At a 1995 Hong Kong conference on corporate philanthropy, Jamie Augusto Zobel de Ayala II was blunt about why companies must become involved: "We all pay for poverty and unemployment and illiteracy. If a large percentage of society falls into a disadvantaged class, investors will find it hard to source skilled and alert workers; manufacturers will have a limited market for their products; criminality will scare away foreign investments, and internal migrants to limited areas of opportunities will strain basic services and lead to urban blight. Under these conditions, no country can move forward economically and sustain development...It therefore makes business sense for corporations to complement the efforts of government in contributing to social development."
Mr. Zobel de Ayala is the perfect advocate -- in the Philippines, the name "Ayala" is nearly synonymous with business leadership, so when an Ayala speaks, people listen. The family controls the Ayala Group, one of the largest and oldest commercial conglomerates in the country with interests in banking, insurance, real estate development, telecommunications and public utilities.
The name "Ayala" is also closely associated with social investment. The Ayala Foundation (www.ayalafoundation.org)is one of the leading corporate donors in the Philippines, but it doesn't just make cash grants; it has a fully staffed foundation with programs in many aspects of the socio-economic development of Filipino society. In addition, the foundation has a new, US-based arm that encourages Filipinos there to contribute to social development programs in the Philippines. Mr. Zobel de Ayala II is the foundation's Co-Vice Chairman.
Jaime Zobel de Ayala II has been involved in business almost all his life. Named CEO of the Ayala Group in 1995 when his father, Jaime Zobel de Ayala, was required by company law to retire, he joined the company after earning bachelor's and MBA degrees at Harvard University, rising through the ranks. When he became CEO, his brother, Fernando Zobel de Ayala, became Executive Managing Director; the senior Jaime Zobel de Ayala serves as non-executive Chairman.
In 2001, at a meeting of the World Economic Forum, where Mr. Zobel de Ayala II is a member of the Global Corporate Citizenship Initiative, he asserted, "I don't really like the word philanthropy. I consider it more a matter of building trust in the community. It means working with a broader constituency than those who buy your products and services. It involves building good will."
He has served on many boards in the Philippines and around the world, including the Ramon Magsaysay Award Foundation, the World Wildlife Fund-Philippines and World Wildlife Fund (USA), and the International Youth Foundation. He also serves in advisory capacities with number of corporations and institutions, including Harvard University, Mitsubishi, the New York Stock Exchange and Toshiba.
Global Giving Matters: How do you define philanthropy? What particular definition of philanthropy would you offer for the Philippines?
Jaime Augusto Zobel de Ayala II: Philanthropy is a natural impulse of people to adjust to the social development needs of their environment.
In developing countries like the Philippines, where at least a third of our people live below the poverty line, individual and corporate philanthropy are critical in complementing the limited budget of government in addressing the basic needs of the disadvantaged. They are necessities in the struggle for social justice, for true equality, and for social and economic development.
Indeed, I believe that corporate social responsibility is a strategic management tool that all companies must learn to integrate into their operations if they are to develop a sustainable model of "trust" with the many communities they serve.
GGM: Considering the formidable presence of the Ayala conglomerate in the Philippines, what specific role do you think you, your family and the companies can take (or have taken) in the form of philanthropic leadership? Is the Ayala Foundation the largest of its type? Is it considered a family foundation or a hybrid which combines family and corporate clout?
Zobel de Ayala: Our family has a long tradition of philanthropy. When the first generation arrived in the Philippines, in the early 1800s, Margarita Roxas de Ayala immediately saw the need for quality education for girls. She invited Spanish nuns to come over and establish a school for girls and donated land and money to start it up. The school still exists today as La Concordia College in Manila.
We also believe that we need to give our corporate social responsibility the same kind of visionary and dynamic leadership that has kept us in leadership positions in the various industries that our companies are in. Ayala Foundation was the first corporate foundation established in the country and was the institutionalization of our family philanthropy.
While not large by global standards, it is probably one of the largest corporate foundations nationally, in terms of annual operating budget and in terms of its asset base. It is supported by most of the companies in the group and members of the family also continue to donate funds in their personal capacities. However, the Ayala Foundation also looks for ways to leverage the funds it receives from the Ayala Group and the family by forging partnerships with other business groups, government, bilateral and multilateral donor agencies, and individual donors to extend its reach and replicate successful programs.
It has also spearheaded the formation of NGO networks and multi-sectoral initiatives for various causes, including NGO governance.
GGM: Did you become involved in philanthropy as a youth? If so, in what form? How did your family or the institutions around you influence your thinking as you grew up? Would you describe any of these as role models?
Zobel de Ayala: Not extensively in that my financial and professional capacity was minimal in my early years. However, I did try to balance my life with broader community activities during my school years. My parents, especially my mother, were strong influences in widening my involvement in community activities. Both, in different ways, have always sought to use their influence positively to reach beyond their immediate area of responsibility and make a difference. With respect to corporate involvement and social development goals, I came to my own personal conclusions when I returned to the Philippines from business school. I felt that the traditional business model was not fully aligned to the building of "trust" in our developing environment with its weak social support structures. That led me to strengthen my personal and corporate involvement in social development.
GGM: Can you describe any "favorite projects" that you think truly made a difference? In what way -- long-term, rural and/or urban, bridging digital and economic divides, etc?
Zobel de Ayala: I am proud of all the projects that Ayala Foundation has undertaken. They have always looked for innovative solutions to the problems of poverty through effective and efficient programs. Some exciting success stories would include the Ayala Young Leaders Program, the Center of Excellence in Public Elementary Education (Centex) and the Arts and Culture programs of the foundation through the Ayala Museum and the Filipinas Heritage Library. I would say these respond to needs that can only be addressed by companies or conglomerates of our size, and therefore present unique niches in the development world. By focusing on some of these long-term, scaled up projects, we do not duplicate what the smaller foundations and NGOs are capable of doing at their level.
The Ayala Young Leaders Program is our answer to the perceived need for value-based leadership in the country. Now in its fifth year, we identify 70 or so of the best student leaders from across the country, bring them to a three-day intensive congress that includes intellectual, physical, and spiritual activities. This congress exposes them to top Filipino leaders here and abroad whom they can look up to as role models. When they leave the congress, we continue to encourage them to network with each other and support each other in their quest for lifetime service and leadership.
Centex is a major innovation to offer the brightest children of poor families the very highest quality education we can. It incorporates cutting edge educational technologies and a holistic approach that emphasizes values, critical thinking, self-confidence, and leadership.
The Museum and Library respond to the need to inform our people, especially the youth, about the rich cultural and historical legacy that they are inheriting. We hope thereby to make them proud to be Filipino so that they, in turn, would be encouraged to give back to their nation. The Library's strength is its digital and Internet capabilities. It produces CD-ROMs and has a wired network of city and university libraries around the country sharing their database.
GGM: How have you instilled philanthropic thinking among Ayala family members? Is the youngest generation growing up learning about philanthropy?
Zobel de Ayala: My children are still young and their studies are their primary area of focus. However, their broader responsibility to society as individuals with the privilege of education and opportunity is regularly discussed, as are their activities in community related endeavors. My wife, in turn, is deeply involved in promoting reading through the formation of a foundation that aims to complement the early school curriculum, and my brother, sisters and their spouses have their own areas of commitment. In the end, we also hope that the next generation will learn by example.
GGM: How do you define the most critical needs in the Philippines right now, and how are you, as a corporate and civic leader, able to address them?
Zobel de Ayala: The issue of leadership was a result of a strategic planning session we held with our top executives about seven years ago. The Ayala Young Leaders Program was our response to that need. On the other hand, education has clearly been identified by sociologists and development experts as the single most critical development need globally to break the cycle of poverty. There are many others, of course -- environment, homelessness, malnutrition, child abuse and others.
Because these are endemic problems, we reach out to other companies and institutions to help us address these issues. On the environment, we have initiated a Solid Waste Management Program in the Makati Central Business District, using our strong influence among the commercial building owners and our locators in the malls to encourage them to segregate waste at the source and to mobilize communities for recycling composting efforts. We are also strong supporters of the local World Wildlife Fund for biodiversity and have linked up with other companies in reforesting a denuded Metro Manila watershed area.
In housing, we are deeply involved in Habitat for Humanity, not only by funding homes but also by mobilizing our employees as volunteers in building homes for poor families. We have also built thousands of housing units which are affordable by low income families. In responding to the issues of children, we have spearheaded the establishment of The Children's Hour, a fund-raising campaign that encourages employees to give one hour's wage for children's causes and advocates with the corporations to give a matching grant.
GGM: In what way have you been able to be innovative in philanthropy? In what ways do you think you can help improve philanthropic practice through the size of your company and your individual clout?
Zobel de Ayala: Many of our programs are social innovations and have been picked as models for replication by other companies and institutions. Our Market-Driven Skills Training Program was chosen by the USAID as a Best Practice Model in skills training. Our Youth Tech program, which puts up computer laboratories with Internet access in public high schools has been taken up as a model and replicated by a consortium of companies and institutions called ConnectEd.ph. Our Centex is now being considered by other corporations for possible replication in other areas of the country.
Ayala Foundation has spearheaded the formation of networks in order to share best practices, advocate for higher standards in NGO governance, and create synergies in the development world. Among these are the League of Corporate Foundations, the Association of Foundations, the Philippine Council for NGO Certification, and the Trisectoral Conference. We have always been willing to share our social development technologies with others, including our business competitors.
GGM: Do you have time to visit many of the projects you support? Can you describe any that have particularly moved you? Are you aware of projects that didn't work as planned, and how these difficulties are addressed?
Zobel de Ayala: I make it a point to get involved in many of these initiatives. I also encourage our other executives and staff to get involved through an employee volunteerism program. There is always a sense of achievement in both large and small projects. There are many meaningful examples. My mother supported the Mangyans (an indigenous people we have been helping in the island of Mindoro) and, with our Foundation's help, they received their Certificate of Ancestral Domain claim. This was a first step in ensuring their tenure in the mountains they have always lived in. Through our educational program for them, we now also have one Mangyan lawyer and three other Mangyan college graduates.
I have always been inspired and energized by the youth who join our yearly Leadership Congress. I join the screening process and make sure that I am there everyday to be able to chat with some of them and listen to their stories of hope and their dreams for the future. It is always a pleasure to run into them when I visit government offices or other companies and campuses where they are working and they introduce themselves as Ayala Young Leaders.
I have also been amazed at the transformation of the children of Centex and the excitement of the high school students when they start using the computers and surf the Internet. The work of the Foundation gives us all a psychic income we treasure.
Some years ago, Ayala Foundation tried to help the Department of Labor come up with an innovative solution to the problems of our overseas workers. They developed a program where the employers in Taiwan would agree that, after training the worker in the use of small equipment, they would give the equipment to the worker after, say, three years of employment with them. The idea was that the worker then sets up his own business in the Philippines using the equipment and the technologies they learned in Taiwan. The employment agencies thought we were horning into their territory and protested that we were competing with them without a license. So we felt that it was too controversial an area and ended the project before it could really take off.
GGM: How effective has the Ayala Foundation USA been? We realize that is still quite new -- has it begun to reach the Filipino communities throughout the US? Are there active donors?
Zobel de Ayala: Ayala Foundation USA is an innovative experiment to see whether we can encourage Filipinos who have done well in the US to give back to the country -- to their provinces, to their parishes, to their alma maters, or to some social development project that they are interested in supporting. The response has been heartwarming. Our donor base continues to grow, as does our beneficiary portfolio. But it is still a new approach that we still have to master.
Just last month, we signed Memoranda of Agreement with some communications companies, which we hope will give us greater access to Filipino-Americans and generate more support to projects in the Philippines.