Specialreport:communityinvestment Thevalue ofgiving · 2012-07-18 · Good Business, a corporate ... Research indicates there are three lessons for companies that want to ensure giving

The valueof givingEngaging employees and communities

Special report: community investment

Report content:

30 Introduction fromMicrosoft

31 Why invest?32 Company lessons33 Getting everyone involved35 Making it effective37 Worthwhile efforts38 Spreading the word39 Measuring success

Sponsored by

Sponsor’s introduction

How Microsoft approaches community investment

30 Special report: community investment Ethical Corporation • September 2008

AtMicrosoft we have a proud tradition of community invest-ment that has run through the business since its inception.

The past five years have seen a considerable evolution in ourstrategy with our community investment activity now focusingvery specifically on core areas where we know information and

communications technology skills and software can make adifference. This strategy has given us a clear direction combinedwith the flexibility needed to run relevant programmes in eachof our countries of operation.Microsoft is founded on the belief that information tech-

nology has fantastic potential – unlimited potential, even – tochange the way people work and communicate. But we alsorecognise that to enjoy these benefits you need to have access tothis technology in the first place, and have the skills and confi-dence to get the most out of it. Our community investmentprogrammes therefore centre on promoting digital inclusion

through skills training, helping people access affordable tech-nology and building up the technology capacity of NGOs. Wedo this through financial grants, software donations, curriculumdonations and employee volunteering.As a software company, we know that our corporate assets

and competencies require other inputs. We thereforework through partnerships to bring the specificskills, assets and talents of NGOs and other organi-sations together in order to make real progress.Through collaboration, the benefits of technologytraining extend far beyond the individual who

attends courses – they improve the social andeconomic opportunities of entire families, busi-nesses and communities to foster true economicempowerment.We are confident that our focus is the right one

for us as a company. However, this does not meanthat community investment is without challengesfor us. Establishing the best ways to measure ourimpact, and to communicate that both internallyand externally, are areas where we still have a lot tolearn.It is these challenges that prompted our interest

in a piece of research to draw out best practices from someleading companies from a number of different industries.We are delighted to sponsor this report and hope that its

insights will prove useful and interesting for those involved incommunity investment in any capacity. �

Sylvie LaffargeDirector of community affairsMicrosoft EMEA

Research methodology

This study was conducted between May and July 2008 by the research team atGood Business, a corporate responsibility consultancy based in London

(www.goodbusiness.co.uk).The findings and conclusions in this report are based on research with seven

companies with leading community investment programmes. This researchcomprised detailed interviews with the participants as well as reviewing other

data sources. The research was supplemented with a more general examinationof community investment trends across Europe.

With reagrd to terminologies, companies use very different labels to refer totheir community activity. For simplicity we refer throughout this report to“community investment”, although this is not the phrase used by some of thecompanies that took part. �

Information technology hasunlimited potential to change theway people work and communicate

Foreword

Community investment still mattersCorporate responsibility today is about much more than old-style communityinvestment, but companies should not overlook the benefits of well-designedgiving programmes, says Giles Gibbons, CEO, Good Business

31Ethical Corporation • September 2008 Special report: community investment

Asmore andmore companies embrace theneed to think through their impact on

society and the environment in a roundedand strategic way, corporate responsibilityhas moved ever more mainstream. Mostmajor businesses now have a dedicatedcorporate responsibility department with aclear remit to help the organisation under-stand and address the social andenvironmental issues it faces, and turn someof these challenges into opportunities.Corporate responsibility commitments,

initiatives and actions often feature instandard advertising – unsurprising giventhat a company’s ecological and ethicalcredentials are an increasingly importantpart of the decision-making mix formany consumers. We begin to see explicitdiscussion of the discipline moving intothe business, and sometimes the main-stream, press. Even if the terminology isnot used, the subject matter is regularlyfront-page news.When meeting companies for the first

time, I often find we can bypass the philo-sophical debate about responsible businessand get on immediately to working out howto do it most effectively. In place of persua-sion, we have planning for action.And, most importantly of all, the action

we are planning is no longer a feel-goodactivity for the company, designed to act asan exercise in moral offsetting to counteractany negative feelings about what it actuallydoes. Quite the opposite. It is directly aboutwhat the company does as a business, howit carries out its core services and opera-

tions, and the impact these have on theworld.This is the key evolution that has taken

place over the last few years. These areexciting developments and ones of whichwe should be proud. But there is a dangerthat we have left a casualty by the wayside:community investment.

Outer coreCommunity investment is best defined inour view as those activities that companiesundertake beyond their core commercialservices to benefit the communities inwhich they operate. This could entail manydifferent kinds of activities, but commonlyinvolves a company giving its resources inthe form of time, money and products to asocial or environmental cause.This activity was once seen as what

corporate responsibility was all about. Theonly non-financial report a company wouldpublishwould be a glossy brochure outliningits “good works”. Now we find that the vastmajority of companies publish a comprehen-sive report that details the ways in which itstrives to be a thoroughly responsiblebusiness. And the community activity isadded on the end, almost as an aside.Perhaps unsurprisingly, corporate

responsibility experts note a growing reluc-tance on the part of some companies toengage in community investment. Businessin the Community’s community impactdirector, Catherine Sermon, says: “Certainlysome companies have stagnated in theirapproach to community investment

because they feel they should now moveonto bigger things.”Mark Goyder, founder of business think-

tank Tomorrow’s Company, believes thatthe centre of gravity is shifting away fromcommunity investment towards the viewthat a business needs to redefine its wholeproduct and service strategy so that it acts tomeet the long-term needs of society. Thecurrent climate has prompted businesses tolook at their community investment morecritically, he says. While this is a positivedevelopment, he detects “a pressure insome places to desist from some communityinvestment”.Community investment is in danger of

being marginalised as an outmoded form ofcorporate behaviour. This would be aserious mistake.

Real valueCommunity investment has a legitimateand important role within responsiblebusiness, bringing the unique competenciesof a company to bear on issues affecting thecommunity in which it operates. It may notbe the place for the company to address thecore issues associated with its business

(although it can and often does play a role inan overall programme of action). But the factthat it is slightlymore detacheddoes notmakeit a poor relation of core responsible businesspractice. It just makes it a bit different.So what we need is a vision of commu-

nity investment that recognises its rightfulplace and its particular strengths andvalues, rather than denigrating it simplybecause it cannot fulfil the whole job ofcorporate responsibility.We have found an increasing level of

sophistication in the way companies areplanning and delivering community invest-ment. The benefits of this are clear. Ascompanies become better at directing theircommunity investment strategically andimplementing it effectively they not onlyget more successful at achieving whateverbusiness goals they are seeking to fulfil.They also start to make a real impact on theissues they have chosen to tackle. Which isgood news for everyone. �

Companies have stagnatedin their approach tocommunity investmentbecause they feel they shouldmove onto bigger things


This report gives a qualitative overview ofcommunity investment by looking at

some examples of how it is being practisedin companies today. It finds that there is nosingle model, or set of guidelines, for doingcommunity investment well. Rather,companies direct their approach so that itfits in with their own particular culture andoverall strategy for responsible business.This means companies use employees, part-nerships and communications in verydifferent ways in their community invest-ment work, as this report details.Yet there are three overall themes that

characterise the best community invest-ment, as demonstrated by the companiessurveyed for this report, whatever theprofile of the business.• Companies focus on the effectiveness ofcommunity investment, rather than its size.

• Community investment feeds into widercorporate responsibility strategy; it doesnot replace it.

• Companies understand the businessreasons for involvement in communityinvestment.

Quality not quantityThe best companies focus less on the scale oftheir investment and more on how they canmake these investments in smarter, moreeffective ways. IBM’s corporate citizenship

and corporate affairs executive for Europe,the Middle East and Africa Celia Mooresays: “If you go back 15 years it was acontest of who was giving the most. Nowit’s about the effectiveness of what you do.”At Microsoft, community investment

work is increasingly focusing on how best toimprove the employability – or workplaceIT skills – of programme participants. The

company does this by supportingprogrammes with direct links to workforcedevelopment.The shift to smarter community invest-

ment is evident in the increasing importanceplaced on measurement. Many companiessurveyed here use the London Benchmarkingsystem, or employ external researchers tohelp them track the impact of their activity.The shift is also clear in the way compa-

nies are recognised for communityinvestment work. Business in the Commu-nity, the UK membership group thatpromotes responsible business, recentlydecided to stop running its PerCentStandard scheme that, since 1986, had

recognised companies that invested 1% ofpre-tax profits in their communities. Its newCommunity Mark assesses companies oncriteria such as how well they are workingin partnerships, whether they are meas-uring and evaluating their activity, andwhether they are focusing on the socialissues most relevant to them as a business.BITC’s Catherine Sermon says: “We

want companies to be clear about what theywant to achieve. So it’s no longer aboutsaying ‘I want to give about a millionpounds’ but rather ‘I want to make a differ-ence to this particular cause and these aremy objectives’.”

Business caseIn the most forward-thinking companies,community investment is strategicallyplanned and delivered as a tool to support amuch wider responsible business strategy.Companies clearly understand that commu-nity investment cannot replace managingtheir relationships with suppliers, or theirenvironmental impact.While not all the companies we looked at

have a separate corporate responsibilityfunction, none is making the mistake ofconfusing this function with communityinvestment. This clarity of purpose enablescompanies to use community investment asan effective business tool.The best companies understand the

importance of a clear business case forcommunity investment. The case variesaccording to the nature of the business andits particular challenges. For an extractivecompany such as BP, community invest-ment forms a key part of its ability tooperate in a given area. Providing trainingand employment to local people andsuppliers are important components of BP’sability to be successful.For consumer-driven industries, the

business case for community investmenttends to centre on reputation. For Procter &Gamble, its work on building schools, vacci-nations or water purification speaks in verypositive ways to its consumers about thevalues of the company and its brands.For Royal Bank of Scotland, with a strong

tradition of looking after employees, thepotential for community investment toattract, retain and develop staff is a largepart of the business case.A clear business case is essential because

it enables a company to justify spending toshareholders. It also ensures all communityinvestment has direction, since it is aimedtowards specific business objectives. �

Research overview

Give smarterResearch indicates there are three lessons for companies that want to ensuregiving is effective and strategic, and adds value to their business

Focus less on the scale ofinvestment and more onmaking these investmentsin more effective ways

Now drinking pure water thanks to P&G


Akey strategic question for communityinvestment in any company is how this

activity should be structured and managed.This is particularly relevant in multinationalcompanies, where different business envi-ronments and social contexts createchallenges.Companies can structure their commu-

nity investment in one of two ways. Theycan let the focus for community investmentcome from employees on the ground orfrom the top of the company, either globallyor locally. While companies covered by theresearch in this report tend to emphasiseone of these approaches, none relies on oneexclusively; rather, they employ a mixture ofapproaches.A number of the companies surveyed set

the direction of their community invest-ment centrally. This provides a structure forprogrammes throughout the differentcountries of a business’s operation.

Business relevantAt IBM, community investment comprises asmall number of large scale globalprogrammes applying the company’s tech-nology skills to social needs that arerelevant to the business, such as education,healthcare research and environmentalmanagement. The approach reflects astrong belief that IBM can have more of animpact through large scale activity thansmaller scale initiatives developed and runat a country level. Celia Moore, IBM’scorporate citizenship and corporate affairsexecutive, says: “Programmes can beadapted to the local environment as they

are implemented. Small one-off grants areunlikely to be strategic and deliver long-term change”.Microsoft and Procter & Gamble illus-

trate how clear strategic priorities at a globallevel can be implemented at a local level invery different ways, reflecting the needs ofindividual markets.Microsoft has over the past five years

sharpened the focus of community invest-ment towards information andcommunication technology skills. Theprimary focus of all community investmenthas, since 2003, been on supporting under-served communities to access technology

and skills training through a programmecalled Unlimited Potential. The aim is topromote social and economic opportunityfor people yet to experience the benefits oftechnology. Groups served range from thedisabled to refugees, but the objective isconsistent across all groups and markets.Sylvie Laffarge, Microsoft community

affairs director for Europe, the Middle Eastand Africa, says: “Broad parameters and biggoals are set out, but then the actualprogramme design and much of thedecision making comes from the field.‘Quite decentralised’ is how I’d characteriseour structure and implementation. Thisallows adaptation appropriate to localeconomic and social developmentagendas.”P&G directs community investment

through its Live, Learn and Thrive globalframework, which offers a range ofprogrammes based on hygiene, educationand life skills for children in need. Countrieshave the flexibility to run their ownprogrammes based on this platform, or tosupport global programmes. For example,the successful Pampers partnership withUnicef, providing tetanus vaccines towomen and babies in the developing world,began as a Latin America programme thathas since expanded to many other countries.This balanced approach gives a company

a strong central message about the purposeof its community investment while allowingindividual countries to shape their activityin the most appropriate way.Some companies devolve decision

Community investment strategy

From the top, and the bottomSuccessful global companies are involving all employees from senior managementdown to shape their community investment strategies

Google: freedom and innovation in community investment

Heritage • Founded 10 years ago with a strong mission of enabling people through access toinformation. The separate entity Google.org was formed in 2004.

Community investment • No formal structure for community investment or corporate responsibility.structure • For-profit Google.org makes social investments and encompasses the grant-making

Google Foundation.• Extensive ad hoc activity is generated by individual staff and supported by the company

on a case-by-case basis.Issues of focus • No specified issue focus. Most activity uses Google’s products and competencies for

societal good, eg using Google Earth to expose illegal logging in the Amazon.Spend • $85m in grants and investments made by Google.org since it was founded in 2004. Ad

hoc contributions not measured.Employee volunteering • No formalised policies, but many volunteer and Google is flexible about allowing them

time to pursue those interests.Leading activity • Google.org is a “hybrid philanthropy” for-profit organisation that gives grants and

makes investments in a range of projects related to the use of technology in addressingglobal challenges. Its purpose is to provide seed investment and leverage Google’s tech-nology expertise. Diverse initiatives include RE<C, a drive to produce renewable energythat is cheaper than coal, promoting the use of plug-in car technology, and supportingsmall and medium-sized enterprises in the developing world.


employee. Google’s European director ofcommunications D-J Collins explains: “Ican’t give you an interview with the head ofcommunity investment because they don’texist.” Employees’ individual passions andinterests are all candidates for investmentby the company.This strategy rests on a belief that the

most important thing a company can do isto allow employees to innovate and experi-ment. This closely reflects the philosophy ofGoogle as an organisation. All “Googlers”are encouraged to spend 20% of theirworking time on projects of their ownchoosing. As a model it relies on highlymotivated, socially-interested employees,and Google’s recruitment process is specifi-cally designed to select such people.

Reaching outThis policy has enabled Google employeesto get involved in a range of disparateactivity, from using online mapping toolGoogle Earth to campaign against theconstruction of a dam in California, toworking with Beatbullying in the UK usingvideo-sharing website YouTube to reachyoung people.At RBS, although community investment

is centrally directed, there is a strongcommitment to enabling employees to getinvolved in whichever causes interest themthe most. “We firmly believe that our staff

are better placed to identify local causes inthe places where we operate,” Moir says.Employees can invest time in local causes oftheir choosing and apply for CommunityCashback awards – grants donated to thecharities they are involved with – in recog-nition of their work. This combination ofsupporting employee interests whileaddressing core business issues throughcommunity investment is being rolled outacross the new parts of the businessacquired through last year’s acquisition ofABN Amro.Whatever the scale of a company’s

community investment activity, creating theright structure is crucial. As these examplesdemonstrate, this means finding a structurethat fits with the company’s businessmodel, culture and values. �

IBM: a global approach for a global business

Heritage • Founded in 1911, IBM has a history of giving cash and technology. Its community invest-ment developed in the early 1990s with the launch of more formal, global programmesaligned with the business strategy.

Community investment • Core offering of about 15 global programmes, implemented by operating countriesstructure according to local context.

• On Demand Community Grants is the employee scheme that donates cash or technologyto causes for which employees volunteer.

Issues of focus • Central commitment to using ICT to transform education. Also employment, arts andculture, environment and communities in need.

Spend • $166m in cash, equipment and services in 2007.Employee volunteering • Global volunteering scheme, On Demand Community, is a website that helps employees

take their skills and to support their local community.• The Corporate Service Corps, launched in 2007, offers small teams of employees the

chance to volunteer in an emerging market for one month, learning leadership skills atthe local level.

Leading activity • IBM’s approach to community investment is characterised by global IT programmes.Raising student achievement in schools is a major focus through programmes for earlylearning, science and engineering, language and literacy, and change management.These are all supported by volunteering.

making to a country level. At BP, the indi-vidual businesses make strategic socialinvestments in line with local priorities andconditions. BP corporate responsibilitydirector Sheldon Daniel says: “We operatein such a diverse set of places, we’verealised that our businesses need to haveflexibility to respond to local level needs inthe way they conduct their communityinvestment.” Major areas of involvement

usually include education, enterprise devel-opment and governance.Microsoft sees emerging markets as vital

for its future growth. Its community invest-ment is therefore focused on ensuring thattechnology reaches everyone in ways thatserve their economic and social well-being.The company’s goal is to bring the benefitsof technology to the next one billion peopleworldwide in underserved communitiesby 2015.IBM wants to link its community invest-

ment work to its focus on innovation.Its global community programmes involvepartnering both internally with its researchdivision and externally with otherpartners. For example the WorldCommunity Grid programme harnessesIBM expertise, working with research insti-tutes in areas such as cancer, HIV/Aids andmuscular dystrophy therapies, and inclimate modelling.The Royal Bank of Scotland ties its

community investment into its corebusiness by focusing on financial inclusionand financial capability. “In terms of achoice it’s bang aligned with what we do asa consumer finance company,” saysStephen Moir, head of community invest-ment. RBS’s long-standing Money Senseprogramme provides resources for lessonsin schools on managing money and theSchool Bank scheme gives young peopleexperience of having a bank account.The focus of community investment at

Google is not determined by any singleteam or department, but by every

Moving away from corporatefoundations

Corporate foundations have traditionally been seen asa good way of ring-fencing funds for communityinvestment. They can also help give continuity ofpurpose to a company’s giving, and lend themselvesto longer-term partnerships with charities.While Vodafone is a clear exception, companies

surveyed for this study are moving away from struc-turing community investment through foundations.RBS took the decision to close the operations of ABN’sfoundation because it was not seen as aligned withRBS’s more integrated approach.Where foundations do exist, they are often just a

means of channelling funds rather than a delivery toolfor community investment. At BP, for example, thecompany uses its foundation, in part, to supportresponses to humanitarian aid in the event of naturaldisasters and other events, particularly in locationsclose to where it operates.Increasingly, foundations are seen to be more

appropriate as a philanthropic rather than communityinvestment tool because they involve a formal separa-tion from the business.

Whatever the scale of acompany’s communityinvestment activity, creatingthe right structure is crucial

Partnerships

Working better togetherCompanies are finding that partnering with NGOs, governments and even theircompetitors can improve the effectiveness of their community spending worldwide


proposal to us. We think it’s a good way ofcreating a deeper learning experience.”Companies are increasingly building

partnerships for the long term. There arealso business benefits to developing longer-term relationships, given how long it cantake to build internal and external aware-ness of such partnerships. Changingpartners annually is not an effective way tosend a clear message about what you aredoing.The companies surveyed for this study

tend to establish partnerships for at leastthree years. Some go much further. Royal

Companies will always draw heavily oninternal expertise to deliver community

investment programmes. But in someinstances there are clear advantages to part-nering with other organisations. Formingpartnerships goes far beyond simply spon-soring a charity; it involves the creation ofnew activities to which the company cancontribute and add value.In the past, companies would support a

single global charity, such as Unicef or Savethe Children, through large regular dona-tions, forming the central pillar of theircommunity investment activity.As community investment aligns itself

more closely with corporate objectives andcompanies become clearer about what theywish to achieve from their communityinvestment, this model is looking outdated.First, a company chooses an issue. Then

it builds appropriate partnerships. Forcompanies with global presence, singlecharity partnerships often do not makesense from a practical perspective. BPcorporate responsibility director SheldonDaniel explains: “For a multinational with adiverse geographic portfolio, it’s hard tohave global partnerships which would beable to meet needs in such a variety of oper-ating environments.”In some instances, a company will choose

to work with multiple charity partners in asingle region. Social issues are often bestaddressed through collaboration, ratherthan competition. Vodafone UK Foundationhead Sarah Shillito says: “Now we say tocharities you have to choose who else you’regoing to work with when you make a

Bank of Scotland head of communityinvestment Stephen Moir describes thepartnerships formed to deliver the bank’sfinancial inclusion programmes as “genera-tional commitments”. He says: “Ourexperience has shown that things like skillstransfer and building the capacity of anorganisation take much longer than threeyears. We will support them for an undeter-mined period, until such a point as it stopsbeing sensible and we undertake anotherstrategic review.”Microsoft similarly has no set rules about

the lifespan of partnerships and many havecontinued for more than 10 years. Ensuringthat the objectives of a partnership stayfresh and relevant, whatever its lifespan, ismost important, the company says.

Public sector partnershipsTackling social issues through communityinvestment increasingly means partneringwith public sector organisations as well astraditional charity partners. These relation-ships reflect a growing willingness fromboth governments and companies to worktogether to achieve specific aims.Working with a public or governmental

body lends extra credibility to a company’sactivity and helps it develop closer links withother organisations. It can also be more effi-cient, as it ensures companies are notduplicatingwork being done by governments.For its Children’s Safe Drinking Water

initiative, Procter & Gamble has workedwith the US Centers for Disease Control and

Vodafone: flagship NGO partnerships

Heritage • The Vodafone Group Charitable Trust was set up in 1992, two years after Vodafone wasfounded. In 2002, this became the Vodafone UK Foundation, and the Vodafone GroupFoundation was established, which now oversees 24 local country foundations.

Community investment • Vodafone Group Foundation supports 24 local country foundations and socialstructure investment programmes run by the operating companies, and also funds selected

global initiatives directly.• Local foundations are funded by operating companies and the group foundation.

Issues of focus • Focus varies by country according to heritage and local priorities. For example, the UKfoundation focuses on exclusion among 16-25-year-olds, while the Spanish foundationresearches the role of ICT in society.

Spend • £44.9m in group donations of money, time and materials in 2007-08.Employee volunteering • Policies vary across operating companies. In the UK, employees are entitled to 24 hours

of paid volunteering time annually.Leading activity • Vodafone works extensively in partnerships to deliver its community investment. The

group’s flagship programme is its Global Partnership for Emergency Communications,with the UN World Food Programme and the UN Foundation. This was launched in 2007to explore the use of ICT in emergency response programmes. In the UK, the founda-tion’s work focuses on structured, three-year NGO partnerships. The present flagshippartnership, focused on social inclusion among 16-25-year-olds, is a collaboration withthe Foyer Federation, Rathbone, Skill and Youthnet.


Prevention to develop low-cost technologyfor water purification sachets for use indeveloping countries. It now works todeliver this technology with a coalition ofcharities, with substantial support from theUS Agency for International Development.Both IBM and Microsoft run a number of

global programmes to bring IT skills tochildren. The companies’ primary partner-ships are with the ministry of education orregional governments in each country. BPoften works with government agencies toencourage enterprise – for example, collabo-rating with the UN DevelopmentProgramme to train local people inIndonesia, home of its Tangguh gas project.

Rivals togetherOne of the most interesting developmentsin community investment is the growingnumber of business-to-business partner-ships that are being formed to delivercommunity investment goals.Microsoft has always been well aware of

the limitations of what it can provide, andhas a long history of encouraging itspartners and other businesses to work withit on community initiatives. “We know verywell that we’re a software company andthat we bring certain competencies to thetable, but not all of them,” says SylvieLaffarge, community affairs director forEurope, the Middle East and Africa.A good illustration is Microsoft’s work in

Europe with the Employability Alliance.This is a public-private initiative by

Microsoft with partners including CiscoSystems, Randstad and State Street. Thealliance’s aim is to provide 20 million Euro-peans with access to technology, content,certification and training in computer tech-nology and other skills by 2010.Microsoft also partners other businesses

to donate various products. TechSoup is anorganisation that provides a one-stop-shopfor non-profit groups looking for tech-nology donations, and gives businesses aplatform for making donations. This ismuchmore efficient than individual compa-

nies running their own programmes andnon-profits and charities applying to eachone for donations. Microsoft has beeninstrumental in setting up and supportingTechSoup’s international expansionthrough local NGO partners in collabora-tion with Microsoft subsidiaries and otherindustry partners.Technology is one of the more obvious

candidates for this kind of partnership,since each company will be able to providepart of the solution: software, hardware ortraining skills. But this is not the onlyindustry where partnerships of this type areemerging. Very different companies mayfind synergies in their areas of interest.Vodafone UK is working on developing a

mentoring project for former prisoners,which involves several other high profilecompanies from different industries. Shillitosays: “It’s a really important message toconvey if we’re trying to encourage chari-ties to work together with their competitors– we should be doing the same thing.”Companies acknowledge that this devel-

opment brings a number of challenges. Itcan be hard to find initiatives that fit equallywell with the objectives of different busi-nesses. There may also be concerns aboutlosing distinctiveness. When reputation is akey driver of community investment,companies may be unwilling to risk whatcould be a key differentiator for their brand.

Client collaborationWorking with suppliers and clients isanother option for creating business-to-business partnerships. This has been a routefor IBM, which found that its clients wereincreasingly looking for opportunities tocollaborate on community investmentprogrammes. An example is KidSmart, anIBM programme that makes computersloaded with educational software availableto preschool children. IBM has run jointteam events with clients to install thecomputers at local kindergartens.Microsoft regularly invites its business

partners to provide inputs appropriate to aparticular initiative. For example in workingwith Junior Achievement, a youth skillsorganisation in Latvia, it was able to engagea local web-hosting firm to host a webservices portal for the organisation.Some of the most exciting developments

in community investment are happening inthis area of partnerships as varied expertiseis brought together in new ways. Theexamples here are set to be replicated ascompanies see the benefits of deliveringtheir community investment plans throughpartnerships with the non-profit, public andprivate sectors. �

Microsoft: extending access to IT

Heritage • Founded in 1975. Formal giving programmes since 1983 stemming from Gates familycommunity efforts. Major international expansion in early 1990s and first worldwideinitiative launched in 2003.

Community investment • Community investment forms part of the broader corporate citizenship programme,structure Unlimited Potential. Broad group-wide goals but activity in practice is largely decentralised.Issues of focus • Extending the reach of ICT by providing skills to the disadvantaged.Spend • $68m in cash and $331m in software donated by Microsoft Community Affairs to non-

profit groups worldwide in 2007.• Since 1983, Microsoft and its employees have given more than $2.9bn in cash, services

and software to non-profits around the world.Employee volunteering • Employees are entitled to three days of paid time annually to volunteer in their

communities.• Beyond Unlimited Potential, employees are engaged through giving and volunteering

programmes, and in Microsoft’s disaster relief efforts.Leading activity • The Unlimited Potential Community Technology Skills Programme is a cornerstone of the

company’s community investment efforts, providing ICT training and tools that foster socialand economic opportunities. Microsoft works with community partners and providesgrants, software, technical expertise and specialised teaching. The programme supports40,000 community technology centres in cooperation with more than 1,000 communitypartners in 102 countries, and has reached 117 million people to date.

Working with a publicbody lends extra credibilityto a company’s activity

Focus on exclusion

Volunteering in the community used tobe characterised by employees getting

involved in hands-on projects – frompainting schools to planting trees – often forteambuilding purposes. Now employeesare increasingly encouraged to volunteer inways that make the best use of their coreskills.This is a different model of volunteering.

The emphasis is on using the skillsemployees hone through their everydaywork rather than seeing volunteering as anopportunity to do something outside theircore competencies.Convincing employees that their

everyday skills are the most useful to thecharitable sector can be a challenge.Vodafone UK Foundation head SarahShillito says: “We’re trying to encourage ouremployees to understand that going outand teaching someone how to create anExcel spreadsheet is incredibly useful. Itoften doesn’t occur to them that this is anasset that they have to offer.”Many of the companies surveyed for this

report go to some pains to ensureemployees’ skills are used where they aremost valuable. In the wake of HurricaneKatrina in 2005, a small team of specialisedMicrosoft employees worked on developing

a website that consolidated data on missingpeople and evacuees to help families findand register missing relatives. This effortbuilt on similar work done in response to therefugee crisis in Kosovo in the late 1990s andagain after the 9/11 terrorist attacks in 2001.Microsoft allows employees to take up to

three days of paid leave for volunteering.The company has developed an “opportu-nitymatching tool” where employees can log

their skills and interests and NGOs can postskill-specific opportunities for volunteering.At IBM, staff and retirees can use the On

Demand Community website to access thetools they need to support their chosenschool or community organisation. Usersare invited to log their volunteer hours andapply for cash or equipment grants forthose groups.At Google, engineers are showing NGOs

and other groups how to use Google Earth,the company’s mapping and satelliteimagery tool, to raise awareness ofcampaign issues. For example, a number of

Volunteering

Returns on human capitalEmployees want to volunteer in their communities and companies can help maketheir efforts worthwhile


employees have trained members of theSuri tribe in Brazil to use Google Earth tohighlight illegal logging in their territoriesin the Amazon rainforest.For senior employees, leadership skills

may be their greatest asset. Microsoft USallows its senior staff to take part in theLoaned Executive Program run by UnitedWay, a US coalition of charitable groups.Through the programme, Microsoft andother companies loan some of their bestexecutives for four months at a time to helpUnited Way in its fundraising work withlocal communities.

Development toolCompanies increasingly see employeeengagement in community investmentas an important component of personaldevelopment.The impact of voluntary work on

employees in terms of motivation andretention, as well as attracting new recruits,has been well recognised by companies for

some time. Research consistently showsthat new graduates want to work for busi-nesses that have values they believe in, andthey may even be willing to accept less payfor the privilege. A BT survey in 2007 foundthat more than a third of the young profes-sional respondents said working for acaring and responsible employer was moreimportant to them than salary.While these factors remain important,

companies are now starting to see commu-nity investment as a tool that can provideopportunities for employee development,as well as assisting with recruitment andretention.IBM’s newly launched Corporate Service

Corps brings together teams of eight to 10employees to spend a month working on aproject with a small business or NGO in anemerging market, with a view to buildingemployee leadership skills and knowledge

Royal Bank of Scotland: employees at the heart

Heritage • Founded in 1727. RBS’s strategic approach to community investment, focusing on financialinclusion, developed in the early 1990s with the education programme Face-to-Facewith Finance (now MoneySense). RBS’s takeover of NatWest in 2001 signalled the launchof formal programmes around matched giving and employee volunteering.

Community investment • Sits within group communications.structure • Employee-driven approach aims to support staff in whatever volunteering they wish to

get involved with.Issues of focus • Financial inclusion and capability and developing enterprise are the two global themes

at the heart of most community investment activity.Spend • £38.6m in cash support in 2007.Employee volunteering • Strongly supported through Community Cashback Awards; employees can apply for

grants to their chosen charities that they are involved in.• An estimated 20% of employees took part in community projects in 2007; 173,996

business hours were given for volunteering.Leading activity • MoneySense is RBS’s financial education programme that has been running in UK

schools since 1994. The modules are designed to introduce students to basic financialprinciples and products. RBS has now launched MoneySense for adults. The recentlyrelaunched MoneySense website includes a budget calculator and debt advice. Itscontent has been reviewed by the Citizens Advice Bureau.

New graduates want towork for businesses thathave values they believe in

Even just a bit


for doing business in these markets. CeliaMoore, corporate citizenship and corporateaffairs executive for Europe, the Middle Eastand Africa, says: “The more we become aglobally integrated business the moreimportant it is that our people are aware ofcultural differences and societal issues.”Getting involved in a community invest-

ment programme can give employees amore global, rounded outlook, which hasbenefits for their interaction with clients. AtMicrosoft, the Human Resources LeadershipDevelopment programme allows teams ofMicrosoft executives to take on communitychallenges posed by three NGOs. Thisactivity is seen as a way of developingbusiness skills such as strategic planning andproblem solving in a new setting.At a number of companies, community

investment teams are working closely withhuman resources to formally recognise thedevelopment potential that volunteeringcan offer. At Royal Bank of Scotland, volun-teering is tied to the group’s personaldevelopment competency programme.Vodafone UK’s Breakthrough employee

development programme includes amodule on how volunteering can help todeliver against performance drivers. Thiskind of integration with human resourcesshows employees that their companyvalues volunteering highly, and thereforeprovides a much greater incentive foremployees to get involved.As organisations start to use employees

in smarter ways that benefit both them asindividuals and the projects they work on,the case for embedding volunteeringactivity into an organisation is becomingmuch clearer. �

The role of community investment incorporate communications is evolving.

Some companies are wary of talkingpublicly about their community investmentactivity, preferring to focus on their corebusiness activities. Google’s director ofcommunications, D-J Collins, says: “I preferto spend my time talking to the press aboutthe benefits of search, YouTube, Googlemaps and the rest.”At BP there is a definite focus on commu-

nicating that its responsibility is much morethan community investment. “Rather it isabout all the things we do in our operationsthat contribute to long term sustainability ofthe business and the society and environ-ment we operate in,” says corporateresponsibility director Sheldon Daniel.Other companies continue to use

community investment as a basis forcommunication, but are becoming morefocused and strategic in the way they dothis. Companies surveyed for this reportagreed that when talking about communitywork, it is best to focus on specific audi-ences, and to do more than simply reportwhat a company is doing.Community investment provides a

valuable talking point when engaging withspecialist stakeholders such as non-govern-mental organisations and governments,

companies say. Microsoft, for example,works with governments at both nationaland European levels on worker skills.Community affairs director for EMEA SylvieLaffarge says: “We work closely withgovernment affairs colleagues, givingthem examples of where we’ve affectedemployability in a particular community,

Time off for good behaviour

Companies differ in whether and to what extentthey allow employees to take paid time off work forvolunteering. In some cases there is an entitlement toa fixed number of days a year. However, this tends tobe linked to activities chosen and organised byemployees themselves. Taking part in a corporatevolunteering programme will be in addition to this.Set allowances for volunteering are less popular in

companies where community investment is verymuch driven by employees. At RBS and Google, timeentitlements are felt to be unnecessary because theculture of the organisation is such that employeesfeel able to negotiate the time they need with linemanagers on a more ad hoc basis. For othercompanies, a fixed number of days provides a goodway of incentivising employees to get involved.

Procter & Gamble: living, learning and thriving

Heritage • Founded in 1837. Tradition of philanthropy and employee community involvementactivities. First group-wide initiative, Live, Learn and Thrive, established in 2005.

Community investment • Activities brought together under the Live, Learn and Thrive single corporate cause instructure 2005. Includes global programmes and brand-led cause-related marketing campaigns.

• Country-level volunteer support, local partnerships and donations, largely supportedby and aligned with Live, Learn and Thrive.

Issues of focus • Improving the lives of children up to 13, through health (Live), education (Learn) andskills development (Thrive).

Spend • $125m worldwide in 2006-07 (cash and products).Employee volunteering • Global volunteer support programme encourages employee community involvement.

Policies vary regionally. In the UK and Ireland, the employees’ charities fund matchesemployee donations.

Leading activity • Live, Learn and Thrive programmes around the world aim to benefit more than 250million children by 2012.

• Also focuses on providing safe drinking water – more than 1bn litres to date.• Live, Learn and Thrive programmes vary by region. In countries including China, Costa

Rica and India, signature programmes give children access to education; in others,including the US, Saudi Arabia and Sweden, programmes help build skills for life.

Do the job, earn the credit

Communicating community investment

Finding the right wordsCompanies should be careful who they tell about their community investment work,and how they present their good deeds


to help support their agenda.”Royal Bank of Scotland’s head of

community investment, Stephen Moir,describes the bank’s work on financialinclusion as “a great stakeholder-influ-encing tool, especially when thegovernment agenda is now more than everabout equipping people with the skills tomanage their money”.Despite Google’s reluctance to talk about

community investment, it acknowledges itsvalue when building relationships withparticular audiences. If an NGO isconcerned about the use of YouTube forbullying, Google is able to respond withreference to its work with Beatbullying.While BP may be concentrating on

communicating its core business activitiesrather than its community investmentinitiatives, its work on human rights, trans-parency and stimulating enterprise helpsbuild relationships with an often hostileNGO sector.

Engage consumersIf community investment communicationsare targeting consumers, this requires inno-vation and creative thinking.Straightforward reporting of a company’sactivities is unlikely to engage the media orto have much impact on consumers and

can, in some instances, be negatively inter-preted as cynical PR.One solution is to generate interesting

content rather than simply talking about theactivities a company is engaged in.Vodafone is currently working to learn whysome methods of connecting with youngpeople aged 16-25 succeed where othersfail. “In a way we’re creating our own policy

stance by some of the work we’ve funded,so that ideally, in the same way that peopleturn to Nationwide for what’s happening inthe housing market, they might eventuallyturn to us to find out what the currentissues are around young people,” explainsSarah Shillito, head of the Vodafone UKFoundation.Effective communications should be

fully integrated into the community invest-ment activity itself. This means thatcommunications forms part of the activityrather than being added as an afterthought.This is worlds away from the traditional

model of telling consumers what you’vedone, and expecting plaudits for it.This strategy is evident in Procter &

Gamble’s One Pack One Vaccine Pampersinitiative, which is part of its relationshipwith Unicef. For every specially markedpack of nappies sold, P&G promises todonate the cost of a tetanus vaccine for awoman and her newborn children toUnicef. This programme has alreadyprovided 40m vaccines and this is expectedto reach 70m by the end of 2008. Because itdirectly involves consumers, they immedi-ately feel a strong connection to the cause.And there is no need for additional commu-nications because P&G’s involvement isclear from the outset.Another powerful strategy is to offer

consumers the chance to get involved insome aspect of community investment.Vodafone is running a programme calledWorld of Difference, which gives membersof the public the chance to be funded towork for a charity of their choice for a year.This approach works because it gives theconsumer more than information, it isoffering them the opportunity to take part.This is a much more subtle and effectiveway of communicating values to consumersthrough community investment thansimply telling them about it. �

Measuring community investment

So you think you’ve made a difference?As community investment becomes more strategic, companies want to know whatimpact their activities are having on society

Companies surveyed for this report allagree that measuring the impact of

community investment on their business isa huge challenge.Employee turnover, for example, will be

determined by a host of factors includingbenefits, the quality of management andcareer development. Community invest-ment activity may make an importantdifference, in terms of the working cultureand employee motivation, but isolating thisimpact is difficult.Nonetheless, all companies in this study

say they realise the importance of being ableto measure the business benefits of commu-nity investment. Vodafone UK Foundationhead Sarah Shillito explains: “It’s corporatemoney, shareholder money and you need to

be accountable for where it’s going.”Measurement of the impact of any

spending is crucial to building up a businesscase for community investment. Several ofthe companies surveyed say being able topresent this case internally is particularlyimportant in the current economic climate,where community investment budgets maybe vulnerable.There are standard ways of measuring

business benefit and these are practisedwidely. Most companies we surveyedconduct regular reviews of employeeawareness of community investment.Vodafone UK conducts a poll every eightweeks that features questions on employeeattitudes to community investment. Thepoll has shown Vodafone that employees

who have heard about the foundation’swork are more likely to feel positive aboutworking for the company – giving evidenceof the foundation’s value to the company.

Education programmes are BP’s focus

Companies continue to usecommunity investment as abasis for communication, butare becoming more focused

While there are some cases of extremelygood evaluation, in most companies thistends to be restricted to a few flagshipprogrammes. Companies are not yet at thestage of being able to evaluate all of theiractivity in such a robust way.This is partly because such research is

very expensive. Both RBS and Microsoftrefer to a reluctance to invest huge sums inresearching social impact where there wasno clear action plan as a result. “If you’re notgoing to use what you measure, don’tmeasure” is the principle employed atMicrosoft. Measurement is recognised asvaluable only when it will be used to informfuture activity.While companies acknowledge the chal-

lenges associated with measuring theirsocial impact in a meaningful way, there is adefinite consensus that this is an area thatwill continue to grow in importance ascompanies become more focused in theirobjectives for community investment. �


nies are bringing on board external partiesto help them with their measurement. P&Ghas hired researchers at Boston Universityto help measure the social impact of itsprogrammes. Microsoft has supported the

University of Washington’s independentresearch on the impact of NGOprogrammes working on employability ineastern Europe as a contribution to ICTresearch and knowledge. IBM has usedexternal research partners to study theimpact of its technology programmes onteachers.All companies stress the importance of

independent assessment. P&G, RBS and BPallmake use of external auditors to verify theirreporting of community investment. Thereare different levels of assurance employed butgenerally this involves checking that there is atrail of evidence to support whatever claimsare being made about community invest-ment. For large projects, more comprehensiveindependent assessment andmonitoringmaybe appropriate. For example, in 2002 BP estab-lished the Tangguh Independent AdvisoryPanel, chaired by former US senator GeorgeMitchell. For the past five years it hasproduced detailed reports on BP’s Tangguhproject in Indonesia, recommendingimprovements to which BP publiclyresponds.

The public relations value of communityinvestment can also be measured accurately.Royal Bank of Scotland head of communityinvestment Stephen Moir says the bank hasmany tools for tracking brand performance.These can be used to measure the impact ofcommunity investment on perceptions inexactly the same way as they wouldmeasure the impact of a mortgagecampaign.

Measuring social benefitsCompanies are able to measure the scale oftheir activity relatively easily. For example,P&G measures the number of children whobenefit from its Live, Learn and Thrivechildren’s programmes each year. Microsofttracks how many people have been trainedthrough its programmes and the number ofpeople it has reached with technology,through community centres and variouseducational programmes.It is more difficult to define and measure

the social impact of this activity – how havethe people who have been helped actuallybenefited, and to what extent? BP corporateresponsibility director Sheldon Daniel sayscommunity investment professionals needto be moving towards a clearer under-standing of social impact. “I think we miss abig trick if we are not analytically robust inour approach to social investment – weshould be clear from the onset on the vari-ables we want to impact and on theframework for measuring success,” he says.This kind of analysis usually requires

specialist research skills and many compa-

BP: impacts shaping investment targets

Heritage • BP was founded in 1908. Community investment is shaped by its particular impacts asan oil and gas producer.

Community investment • Largely decentralised, with responsibility for day-to-day running divested to differentstructure business segments and regions.

• Activity supports the company’s investments in communities, to ensure BP’s presencebrings positive benefit. Content and delivery of programmes depends on local context;no single model.

Issues of focus • Education and enterprise development are the core areas of focus, bringing advantagesto the communities in which BP operates as well as providing critical skills that thebusiness needs.

Spend • $135m in 2007. $500m committed over five-year period to 2010.Employee volunteering • BP Foundation’s Employee Matching Fund matches volunteer time and donations.Leading activity • BP’s work around the liquefied natural gas project in Tangguh, Indonesia, is a

sophisticated example of conducting and evaluating community investment inextractive communities. Having developed an integrated social strategy for communityinvestment, BP went on to instigate a rigorous system of verification and assessmentof its commitments. The Tangguh Independent Advisory Panel was established in 2002.It produces frank feedback on BP’s performance and holds public hearings to facilitateopen discussion of the company’s practices.

Thanks to all those who took part in this research for theirtime: Celia Moore at IBM, D-J Collins at Google, SarahShillito at Vodafone UK, Sylvia Laffarge, Melissa Pailthorpand Una O’Sullivan at Microsoft, Sheldon Daniel at BP,Janette Butler and Brian Sasson at Procter & Gamble,and Stephen Moir at Royal Bank of Scotland.

Thanks also to Mark Goyder at Tomorrow’s Company andCatherine Sermon at BITC for agreeing to be interviewed.

For more information on advertising or editorialoptions in future Ethical Corporation special reportscontact Andrew Bold on +44 (0) 20 7375 7188 or [email protected].

All companiess stress theimportance of independentassessment

Positive results breed further efforts

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Specialreport:communityinvestment Thevalue ofgiving · 2012-07-18 · Good Business, a corporate ... Research indicates there are three lessons for companies that want to ensure giving