How to align your corporate foundationā€™s ESG goals with core business strategies
Sep 23, 2024Many organizations are opting to channel their philanthropic work via a stand-alone corporate foundation.
This structure can have many benefits. It provides more consistent support to third parties and creates a framework for longer-term initiatives with an extra degree of credibility, given the separateness from the core commercial organization.
But based on my conversations with clients, this same separateness can also create challenges for the sustainability leaders at their helm.
They struggle to secure buy-in from senior leadership or demonstrate a sense of alignment between the goals of the company and those of its corporate foundation, all of which may have a secondary effect on the resources made available.
For those navigating this challenge, here are three suggestions to create a greater sense of cohesion between corporate foundations and companies — and better embed the goals of a corporate foundation within the strategy of the core business.
Watch our exclusive chat with Alan Barbieri on aligning your corporate foundation's ESG goals with core business strategies.
Create strategic alignment at the outset
The work of any corporate foundation should be conceived with the core business in mind. This strategic alignment ensures that the two organizations aren’t passing like two ships in the night or — even worse — pulling in opposite directions. Instead, they should share values and specializations, facilitating overlap and opportunities to work side by side.
"This strategic alignment ensures that the two organizations aren’t passing like two ships in the night or — even worse — pulling in opposite directions."
The Human Safety Net, the corporate foundation of insurance and asset management firm Generali, is a great example of this symbiosis in action. In 2019, the foundation’s staff sat down with both Generali’s senior team and members from their nongovernmental organization (NGO) partners to map a strategy. Together, they determined the best way to create cohesion between the foundation and Generali’s skills, products and services to maximize social impact. Generali’s Head of Programmes Alan Barbieri spoke about this approach at a recent Impact Leaders Lab event.
Through this collaborative exercise, they identified three shared pillars of work: the responsible investor and insurer, the responsible employer, and responsible citizen. Together, they identified these initiatives and developed each one, some via the foundation and some via the core business.
By articulating the shared values and goals that underpin both organizations from the start, it creates a clear point of connection.
Learn to speak the same language
Ensure that you communicate with business colleagues in the core commercial organization in a language that resonates.
Remember, their gauge of success is inextricably linked to commercial key performance indicators rather than purely social impact, and so initiatives or requests for investment for the corporate foundation need to be couched (at least in part) in these terms. Otherwise, you risk reinforcing that sense of separateness or make it seem as if the needs of the foundation are somehow at odds with that of the core business.
“For example, show the impact of the foundation’s work in terms of retention or visibility,” suggested Barbieri. “You need to start defining how you can monetize some of the externalities that an investment in impact would bring. Then they start listening. And once they’re open to listening it all gets easier.”
Barbieri has effectively demonstrated the commercial value of The Human Safety Net to the Generali board, securing some $4.4 million per year in co-funding for its projects. “Recognition for such a young organization meant more internal visibility within the business,” he added. “And that meant more interest came from different business functions, which began reaching out to us for collaboration.”
Design robust mechanisms to measure impact
Make it as easy as possible for senior leadership within the core business to understand what the corporate foundation has achieved — and what it hopes to achieve going forward.
Don’t bog them down in the operational details, advised Barbieri. “Boards do not have the time or the interest for that,” he said. At The Human Safety Net, the team devised a simple dashboard, he explained, that takes evidence collected from the ground and provides a snapshot of progress.
This dashboard combines a measurement strategy that analyzes short-term metrics, such as the number of jobs created through its work with refugees, with a program strategy that evaluates impact over a much longer timeline, such as early childhood development.
The secret is to create a holistic summary of the short-term and the long-term impact for senior leaders and ensure the two are operating in parallel and in a complementary way to one another.
Make sure that every element of the foundation’s impact can hold up to scrutiny, too.
Develop due diligence for both the selection of NGO partners and projects, and create robust mechanisms for the distribution of funds and monitoring impact too. “You have to have the engine behind the actual operations and initiatives to be able to send that money out into the field that you’re trying to impact,” said Barbieri.