Corporate foundations be warned: the pandemic pinch will come

by Julie Pybus Global Editor

The financial shock of the Covid-19 pandemic is yet to be felt by many corporate foundations – but it’s coming.

This was the warning from one of the speakers at the second edition of the annual C Summit, hosted by EVPA and Dafne and held online in December 2020.

Rosa Gallego, director of international relations at Spain’s representative body for foundations, the Asociación Española de Fundaciones (AEF), said: “One of the lessons from the 2008 crisis is that it always hits later.”

When funding becomes uncertain

On the first afternoon of the event's two-day programme, the C Summit hosted a discussion entitled When Funding Becomes Uncertain: how corporate social investors can plan in times of economic recessions. The aim was to examine how corporate foundations could boost their resilience if their annual budget was based on their host corporate’s profits. 

Gail Cunningham, head of investment learning at the UK’s Association of Charitable Foundations, said that her organisation’s research had shown that corporate giving tended to follow economic conditions, but it tended not to drop suddenly after a crisis.

She highlighted that foundations linked with consumer-oriented corporates might suffer during this economic crisis more than others which were linked with companies that had profited from the current conditions, such as those working in technology and health. 

Discussion participant Simon Kaiser, analyst at Wider Sense, a philanthropy and corporate social responsibility consultancy in Berlin, pointed out that earlier this year he had feared a sudden drop in interest from clients, but actually there had been “way more demand than ever before”. “Do we think it’s possible that this crisis is different in character?” he asked. “Is there a rethinking of corporate social engagement that therefore doesn’t lead to a funding slump for corporate foundations and CSR?”

Cunningham responded that in the UK there had been an “uptick” in interest in impact investment since March. She also pointed to a feeling among society that “we are all in this together” which could be encouraging companies to maintain their philanthropic giving and think about other ways they could be contributing to communities.

Magdalena Pekacka, executive director of the Polish Donors Forum, said: “When the pandemic started, I heard a few foundations panicking; there were a lot of concerns. But now no-one is thinking about it. It seems pretty stable in terms of funding for the next year.”

However, speaking to Pioneers Post after the discussion, Rosa Gallego warned that a crisis in funding was inevitable. She pointed out that it took at least two years for the effects of the 2008 recession to have an impact upon some foundations in Spain.

Gallego emphasised that, in addition to a drop in their resources, foundations should expect an increase in demands from their beneficiaries. “Foundations should work in a counter-cyclical way,” she said. “They should be ready to have more resources to act when there is a crisis.”

Foundations could only succeed in this if they diversified their income sources, she said. And for this to happen, they needed to be independent from, although still aligned with, their corporates. 

“Independence is the key to legitimacy and sustainability,” she said. 

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This time, it’s serious: Covid and the new age of co-creation with corporate social investors

by Anna Patton Managing Editor

Covid-19 is sparking a significant “cultural shift” within businesses, experts say, helping to move past the notion of corporate foundations as a tokenistic gesture towards doing good.

Carola Carazzone, secretary general of Assifero – the Italian national membership association of grantmaking foundations – told Pioneers Post that a deeper engagement between companies and their corporate social investors was helping to shed the idea of the latter as merely “a nice-to-have”. 

The role of corporate social investors was also broadening due to the upheavals of this year’s pandemic, she said. “What I’ve been hearing is that the silo vision, the one-size-fits-all approach – only corporate foundations, only grantmaking – is over. People are starting to think in a much more systematic way. People are really embracing complexity.”

The one-size-fits-all approach – only corporate foundations, only grantmaking – is over. People are starting to think in a much more systematic way

Accelerated alignment

Carazzone was speaking following a discussion at the 2020 C Summit, co-organised by EVPA and Dafne, in which representatives from two organisations linked to multinational insurance firms described some unexpected positive effects of Covid-19.

Both the Human Safety Net Foundation, set up by Italy’s Generali Group, and the Ageas Foundation, part of Ageas Portugal, had collaborated more closely with their respective parent firms this year, tapping into additional financial and non-financial capital and using a wider range of tools for social impact than before, said Carrazzone. 

Emma Ursich, group head of corporate identity of Generali Group as well as executive officer of the company’s Human Safety Net Foundation, which supports refugees and vulnerable young children, said Covid had “not really changed” strategic alignment between the two organisations, “but in many ways it has accelerated it”. 

As part of a €100m Covid emergency fund created by Generali, the foundation has issued grants and drawn on company expertise to support beneficiaries and partners. It is continuing to “add elements gradually” to its strategy, said Ursich. One new initiative is a ‘young talent’ project, enabling company employees to work alongside an NGO partner of the foundation or on product development. “We feel this is a great way to bridge that gap between the core business and the philanthropic element,” she said.

Ageas Foundation has also been able to tap into that desire to help, re-engaging many corporate volunteers who had been inactive, said Katrien Buys, director of strategy, innovation and sustainability at Ageas Group Portugal.

“Our foundation is very, very strong because it can count on so many volunteers,” she said, adding that work on a digital platform had helped to keep more volunteers “activated” beyond a one-off contribution.

Co-creators 

EVPA chair Steven Serneels echoed Carazzone’s optimism, saying his conversations with EVPA members suggested 2020 had been “an awakening” for many firms and a realisation “that only going for profit is a short-term strategy”. Company directors were seeing that they had to be “part of the solution”, he added, and might now “put more weight and expect more contribution from the corporate social investor in co-creating that journey.”

However, Serneels acknowledged that for some companies the economic hit of Covid could still lead to a drop in funds allocated to their foundation – echoing concerns heard elsewhere at this week’s C Summit. 

And, while Ageas Foundation had convinced managers at its parent company to redirect some of their bonuses to its projects, Buys said even this positive step was “not structural”, and that scaling up financially over the long term would still be a challenge.

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Work hard to work together: how the transition to a circular economy needs active collaboration

by Laura Joffre Reporter

Organisations need to collaborate with each other in order to build a circular economy, but they must be ready to put in the time and effort if they want to be successful.

This was the message from Siep Wijsenbeek, director of FIN, the trade association of Dutch charitable funds and corporate foundations, speaking on the first day of the C Summit. 

The circular economy is a new way of living, consuming and producing that remains within the boundaries of the earth's capacity, and which involves reducing, reusing and recycling materials. “In a way, we are borrowing from future generations, so if we want our children to have access to all these resources we need to change the way we work,” said Birgitta Kramer, program manager circular economy at the Goldschmeding Foundation, also speaking at the conference.

Working together is crucial to succeed in the transition towards a sustainable model, but how to achieve efficient collaboration between organisations – whether they are companies, philanthropic foundations, or public bodies – is not easy.

“You need energy, but directed energy,” said Wijsenbeek. Giving the example of Chantal Inen (also featured at the conference), founder and CEO of The Punchy Pack, a network which partners social entrepreneurs with foundations and investors to help them drive social and environmental change, Wijsenbeek said energy must be organised and directed to be successful.

The other necessary element to building fruitful collaboration is to identify all the different stakeholders and their interests. “You shouldn't underestimate the time and effort you need to make a good inventory about everybody’s stake and everybody’s agenda,” Wijsenbeek said. “Very often, people go and want to change something without listening to other stakeholders, and that doesn’t work. You may move very fast on your own, but you go much further in a group,” he added.

The interests and conflicts at stake in the transition to the circular economy are huge. Making sure they are all directed towards the same goal will make the difference between success and failure. Kramer said: “You don’t necessarily have to have a shared interest – because people and organisations can come in a collaboration from different angles – but if you have a shared ambition, that works.”

The transition to a circular economy cannot be achieved without the support of the government, said Wijsenbeek. “You have to liaise with them, and create this relationship, otherwise you’ll be nowhere,” he added.

But the government is difficult to move and rarely thinks of philanthropic foundations as a potential actor to solve a wicked problem. “When the Dutch government drafted their strategy on circular economy, philanthropy wasn’t mentioned in the report. It wasn’t there at all,” said Wijsenbeek. “So we set up a meeting with the state secretary and we had all these large foundations at the table, and that really put an anchor in the relationship between us and the government.” 

But that was only the first step. Dealing with the machinery of government – several ministries, ever-changing staff and political motives – doesn’t make the task easy. “If politics is that ‘circular economy is not important’, the government will do nothing because it won’t be a priority. So if you want to move the government in a certain direction, to get them to work with you, you need to invest a lot of time to get to know the right people and get the political pressure.”

Government lobbying is another area where foundations are good at working together: if a foundation lobbies on climate action for example, others can “piggy back on their efforts” said Wijsenbeek – by definition, philanthropic foundations are good at sharing, he added.

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How Renault’s reorganisation could put social impact in the driving seat

by Anna Patton Managing Editor

The reorganisation of French carmaker Renault is an “amazing” opportunity to accelerate the firm’s social impact, said the director of its Social Business Mobilize programme.

Speaking to attendees at the C Summit, the annual gathering for corporate social investors, François Rouvier described how the company’s new CEO, Luca de Meo, had decided this year to reorganise internally into four business units: Renault, Dacia, Alpine and New Mobility. The latter, which includes its Mobilize programme, “could be a social brand”, said Rouvier, who said it was “amazing” to see what had begun as a relatively small corporate responsibility initiative potentially becoming a “structural brand” for the Renault group.

Though it was unclear whether the Covid-19 crisis had directly influenced de Meo’s decision, Rouvier said that the pandemic had “accelerated” the firm’s social impact efforts. Many employees whose working hours were reduced during the peak of the crisis had spent their free time helping to address the effects of Covid; for example, engineers had worked to develop respiratory devices. 

Renault’s Mobilize programme was launched in 2012, and claims to be the first ever social entrepreneurship initiative from a car manufacturer.

The idea, said Rouvier (pictured), was that ‘social’ and ‘business’ were not incompatible “like vinegar and oil”, but could be merged “into something new”. 

The programme now covers three areas: partnerships with academia, including with HEC Paris, a business school with a strong focus on social business; an impact investment fund that backs innovative projects with a significant benefits for mobility; and development of other business projects – “as many as possible” – with a social impact.

Positive outcomes for people or planet could be found in every aspect of business, Rouvier said. “In every kind of business relationship, you can ask yourself: which social impact can I have? Which social ‘bonus’ can I give to the most vulnerable people I have as customers or producers?” 

Not like 2008

Renault’s case was presented as an example of how this year’s crisis could spark more awareness of social issues among businesspeople. 

Rouvier said employee engagement was “probably the most efficient way” to drive corporate change, because “there are plenty of ideas, plenty of people in companies who want to engage, and who know exactly what to do”. Many of those involved in Covid solidarity efforts wanted to continue in some way, he said.

But some of those attending today’s session expressed concerns that even the major upsets of 2020 may not be enough to drive long-lasting change. 

C-suite executives might want to do more, but not necessarily know how. Some may feel it’s better to delay making changes until the crisis passes – but once it's over, see little urgency to address major social problems. More education may be needed: consumers talk a lot about changing their buying habits, yet many unsustainable brands remain popular. 

And Vincent Faber, executive director of the Trafigura Foundation, reminded participants that many of the “big intentions” to do things differently after the 2008 financial crisis had fallen short.

“In the end, nothing really changed. So, let’s not do it again that way – let’s be serious about the change.”

Leslie Johnston, CEO of the Laudes Foundation, said philanthropic organisations could play an important role in challenging those who were still thinking too short-term.

“We can take risks, we can stick our necks out, we can inspire business to change… but we can also nudge,” she said. The foundation’s Fashion for Good initiative, for example, was matchmaking brands with innovators and had sparked “a flurry of creativity and ingenuity” to help make the fashion industry more sustainable. Those involved had also found ways to repurpose some of the tonnes of unwanted stock that could not be sold due to Covid. 

This nudging and influencing role was particularly needed to take on the climate crisis – “the biggest challenge of our century” – because business as usual would not be enough to make the change required, Johnston said.

“I don't even like the words ‘build back better’, because we don't want to go back, we want to go forward,” she said.

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On the ascent: Collective Corporate Impact Strategies, the new trend for big business and social investment?

Is it no longer enough for companies to set up foundations or corporate responsibility departments? Many not only have both but are also now creating more specialised social impact funds or accelerator programmes. Why is this and what does it signal? At the 2020 C Summit – the go-to annual event for corporate social investors – EVPA’s Karoline Heitmann set out new research exploring these innovative, more holistic impact approaches for corporate social investors.

by Tim West Founding Editor

One dimensional approaches are no longer enough if corporates and their foundations are to create a real and lasting impact for their communities, new research suggests.

In the opening session of the C Summit – the leading European event focused on corporate philanthropy and social investing, delivered by EVPA and Dafne – evidence of a new trend to set up 'multiple impact vehicles' among corporate social investors.

Participants were invited to consider why leading global businesses had recently launched new impact initiatives alongside programmes that already existed. Examples included Repsol Foundation, which recently launched a new impact fund; Ikea, which had set up Ikea Social Entrepreneurship alongside Ikea Foundation; and Danone, which had launched a water access fund next to Danone Ecosystem and Danone Communities. Why would a company do this – and were their motives and objectives always the same? 

Karoline Heitmann, EVPA's corporate initiative manager, said a series of in-depth interviews with companies and corporate social investors (CSIs) had revealed several practical opportunities: by setting up a foundation next to an impact fund, for example, they were able to tap into different financial instruments including grants, debt and equity, which could help in different ways to deliver positive impact. It was also an opportunity for some to support a new kind of social purpose organisation, like social entrepreneurs with a revenue generating business model. A third reason was to pursue new strategies for 'alignment' of their business and social goals. 

Besides these practical motives, there was, however, also a new underlying strategic motive. "Organisations are starting to find ways to work together towards a common impact vision." said Heitmann. "They are starting to think, ‘What is the unique opportunity and value that each one of us can contribute towards the vision, and how can we use and leverage our unique strength to design more holistic impact approaches?’"

Heitmann explained that, to achieve their long-term vision, non-profit and for-profit organisations, as well as commercial or scaling capital and grants, have to work together. In their search for "a common impact vision", many were pursuing what Heitmann described as a "collective corporate impact strategy", focusing on one of three approaches: scope, scale and depth.

Scope

In some cases, the company and the CSIs wanted to broaden their impact on society by taking on a range of different challenges and opportunities related to their vision, where they could really make a difference for society. This meant setting up different vehicles that could each focus on a new challenge or group of beneficiaries.

Danone and its impact funds, for example, all support the vision that business can be a force for good. The company's pursuit of this vision was evident through its award of the B Corp certification. Danone Ecosystem, however, focused more on the perspective of vulnerable people around Danone’s communities and their relationship to the company's value chain. Meanwhile, Danone Communities angled its activity around supporting social businesses in low income countries.

Comparing this strategy to rock climbing, Heitmann said different climbers shared the goal of reaching the summit but took different routes. "While all work towards the same vision, they all pursue slightly different approaches, which gives them the opportunity to broaden their impact," she said.

"This isn’t only important to advance societal progress but it can also be of value to the company as it can give them inspiration and input on new, inclusive and sustainable business practices in those various areas... The company that has multiple social investors addressing different challenges also sends a strong message that the company is truly committed to their vision and that each social cause is a priority for them."

Scale

Different corporate social investors and companies could also complement each other to scale a particular social solution.

"Scaling solutions requires different actors along the continuum of capital to work together," said Heitmann. "Through grants, foundations are ideally positioned to provide patient capital in the early stages; as the innovations grow and enter the commercial stage, other impact structures like impact funds might be better positioned to provide them with continued funding.

"Once a proof of concept exists, then companies have the unique opportunity to go the last mile and help these organisations and solutions scale... As in a relay race, the CSIs and their company work at different stages, to offer tailored financial and non-financial support, throughout the different development stages of the investee."

Heitmann quoted the example of Rabobank, the Rabo Foundation and the Rabo Rural Fund, which worked collectively towards supporting farmer co-operatives – but at different stages of maturity. The Rabo Foundation supports early-stage farmer cooperatives in developing countries through low interest credit. Once these co-operatives become too mature for the Foundation, the Rabo Rural Fund can provide them with the next step in financing during their pre-commercial phase, before they become eligible for ‘normal’ financial loans from local partner banks such as Rabobank or other local commercial lenders.

"The strength of the strategy lies in building enabling environments for social innovations or social purpose organisations to grow and scale," said Heitmann. "Multiple corporate social investors and the company can do so by offering different financial instruments at different development stages. At the same time, the strategy is also valuable to companies – by having social investors help develop innovations and solutions up to proof of concept, the company might more easily be able to recognise the business relevance of such impact driven solutions."

Depth

The goal of the ‘depth’ strategy was to work together to deepen the impact on a particular community.

Here, organisations recognise that working alone may just have "scratched the surface" of the impact possible but working together helped corporates and their foundations to dive deeper and address different challenges that communities face. "By developing complementary solutions for the final beneficiaries, such as providing access to capacity, access to capital and access to technologies, it can help them to provide more holistic support to these communities," Heitmann said.

For example, the ING Bank, the ING Foundation and the Debt Assistance Route all worked towards fostering financial support in the Netherlands. While the ING Bank could support its clients and send "early warning signals" to people at risk, the ING Foundation could fund impact-driven solutions and social purpose organisations. Meanwhile, the National Debt Assistance Route had been set up as a cross-sector alliance between ING, other Dutch banks, municipalities and other key stakeholders to offer an additional, sector-wide support for people with problematic debt to manoeuvre out of the situation.

"Working together allows all these organisations to provide more holistic support to people facing financial difficulties in the Netherlands. And it does seem that providing complementary solutions to the same communities allows these organisations to pave the way for more systemic change, as all vehicles here work towards accelerating the development of a particular geographical area," said Heitmann. "This strategy can also be interesting for a company, as it can provide market insights that could also help to build pre-commercial markets, albeit in the long term."

Huge potential

Concluding the presentation, Heitmann argued that multiple corporate social investors and their related companies could work together to broaden the impact they could make on society, to scale the impact of a solution, or to drive deeper impact of particular communities.

"While these strategies are still a novelty, they have huge potential to allow corporate social investors and companies to move towards more holistic impact approaches that really foster the collaboration between different types of actors, different types of capital and different impact strategies," she said. "And it allows them to build on and really leverage each other’s strength towards more impact."

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Top tips to convince corporate leaders to set up a social impact fund

Companies often have a sense that they could make a greater positive impact on society and the planet by enabling different parts of their organisation to collaborate around a common vision. But they don’t always know how to deliver this kind of collaborative approach in practice.

Setting up a corporate social investment fund can offer an effective solution. Technically, new social investment vehicles allows equity and debt finance to complement grant funding already provided by a corporate foundation.

Strategically – as Sophie Faujour, EVPA's corporate initiative lead, explains – they are a hybrid vehicle combining Impact and Business, building bridges between the two; a learning innovation Lab for business.

Therefore not only they can be a ‘tremendous accelerator’ for greater societal impact but also contribute to purpose-led business transformation. 

Watch Sophie’s four top tips for convincing corporate leaders to set up a social impact fund. 

How a ‘crisis of conformity’ is stopping corporate leaders from saving the world

by Tim West Founding Editor

Business leaders are ready to ‘do the right thing’ but need the ‘radical collaboration’ of philanthropists and corporate social investors as their catalysts.

This was the conclusion of a conversation between two leading figures in the movement to change ‘business as usual’ that concluded the 2020 C Summit, held in December by philanthropy networks EVPA and Dafne.

Halla Tómasdóttir is the CEO of The B Team, a group of business and civil society leaders working together ‘to transform business for a better world’. She was speaking with EVPA chair Steven Serneels, who asked: “How can the community of corporate social investors play a role?”

Serneels said it was “easy to get overwhelmed and sometimes even paralysed” by the massive challenges facing society and the planet, from Covid to climate change, to the crisis in inequality and the globalised power of the market.

“How can we move back to hope and action?” he asked. 

Tómasdóttir said business as usual had “left us on a burning planet with a broken social system”. She said the world required a change to more “principled leadership”. This meant having the courage to focus on sustainability, equality and humility.

Serneels suggested many corporate leaders could see the challenges on the horizon but were “locked into” a system that forced them to deliver “in the next quarter, next year, three years”.

He said foundations could apply a “golden nudge” to their corporate parents – but in reality it was a “David and Goliath” battle even “to get a listening ear from the corporate side”.

Tómasdóttir said the philanthropy and corporate social investor (CSI) community “can and must play a critical role in helping to drive this transition”.

“We have examples of businesses leaders doing the right things but who end up losing board support, investor support and in some case losing their jobs,” she said. “I think CSIs and philanthropy [can provide] critical risk capital to help us fund the shift to new mindsets, new business models and new metrics and models.

“We are in this reality of being stuck in the old system knowing very well we need to go to this new system and I think your role in it is to help fund and give support to all of those who are working to shift the system. That’s not something that one organisation or one corporate funder can do. So you can help create what I would call almost like the 'pilot space' for the new ways of working. And if you do that I think leaders everywhere are now so ready to do the right thing but they are stuck in the crisis of conformity in a broken system. And so, help us to create that new reality is my call to action.”

She added that corporate leaders were faced with a “jungle” of demanding new measures and metrics from governments as well as “thousands of not for profits” asking them to do more. Amidst the “alphabet soup” the CSI community could help “fund systemic thinking to innovate and push the system to support the kind of leadership that we all want to do”.

There were three key shifts that needed to take place, Tómasdóttir said: From short term to long term – “from quarter to quarter century”; from financial goals to global goals – the SDGs; and “from shareholder primacy to stakeholder governance”.

“We need a reset,” she said. “We are still working in an economic system from the Friedman era – maximising shareholder wealth. But I think we all know if we want to go from this moment to a future state where we have shared prosperity and a healthy planet, we need to change how we lead, how we do business and we need an economic system that lets us do this.”

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‘Secret agent’ foundations can nudge corporates – but beware wishful thinking

by Laura Joffre Reporter

Enthusiasm about boardrooms driving social change risks going too far and turning into naivety – we need instead to confront the reality of business, says Trafigura Foundation boss Vincent Faber, as he looks back at the buzz of a recent gathering of corporate social investors.

“This time, change is for real.” “This crisis is a chance to make things better, and there will be no going back.” The enthusiastic buzz coming out of December’s C Summit, a gathering of corporate social investors co-organised by EVPA and Dafne earlier this month, was palpable through the Zoom screens that brought attendees together.

But Trafigura Foundation executive director Vincent Faber has heard this before. And while he believes that some change is coming, he warns against falling into a naive illusion that could painfully hit reality.

Faber was asked in 2008 by multinational commodity trading company Trafigura to create the Trafigura Foundation, the company’s philanthropic institution. Prior to this, he worked in the humanitarian and development sector, holding leading positions in international organisations, including head of human resources for the International AIDS Society and general director of Médecins sans Frontières Switzerland.

At the C Summit – of which Trafigura Foundation was a partner – Faber was impressed by the speakers’ energy and willingness to turn the Covid-19 crisis into an opportunity to tackle problems head-on. The urgency that came out of the speeches was something he had “never felt before”, he says.

“Today we feel that the idea of a company’s ability to have a positive impact is taking root,” he says. “Step by step, this concept is becoming mainstream,” he adds, noting that until now, companies’ social and environmental impact was generally seen as negative.

But in Faber’s opinion there is a need to “confront our very positive, and sometimes very idealistic vision, with the reality of business.” He notes that there were few outsiders at the summit – by which he means people from the purely commercial side of business (although the organisers hope to have more such attendees joining this year’s event). If corporate foundations and impact investors remain in a cosy circle, with few dissonant voices, it is risky, he says. 

The foundation boss also worries there’s too much “wishful thinking” in believing that companies have all the solutions. “I remain convinced that companies will never be a philanthropic actor. We [foundations] manage to raise awareness about positive impact, but the way companies work, whichever they are, is still linked to a liberal, capitalist system (and I’m not trying to make a political point here). It’s still about profit, about shareholders’ dividends, and all the goodwill in the world would have to confront these priorities.”

His realism holds fast even with all the talk of reshaping a fairer economy post-Covid, or ‘building back better’. “We will make some progress during this crisis,” he says, “but I think that as soon as Covid is behind us, some things will come back as they were before.” He remembers how, after the 2008 financial crisis, everyone thought the financial world would change for good. In practice, much of it remained the same.

Foundations as pioneers

It’s not that he is disillusioned with the corporate foundation model, though. Faber still believes in philanthropic foundations’ pioneering role, testing solutions that can then be applied company-wide. In this way, they can become a catalyst for change, helping companies to take steps towards making a positive impact.

He gives the example of the foundation he spearheads, which provides long-term funding and expertise to improve socioeconomic conditions of vulnerable communities around the world, focusing on fair and sustainable employment, and clean and safe supply chains. Recently it started working with the Smart Freight Centre, which created a methodology to measure the carbon impact of freight. The ultimate goal of this system is to reduce greenhouse gas emissions by improving logistics and fuel efficiency. “Trafigura, as a commodity trader, is a big user of freight – ships, trains, trucks,” he says. “The foundation partnered with the Smart Freight Centre and ran a pilot scheme, and now, it is in the process of becoming mainstream in the company.”

Foundations often bring a flexibility and a capacity to scout new avenues that their parent companies sometimes lack, he adds. “A thing I noticed is that in the corporate world sometimes people don’t have the tools for that,” he says. “Foundations can be the vehicles through which companies can really put things into motion, almost in an experimental way.”

Clear roles

Faber’s own career has never ventured into the for-profit side of things. Impact investing is a very different tool to philanthropic grantmaking, he says, and performs a different role to that of a typical foundation – although that does not prevent collaboration. “Impact investing works when you have something that’s marketable, but it’s not a panacea: not everything is marketable. Sometimes you need charitable action, and this is where traditional grant-making, with no return expected other than a social one, comes into play.”

Corporations, impact funds and philanthropic organisations each have a function in driving positive change, but there is a need for clarity and transparency about what the role and objective of each is, says Faber. “What are our drivers? What are our values?” he asks. “We have to be honest about what our intentions are.” 

Recognising those intentions also means acknowledging that there are extrinsic constraints for companies in driving positive change from the top down. But that’s not to say they won’t change. 

“Change will essentially be driven by the consumer,” he says. “As consumers, we are starting to change our individual behaviour, and I think companies adapt to a market – if the market pushes them in a certain direction, they will go there.” He sees companies at the heart of an ecosystem where the momentum for change is coming from all directions – consumer, state, banks, financial markets – and exerts pressure on business to follow social and environmental good practice.

As for corporate foundations, they can continue to nudge companies in the right direction from the inside, says Faber. “It’s our work – as social actors ‘embedded’ in the corporation, working in the dark, almost like secret agents – that can make a difference in how companies evolve. But we shouldn't be naive and think that companies will solve all social problems.”

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