. The data sho...
35
Next Steps
35
If you like data...
• Download “Giving in Numbers” and the CSI Handbook
• Check out CECP’s latest infogra...
THANK YOU
Margaret Coady
Executive Director, CECP
@MargaretCoady @CECPTweets
Margaret Coady - Committee Encouraging Corporate Philanthropy
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Margaret Coady - Committee Encouraging Corporate Philanthropy

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The executive director of the New York-based Committee Encouraging Corporate Philanthropy discusses the CECP's research into global giving trends and how it encourages commitment by CEOs to social investment.

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Margaret Coady - Committee Encouraging Corporate Philanthropy

  1. 1. Leadership and Trends in Global Corporate Giving Margaret Coady Executive Director, CECP @MargaretCoady @CECPTweets
  2. 2. THE CEO FORCE FOR GOOD
  3. 3. 44 A lot has changed in 15 years….
  4. 4. 55 A lot has changed in 10 years….
  5. 5. 66
  6. 6. 77 Leadership and Trends in Corporate Giving in Strategy in the Data in Conversation 1. 2. 3.
  7. 7. 8 An Unscientific History of Corporate Giving Local, reactive, heartstrings-driven  Give if asked; “good neighbor” giving  Give to causes important to senior leaders  Intentionally NOT strategic or connected to the business for fear of a backlash Visible, proactive  See other companies begin to get credit  Grants are proactive and “make sense”  Better measurement of inputs Strategic, aligned, beyond cash  Accept very few unsolicited grantee proposals  Giving as a “portfolio” of expectations to manage  Co-design initiatives with nonprofit partners  Greater attention to employee engagement
  8. 8. The Great Rebalancing ▪ Emerging markets gaining larger share of global GDP ▪ Growth of a multi-polar global economy The Productivity Imperative ▪ Economic growth in developed economies increasingly dependent on productivity gains ▪ Insufficient supply of highly trained talent for rising global demand The Global Grid Pricing the Planet ▪ Significant increase in resource demand as emerging markets surge ▪ Growing environmental pressures on business and society The Market State ▪ Growing need of states to compete for economic growth and innovation ▪ Competition to attract business activity ▪ Increasing interconnection of markets, trade, and technology SOURCE: Based on research by McKinsey & Company Context for Big Business Intensifying
  9. 9. 10 Motivations Point in the Same Direction • Search for growth • Access new markets • Pursue innovation • Demand for transparency • Scarcity of raw materials • Societal concerns Push Pull Blending Profits and Purpose
  10. 10. 11 “Changes in the external environment and a generational shift are creating a greater awareness amongst businesses and a greater need to act to address societal problems.” Joe Jimenez CEO, Novartis AG CEO Perspective
  11. 11. 1212 Leadership and Trends in Corporate Giving in Strategy in the Data in Conversation 1. 2. 3.
  12. 12. 13 • 240 Companies across all industries • Revenue = $15.7 billion USD • Pre-Tax Profit = $ 1.7 billion USD • Employees = 32,000 USD • Contributions • Total Annual Giving = $19.9 million USD • Corporate Cash 47% • Corporate Foundation Cash 35% • Non-Cash 18% • Structure • Have a Foundation = 81% • Give Internationally = 71% Annual Survey of Corporate Engagement
  13. 13. 1414 Annual Insights Reports: Giving in Numbers Trends in the Data 1. Giving rebounded faster than revenues… but not for all companies. 2. Non-cash (mostly product giving) is growing, and dominates in aggregate. 3. Fewer, larger grants given to fewer cause areas.
  14. 14. 15 Business performance rebounded somewhat from 2009 to 2010, but in 2012 companies still did not earn as much as they did in 2007. 15 Business Has Been Slow To Recover Median Revenues Note: Inflation-Adjusted, 6-Year Matched-Set Data, N=93 Median Pre-Tax Profits $Billions Note: Inflation-Adjusted, 6-Year Matched-Set Data, N=96 $30.56 $26.95 $26.41 $28.31 $29.45 $29.90 2007 2008 2009 2010 2011 2012 $3.76 $1.94 $2.14 $3.03 $3.63 $2.84 2007 2008 2009 2010 2011 2012 $Billions
  15. 15. 1616 Companies Are Giving More Than Before The Global Recession Distribution of Companies by Changes in Total Giving Between 2007 and 2012 Note: Inflation-Adjusted, 6-Year Matched-Set Data, N=96 PercentageofCompanies 24% 11% 3% 3% 7% 14% 38% Decreased by more than 25% Decreased between 10% and 25% Decreased between 2% and 10% Flat Increased between 2% and 10% Increased between 10% and 25% Increased by more than 25% 59% increased giving 38% decreased giving
  16. 16. 1717 Non-Cash Giving Growth Drove Overall Giving Increase from 2007 to 2012 Note: All Figures in Billions, 6-Year Matched-Set Data, N=96 Non-cash giving as a percentage of total giving grew from 57% in 2007 to 69% in 2012. $6.16 $6.05 $6.98 $8.55 $9.43 $10.46 $4.63 $4.53 $4.29 $4.80 $4.93 $4.81 2007 2008 2009 2010 2011 2012 Non-Cash Cash $11.27 $13.35 $14.36 $15.27 $10.58$10.79 57% 69%
  17. 17. 1818 Reasons for Giving Increases 1. Increased Non-Cash Contributions 2. Improved Business Performance 3. Increased Commitment to Education Initiatives 4. Mergers and Acquisitions 5. Better Tracking of Contributions Reasons for Giving Decreases 1. Company-Wide Cost Reductions 2. Reduced Disaster Spending 3. Refreshing Focus Areas Reasons For Giving Increases and Decreases
  18. 18. 19 Companies today are more likely to invest the majority of their philanthropy programs in individual program areas compared to before the global recession. 19 Companies Are Focusing Philanthropy Programs To Achieve Deep Societal Impact $10.79 $10.58 $11.27 $13.35 $14.36 $15.27 0% 10% 20% 30% 40% $- $4.00 $8.00 $12.00 $16.00 $20.00 2007 2008 2009 2010 2011 2012 Total Giving (N=96) % of Companies Giving 50% or More to One Program Type (N=51) $Billions
  19. 19. 20 Note: Medians, Inflation-Adjusted, N=38. $31 792 $31 459 $34 606 $45 604 63 51 63 50 30 40 50 60 70 80 $17 000 $27 000 $37 000 $47 000 $57 000 2010 2011 2012 2013 Grant Size Recipient Organizations Per Grantmaker FTE Bigger Grants to Fewer Organizations
  20. 20. 2121 Leadership and Trends in Corporate Giving in Strategy in the Data in Conversation 1. 2. 3.
  21. 21. 2222 1. Broadened Leadership for CEOs 2. Sustainability vs. Philanthropy vs. Shared Value 3. Telling the Story: Measuring Impact Conversations with CEOs and Practitioners
  22. 22. 2323 Who will lead progress toward long-term societal improvement? Broadened CEO Leadership: Polling Result 3% 8% 8% 26% 55%
  23. 23. 24 “The CEO has to lead by being the Chief Engagement Officer, to build trust and reputation by behaving with genuine humility, moral authority, speed of action, and decisiveness.” Richard Edelman President and CEO, Edelman Broadened Leadership: CEO Perspective
  24. 24. 25 Broadened CEO Leadership: 4 Tensions Inspire Employees Guide Consumers Educate Investors Engage Partners Engaged employees feel you are not doing enough vs. Skeptical employees question your involvement Sometimes prefer detrimental to sustainable options vs. Want to know about corporate actions and impact Pressure to see quarterly returns and high ROI projects vs. Long time horizon for shareholder returns with “purpose” Collaborate while maintaining competitive advantage vs. Easier alone, but hard to address societal problems alone
  25. 25. 2626 As CEO, what is the most effective step I can take to help restore public trust in business? 3% 10% 10% 14% 28% 34% Include community and sustainability issues in the… Commit to public reporting of my company’s goals and progress… Rally fellow CEOs to engage more deeply in community issues Work with my company’s critics on practical changes to our… Further integrate my company’s values into our incentives and… Speak publicly, in my own voice, on what my company is doing and why Broadened CEO Leadership: Polling Result
  26. 26. 27 Sustainability vs. Philanthropy vs. Shared Value Philanthropy is dead! Giving back implies we took something! Not every societal problem has a commercial solution! The biggest polluters are the biggest givers! Our products change the world and we pay taxes - and that’s enough!
  27. 27. 28 Sustainability vs. Philanthropy vs. Shared Value
  28. 28. 29 Indra Nooyi Chairman and CEO PepsiCo Sustainability vs. Philanthropy vs. Shared Value
  29. 29. 30 Inputs ‒ Money or staff time invested into societal initiatives. Activities ‒ Engaging with community programs through program management, volunteering, and other activities. Outputs ‒ Measures of what gets produced from activities ‒ (e.g. # of students trained). Outcomes ‒ Immediate changes realized as a direct result of a program’s activities ‒ (e.g. % of students improving reading level). Telling the Story: Measuring Impact Impact ‒ Long-term results and ultimate social value ‒ (e.g. % of students going to college and getting jobs).
  30. 30. 31 A Majority of Companies are Measuring the Societal Value of their Contributions 18% 35% 47% Very Experienced (5 Years or More) Moderately Experienced (3-4 Years) Slightly Experienced (2 Years or Less) 76% Measure Outcomes and/or Impacts N=160. N=119. 24% Do Not Measure Outcomes and/or Impacts Telling the Story: Measuring Impact
  31. 31. 32 Total Value Business Value Societal Value Managing Risk Building Intangibles Reduced Costs Increased Revenues • Higher level of skills and education • Increased availability of employment • Improved health • Greater economic resilience • Enhanced environmental quality • …. • New customers • New Products • Extended uses for existing products • Market penetration • Differentiation / price premium • Innovation • Increased manufacturing capacity • Input optimization • Lower raw materials costs • Improved perception by existing and future customers • Enhanced brand value • Employee satisfaction • Enhanced supplier relationships • Raw material availability • Security of physical assets • Regulatory uncertainty • Reduced risk to the community • Logistics network capacity Telling the Story: Measuring Impact
  32. 32. 33 1. Have a specific purpose for collecting data (or asking your grantees to collect it). 2. Measurement is most powerful when used for learning. Be ready to make program changes. 3. Don’t “round up” or overstate your impact. 4. Understand how your actions fit into the arc of a broader theory of change, and focus on the effect of your actions as a piece of that story. 5. Measurement costs money. Selectively measure and budget for it from the beginning. Telling the Story: Measuring Impact
  33. 33. 34 Key Takeaways 34 1. Much has changed in 15 years • A convergence of expectations, issues, and strategy. 2. The data show a drive toward focus • Giving levels are up—focused on fewer issues and grantees. • Companies are leveraging the assets that make them unique. 3. A new role for companies and CEOs • Leading beyond the walls of your business. • Understanding the impact a company can have, with humility. Blending Profits and Purpose
  34. 34. 35 Next Steps 35 If you like data... • Download “Giving in Numbers” and the CSI Handbook • Check out CECP’s latest infographics If you like the CEO perspective... • Follow CECP’s YouTube Channel • Download our event Executive Summaries If you like Impact Measurement... • Download “Measuring the Value of Corporate Philanthropy” If you like Social Media... • Share with us on Twitter: @CECPTweets, @MargaretCoady
  35. 35. THANK YOU Margaret Coady Executive Director, CECP @MargaretCoady @CECPTweets
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