Foundation Building Best Practice
Creating a Financial Bridge to the Private Sector
September 2000

This is an excerpt from the Foundation Building Sourcebook: A Practitioners Guide Based on Experience in Africa, Asia and Latin America.   Download printable PDF copy (152k) of this document, including source material on the foundations mentioned.   Order a complete 336 page Sourcebook The Sourcebook was written by A. Scott DuPree and David Winder with Cristina Parnetti, Chandni Prasad and Shari Turitz.

This section describes several approaches to building a financial bridge between the private sector and community development initiatives.

• Example 1: Leveraging Support
  Community Development Foundation (Mozambique)
• Example 2: Partnerships and Program-Related Collaboration
  Abrinq Foundation For Children's Rights (Brazil)
• Example 3: A Bridge between Business and Communities
  Philippines Business For Social Progress

Why Do Companies Give?

Summary Points The commitment of a few business leaders and businesses can help raise support and involvement from other businesses. In the case of the foundations in this section, the early involvement of business leaders was an essential element of their success in raising support from businesses. These people attracted other business leaders through their personal contact and each foundation's concrete demonstration of what it would do with the support of businesses. In the case of the FDC, support from a multinational corporation spurred local corporations to give. A successful approach is clear about what a company gets in return for its support and involvement. Businesses can benefit a, everyone does from a society in which their workers are more educated and live in healthy conditions and consumers have resources with which to buy their products. PBSP makes this relationship of business to society clear in its Statement of Commitment. Beyond corporate responsibility, foundations can offer valued services to companies while meeting their own objectives, i.e., channeling grants to communities that need them, connecting companies to government and NGO leaders and identifying opportunities for companies to showcase their philanthropy. Abrinq offers the use of graphic seals for companies that adopt good social practices. The seals can appeal to consumers of a company's products and help it in its marketing efforts. The foundation may see its role as a bridge between the needs and interests of civil society and business. The relationship between businesses and civil society organizations is sometimes characterized by a difference of objectives and conflict. Part of the role played by Abrinq and PBSP has been to find solutions where both sectors can win. The foundations are careful to make it clear they offer services to both sectors. They believe that a healthy society values both business and nonprofit contributions. A professional staff who can relate well to business and nonprofit leaders is a key element to the success of business/foundation collaboration. Both Abrinq and PBSP have recruited highly professional staff and invested in their training to assist them in forging good ties with both their business and nonprofit partners. They have staff members responsible for fundraising, marketing and member services as well as grantmaking and other programs.

The short and quick answer is if companies acted in a social vacuum they might not give at all. Economist Milton Friedman cautions the business of businesses is to generate profits, not to solve social and economic problems. Nevertheless, business is a fundamental part of society and does not operate in a vacuum. Profits and the stability of a company are affected by social, economic and environmental factors defining the market and the context in which it operates.

The reasons why businesses get involved are as diverse as the types of business. Some resources for learning about corporate philanthropy are listed in the appendices. It may help to have in mind a few general observations about corporate philanthropy around the world:

• Some companies look for ways to link their giving to their business. The cases in this chapter indicate this may be a trend
• Some companies have established independent grantmaking foundations that handle all or a portion of their giving
• Multinational companies, for the most part, do not give at the same level outside of their home countries. Likewise, many companies link their grantmaking to the communities where their employees live or where their markets are concentrated
• Companies can give more than money. They can also give management expertise and services, products, volunteers, publicity and advice
• Beyond asking for donations, joint income earning opportunities. For example, renting the name or logo of a nonprofit to sell a product, can potentially be more lucrative and sustainable in the long run than asking for a cash contribution

How do Foundations Solicit Contributions from Companies?

To involve businesses, grantmaking foundations have conceived of a range of approaches, from soliciting in-kind contributions (e.g., computers or transport) to cause-related marketing and employees' rights campaigns. The three foundations discussed in this chapter have all succeeded in positioning themselves in a strong position in terms of corporate philanthropy or "social investment" in their countries:

• Mozambique's Foundation for Community Development (FDC) built a reputation as an accountable and credible channel of funding to community development initiatives in its country.
• The Philippine Business for Social Progress (PBSP), having been started by socially conscious businessmen in the Philippines, is now in its third decade as a membership foundation which has provided a platform for joint action for businesses and has leveraged considerable funding from a base of corporate contributions and membership dues.
• The Abrinq Foundation for Children's Rights in Brazil also began with the strong input of business leaders. Through its outreach, it has garnered support from a wide base of Brazilian businesses and individuals.

In each of these cases listed above, the foundations offered a broad vision of social impact to companies they sought to involve and have given them concrete opportunities to act. They have also specialized, to a large extent, in being a bridge between business and communities. None of these efforts are merely a one-time approach. They represent a core strategy that brings together business and community leaders to jointly solve problems and strengthen community efforts.

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