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//With Unique Assets, Health Corporations are Poised to Have a Larger Philanthropic Impact

With Unique Assets, Health Corporations are Poised to Have a Larger Philanthropic Impact

peart/shutterstock

peart/shutterstock

Corporate philanthropy has been evolving in recent years. Historically, corporate giving—which comprised about 5 percent of total charitable giving in 2017—tended to lack strategic focus and as a result, donations were often fragmented and committed to causes unrelated to the business. That’s been changing as more companies align their philanthropy with their mission and make better use of such assets as the volunteer time of skilled employees and donated products that can help nonprofits.

In some cases, corporate funders are even moving ahead of private foundations because they take a more holistic view of how change happens and fusing traditional grantmaking with market-based approaches in ways that traditional foundations either can’t or won’t do. For example, banks like JPMorgan Chase are not only providing financial support to nonprofits engaged in jobs training and community development, they’re also investing capital in businesses created by entrepreneurs of color and having bank employees provide technical assistance to those start-ups.

Another area where corporate philanthropy is getting more strategic—and has the potential to evolve much further—is life sciences and healthcare.

The consulting firm Deloitte explores this potential in a new report, “Foundations in Life Sciences and Health Care: Reimagining Corporate Philanthropy to Amplify Impact.” The report examines how “the current health ecosystem and evolving stakeholder expectations” put life sciences and healthcare foundations in “the unique position to effect critical change, and alternative engagement models with demonstrated track records of success on an international scale. “

Inside Philanthropy recently spoke with Deloitte’s Sally Stansfield and Hanna Patterson to discuss the report. When asked about the catalyst for this paper, Stansfield—who in her distinguished career has also worked for a large “traditional” foundation—said that there’s a lot of important work going on right now by corporate philanthropies that needs to be more widely shared. Efforts by life sciences and healthcare companies to boost their social impact is a case in point.

The drivers of change here are multi-fold—beginning with the public’s expectation that this industry needs to do better. As the report notes, “consumers, employers, and governments are increasingly strained by rising health care costs.” The result is that people are paying close attention to inefficiencies and are expecting greater value. One way companies can be responsive is through robust and strategic philanthropy that can produce “visible and impactful investments in health and well-being.”

Life science and healthcare firms bring huge assets to the table for such work, including for addressing the social determinants of health. The report notes that “only 20 percent of health outcomes are determined by the strength of traditional health delivery systems, and 80 percent are determined by the broader health ecosystem, though the clear majority of health care funds are still being spent on the former.” Putting philanthropic emphasis on initiatives that address the other 80 percent makes sense—and that’s exactly where many private foundations have been focused in recent years, as we’ve often reported. While some life sciences and health care corporations also focus giving in this area, the report stresses that these companies can much do more. It notes that “many life sciences and health care businesses, especially payers and providers, have already begun investing in the infrastructure necessary to promote and monitor community health and well-being.”

Another asset that life sciences and health care corporations bring to social impact work is that they have “significant experience with long-term research and development investment, which closely mirrors the type of investment required for strategic philanthropic vision and sustained impact.” These companies have the capacity to measure outcomes to ensure that their dollars are making an impact and moving the needle on outcomes.

The backstory here is that life sciences and health care companies have increasingly been asked to demonstrate accountability by both payors, the government and the consumers. This “data- and evaluation-driven culture” makes them uniquely adept at measuring what works when it comes to philanthropy. Stansfield notes that life science and healthcare organizations are used to using “metrics to document effectiveness. The research and development culture bring a disciplined approach to holding themselves accountable.” Arguably, this level of accountability for results is rarely achieved consistently or effectively by private foundations.

A third area where corporations excel is creating meaningful partnerships—a critical strength when it comes to tackling big and complex problems. According to the report “governments, institutional investors, academia, nonprofits, foundations, and businesses all coexist in the social impact ecosystem and bring different strengths to the table.” However, unless these institutions can effectively coordinate their efforts, their impact may be diminished.

Life sciences and health care corporations have deep experience working with a range of partners in complex networks. This experience can be a major asset in ambitious philanthropic initiatives.

An example highlighted in the report is Novartis Foundation’s multi-sector approach to addressing hypertension and its underlying risk factors through its Better Hearts Better Cities initiative, which targets cities of Ulaanbaatar, Mongolia; São Paulo, Brazil; and Dakar, Senegal. The Novartis Foundation’s “approach to partnerships seeks to address all parts of the challenge that hypertension poses in these low- and middle-income communities.” It uses both global and local partners, not only for their expertise, but to ensure that local perspectives are baked in during the development phase “to help make implementation more effective and sustainable by assuring it is locally owned and contextually appropriate.”

Stansfield says that corporations have become much better at scoping issues and taking a “holistic perspective versus just focusing on outcomes.” Because of this “corporate foundations are looking to establish partnerships that support ongoing initiatives, rather than one-off events, to
be able to empower sustainable impact. “

Some corporate foundations have had far more success than others in developing effective philanthropic initiatives. One challenge for these philanthropies is getting the full support and buy in of their corporate parent. Unlike their noncorporate counterparts, these foundations have to “operate in parallel with the corporate host.” Hannah says that “how they communicate value up to corporations, especially at the executive level, is essential.” Ultimately, they need to have “really gained alignment with the board of directors.” According to Hannah, the corporate foundations that are successful at this “have bridged that gap by having a thoughtful communication strategy” as well as securing “agreement on the time period of impact as companies work on a quarterly basis and a lot of the work requires a much longer time frame.”

While corporate foundations do seek to achieve a social good, they still are highly mindful of the bottom-line considerations for the corporate host—which tend to be laser-focused on earnings. Drawing a line between profitability and robust philanthropy isn’t always easy, but we’ve reported on how a growing number of corporations see a range of upsides to a larger, more strategic commitment to social impact work.

One key consideration is attracting talented employees. Many workers, especially millennials—who now comprise almost 50 percent of the U.S. labor force—expect the organizations they work for to reflect their values. Having a robust corporate philanthropy program can be key to attracting and retaining a high performing workforce, which in turn impacts the bottom line. Similarly, the public is paying attention to a corporation’s social footprint. Increasingly consumers are tying their purchasing decisions to corporations perceived as being philanthropic.

Stansfield expressed hope that the Deloitte paper might “generate broader knowledge sharing among corporate foundations.” More so than their private foundation counterparts, she says that corporate philanthropy is “siloed,” with less sharing among and between foundations. In conducting research for the paper many of the foundations approached tended to see their experiences and challenges as “unique” when, according to Stansfield, “there is more commonality than thought.”

Related: Here’s What You Need to Know About Corporate Philanthropy Right Now

2019-04-05T10:48:08-07:00April 4th, 2019|Categories: Nonprofit News|