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'Strategic Corporate
Philanthropy'
By BILL GATES
FROM TODAY'S WALL STREET JOURNAL
May 8,
2008
How
important is access to information technology? A World Bank report released
earlier this year found a very high correlation between the rate of technology
progress and income growth. It said: "Technological progress [distinguishes]
fast-growing developing economies and slow growing ones. It also distinguishes
economies that have made great strides in reducing poverty and those that have
been less successful."
At
Microsoft, we share the belief that information technology can have a dramatic
positive effect on people's lives. We also believe that one of the best ways to
accelerate the speed of technology adoption is through close partnerships
between the public sector and the private sector.
Public-private partnerships make it
possible to multiply the impact that a single organization or company could hope
to achieve working alone. They combine public sector organizations' knowledge of
local communities with private companies' technical expertise and implementation
experience. As a result, these partnerships can develop and deploy effective
information technology solutions that solve specific challenges with much
greater speed.
The
notion that businesses have a responsibility to promote the public good by
supporting the work of nonprofit and governmental organizations is not new, of
course. The late 1940s and early 1950s saw companies such as Ford, Western
Electric and Philip Morris form foundations to manage corporate
giving.
But
much of this activity centered exclusively on financial support. Today, the
value of corporate involvement lies as much in expertise as it does in monetary
support. This shift is due in part to efforts by a number of United Nations
agencies in the late 1990s to look for new ways to work with corporations to
help address major global health issues.
The
rise of this so-called "strategic corporate philanthropy" is an important step
forward. When a company like Microsoft is in a position to provide not just
money, but also the expertise and experience to help an organization use
technology to achieve its goals more quickly and more effectively, it can speed
the pace and scale of progress.
Take the United Nations Educational,
Scientific and Cultural Organization's program to create a set of global
technology competency standards for teachers. The goal is to ensure that
teachers have the training and materials to provide students with the technology
skills they will need to participate in the global knowledge economy. Three
major corporations -- Microsoft, Intel and Cisco -- helped shape the program,
thanks to a shared belief that a technically literate workforce is an essential
ingredient for sustainable economic growth.
Across
The
ultimate goal is to support the development of local economies that have the
infrastructure and skilled work force needed to create sustainable growth. My
hope is that this will help increase the number of people who have the tools and
knowledge to participate in the digital revolution from one billion to two
billion and beyond. As this happens and more people join the global knowledge
economy, they will spur further innovations that address difficult issues faced
by so many people around the world.
This, more than anything, will be
the key to creating a world where everyone can expect to lead long, healthy,
productive and fulfilling lives.
Mr.
Gates is chairman of Microsoft Corporation.
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The headlines:
We always wondered why all our volunteers have goofy smiles on their faces all the time. Now we know. The Civic
Consulting Alliance is a partnership between the City of
Here are
some examples of pro bono projects facilitated by CCA from their site:
- CCA helped the Department identify key goals that
indicate environmental progress, and developed an environmental scorecard for
the City based on these. The priorities outlined in the scorecard were used to
realign DOE projects and priorities, and then were used to align the
environmental efforts of all City Departments.
- Each year, about 3 million tons of waste are generated
in
- Five-hundred-thousand riders a day depend on the
Chicago L, yet years of deferred maintenance now require billions in repairs.
Faced with such a large, yet required, investment, CTA asked, "If you
could build any rapid transit system in the world, what would it be?"
Along with its partners, CCA identified the requirements, characteristics, and
costs of "the rail of the future." This research led to numerous
planning efforts to reflect the result in current projects.
- Working with line and management personnel, CCA and
McKinsey and Company is applying lean transformation techniques to help improve
the effectiveness and efficiency of bus maintenance across all of CTA.
You can
read about their projects with the City of
Like early corporate philanthropy,
pro bono services offered by the leading consulting firms often appear to be
more opportunistic than strategic. They are driven by requests and
partner interests. As a result, it is hard to evaluate their collective
impact or to tell a compelling story about the pro bono work being done across
the country.
In the last 10 years, corporate
philanthropy programs have professionalized their efforts to be more focused on
intentional impact. They have identified key issues that are aligned with
their interests and have started making larger grants that look to connect them
deeply with the issue and to position the company as a leader.
These companies have further
professionalized these efforts by becoming active members of broader foundation
coalitions. If they are strategically investing in education, they
are partnering with other foundations across the country making similar
investments to increase the effectiveness of their efforts (and those of their
peers).
As consulting firms increase
their investment in pro bono in the tens and hundreds of millions of dollars it
is time for us to follow the lead of strategic corporate philanthropy. To
increase impact, these firms should be at the foundation tables that are building
collective strategies for approaching core issues like education and the
environment. This would not only help to focus the pro bono investments of
professional services firms, but could perhaps more importantly bring a fresh
perspective to these groups of grantmakers.
How do we get associations like the
ones below to invite firms to the table to talk about pro bono as a form of
grantmaking?
-
Grantmakers for Effective Organizations (http://www.geofunders.org/home.aspx)
- Council
on Foundations (http://www.cof.org/)
-
Grantmakers for Education (http://www.edfunders.org/)
-
Grantmakers for Children, Youth and Families (http://www.gcyf.org/)
-
Grantmakers in Aging (http://www.giaging.org/)
- Environmental Grantmakers Association (http://www.ega.org/)
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Michael Smith, Director, Social Investment, at The Case Foundation, served as the Master of
Ceremonies, with help from co-hosts Annie Linehan of CityBridge Foundation and Rick Moyers of Meyer Foundation.
With nearly 200 local business professionals eager to volunteer their skills and expertise (as of 11/07!), Taproot is poised to award 5 Service Grants in our first grant round (March '08), and is thrilled to be able to help Greater Washington's high-performing nonprofit organizations build their capacity to be better able to deliver on their mission.
This is a really smart way for a
firm to drive PR. There is the buzz that is created when they announce the call
for entries. The announcement quickly circulates in the nonprofit community and
is visible to peer firms. The announcement can also be sent to the firm's
clients for them to forward to the nonprofits they care about, which helps retain
and grow accounts.
The firm then gets dozens of entries
and can strategically identify the project that will be most engaging for
employees, create local visibility and make the greatest impact. Finally, it
creates a sense of value on the end of the award winner. The selected nonprofit
knows that it was selected from a pool of 31 nonprofits so they are both
flattered (this can be leveraged to get their staff, board and funders excited) and
feel a sense of responsibility to be a good client. This addresses one of the
most common issues with nonprofit work - pro bono clients that are not invested
because the work is free. The Burpee Museum of Natural History is likely going
to take this project very seriously and be a great
client.
Now the down side - and it is
significant. Fetelli has 31 nonprofits complete a proposal or entry. I have
not seen the proposal format, but if it is like most proposals, it likely
required the nonprofit to invest two days to develop (thinking, internal
alignment and writing). That is 62 days of nonprofit time invested. I did a
quick back of the envelop calculation and estimated that it costs nonprofits
roughly $35,000 to develop all those entries. So, the net value of the grant
is $15,000 ($50,000 - $35,000). And while Burpee is elated, 30 other nonprofits
now associate the Fetelli brand with disappointment and a wasted investment of
time.
At the end of the day, $15,000 in
pro bono value is still more than $0. I would, however, challenge Fetelli and
similar firms to think about how to increase the "impact" margin on these types
of programs.
You can read about Burpee and
Fetelli in the Rockford Register Star:
http://www.rrstar.com/homepage/x1637128843
There are daily articles about carbon footprints and environmental footprints. Companies and nonprofits are using the concept to market their goods and services: "Reduce your carbon footprint." "Have a carbon neutral footprint." "Our new building has a carbon neutral footprint."
In the past, this survey enabled professional services firms to include pro bono work in their total giving number (defining it as a cash equivalent). It was, however, lumped in with other in kind donations and therefore was not tracked accurately.
This year, CECP is creating a distinct line item for pro bono for professional services firms AND is enabling other companies to add pro bono work to their total giving number. This is a significant validation of the value of pro bono to the community but also represents an understanding of the investment required for companies to offer quality pro bono programs.
In the next few years, we will for the first time start to reward in house pro bono programs and understand trends in the field.
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As a sponsor of the Pro Bono Summit we were asked to identify outstanding examples of pro bono programs to highlight at the opening reception. Last night at the Harvard Club in Manhattan, these six firms were honored.
1) Ad Council
For over sixty years, the Ad Council has been the advertising industry's gift to our communities. Every year dozens of ad firms develop the pro bono creative that Ad Council places on $2 billion in donated ad inventory to get out critical PSAs.
2) McKinsey
Since its inception, McKinsey has made pro bono a core part of their culture. Today, their 8,000 consultants provide 5% of their time to pro bono work. That is the equivalent of a 400 person full-time consulting firm dedicated to pro bono.
3) General Electric
GE has pioneered the in-house legal pro bono concept. Their leadership has enabled attorneys to realize that they don't need to be at a law firm to do it pro bono. Today, roughly 50% of GE attorneys participate in the program.
4) Pentagram Design
Pentagram, the gold standard of design firms, reports that 50% of their clients are nonprofits who they serve pro bono. As they explain, this investment is a large part of what has put them on top. Their pro bono work is widely recognized and is a significant part of what attracts their paid corporate work.
5) Monitor
Monitor, a 1,500 person consultant strategy firm, has partnered with New Profit, Inc in Boston to channel tens of millions of dollars of pro bono consulting to well vetted and high potential social entrepreneurs. By working with New Profit, Monitor is able to focus their pro bono efforts on high potential nonprofits at an inflection point in their growth. This maximizes the impact of their pro bono work.
6) Harvard Business School Community Partners
HBSCP works with HBS alumni on consulting projects for nonprofits. In the Bay Area alone, they provide over $1 million per year in consulting to local nonprofits. They are making pro bono part of what it means to be an HBS alumnus. They are truly building the ethic into the DNA of business leaders.