Companies continually look for new and different ways to differentiate themselves, and one way to accomplish this is to associate with a charitable cause.  While companies most often site the intrinsic value of philanthropy as the driving force behind their efforts, they also acknowledge other benefits.  Corporate philanthropy can also improve a company’s image, increase sales, help retain employees and create value for shareholders.  In 2002, Cone Corporate Citizenship Inc., the Boston-based strategy firm that links companies and social issues, discovered that if consumers knew that a company tolerated negative corporate citizenship practices, 91% of Americans would consider switching to another company’s products or services.  Another 80% would refuse to work at that company.

This alone creates powerful incentive for companies to align their corporate mission with social needs.  But how do companies make the choices between the hundreds of worthy causes, and once the choice is made, how do they insure that they engage effectively? 

 Representatives from The Coca-Cola Company, Merck & Co., Inc, Reebok International, Ltd. and The Carter Center discussed these topics and the role of corporate philanthropy in today’s global business environment during “Corporate Philanthropy,” part of the “Conversations at The Carter Center” annual discussion series. 

 

Founded in 1982 by former U.S. President Jimmy Carter and his wife, Rosalynn, the Atlanta-based Carter Center has worked to improve the quality of life for people in more than 65 countries.  A not-for-profit, nongovernmental organization, the Carter Center works closely with the governments of these countries to identify needs—from advancing human rights to eradicating disease—and in the process has become a global clearing house for matching human need with corporate capability.

 

Because of The Carter Center’s global reach, it’s able to help companies identify areas of need and where it might be most effective.  With over two decades of experience, The Carter Center is aware of what works best in terms of how companies can contribute philanthropically.  “The key, I think, is to align with a not-for-profit (like The Carter Center) where you have a mutual interest, and similar goals and outcomes you are looking to achieve.   Then when you set up a partnership to achieve that goal, you’ll be more effective,” said Dr. John Hardman, The Carter Center’s executive director. 

 

According to Hardman, Carter Center representatives sit down with corporate representatives to map out a company’s goals and discuss what it hopes to accomplish through its philanthropic efforts.   Together, the corporation and The Carter Center design a strategic plan.  “Through this process, the companies become strong partners,” said Hardman. 

 

Although for-profit companies and not-for-profit organizations define success in different ways, The Carter Center believes that clearly defining the goal of the philanthropic endeavor alleviates any tension.  “Corporations have come to us because of their impression that The Carter Center is unbiased, fair and neutral and is therefore going to follow objectives through to the end,” said Hardman. 

 

During her presentation, Brenda Colatrella, senior director, Office of Contributions, Merck & Co., Inc., a global pharmaceutical products company, discussed what it takes to make a philanthropic partnership work.  “Programs and partnerships work when there are no personal agendas; when there’s trust, clearly defined common goals, and transparency,” she said.  “Partnership is tremendously important.  The future looks bright if we’re not only talking to each other, but understanding each other and starting to work together with a focus on the program and a common goal.”

Once a company has decided to act philanthropically, how does it decide what cause or causes to support?  The answers vary. 

 

“Giving away money is an enormous task,” said Doug Cahn, vice president, Human Rights Programs, Reebok International, Ltd., a worldwide designer, marketer and distributor of sports, fitness and casual footwear.  In 1988, Reebok’s company leaders decided that it would honor the 40^th anniversary of the signing of the United Nation’s Universal Declaration of Human Rights by establishing the “Reebok Human Rights Award.”  Frontline activism, the plight of inner city youth, and the improvement of workplace conditions are all issues that Reebok, through the Reebok Human Rights Foundation, addresses. 

 

“Being connected, understanding and being knowledgeable about what institutions like The Carter Center are trying to do is important,” Cahn told The Carter Center audience.  “We have an obligation to balance the interests of our shareholders, of the communities in which we work, of our employees and the environment,” he added.  By keeping up to date with what the Center and other non-governmental organizations (NGOs) are doing, Reebok can find innovative ways to support the human rights community.

 

“Human rights are a part of our charter.  We talk about it at new employee orientations.  Employees have organized to form the Reebok Employee Action Committee, and we celebrate the recipients of the Reebok Award.  We care deeply about the workers who make our products,” said Cahn.  For that reason, Reebok focuses on communities where Reebok products are produced.

 

For instance, Reebok partnered with Project Concern International to develop the Worker Health Initiative.  With a multi-year grant, this initiative created model workplace clinics that can be replicated on a larger scale in factories throughout Indonesia.  The Reebok Foundation also created the Women’s Health Express, where a retrofitted mini-bus acts as a mobile resource center in the Pearl River Delta region of China. 

 

With Merck, it made sense to match a product to a cause.  One of Merck’s longest running and most successful initiatives is the Merck Mectizan Donation Program.  Since its inception in 1987, Merck has contributed over 1 billion tablets or 275 million treatments of Mectizan, free of charge, to help eliminate river blindness, a debilitating and often blinding disease that affects millions of people in sub-Saharan Africa, Latin America, and Yemen, as a public health problem.  This contribution totals $1.5 billion in value. The Carter Center’s involvement began in 1996, and it has distributed over 50 million doses of the drug valued at $250 million. In 2003, the Center was responsible for delivering 9 million doses. Merck has vowed to provide Mectizan free of charge as long as the disease exists.

 

That $250 million investment does many positive things for Merck as well as for those suffering from river blindness and helped by The Carter Center.  “The involvement of a company in any kind of community project or international program sends a message to stockholders and employees, and it can’t help but improve the community at large and the feelings of self-worth in each employee,” said Hardman.  “It doesn’t take a company long to figure that out.”

 

In fact, said Hardman, since Merck began its campaign, several other large pharmaceutical companies have approached The Carter Center about creating similar programs in other parts of the world.  “When a competitor sees the value of what one company can do, then they follow that model,” said Hardman.  

 

The involvement of these companies goes beyond their direct support.  “Corporations and others step forward to say, ‘There’s some credibility here.’  That sends a message that others can do the same,” Hardman said.  “The leveraging side of this is almost immeasurable.”

 

The Coca-Cola Company does its best to match the needs of the community with its philanthropic efforts.  “We try to be a good citizen and a trusted neighbor wherever we operate,” Helen Smith Price, executive director of The Coca-Cola Foundation, the charitable arm of The Coca-Cola Company, told The Carter Center audience.  “That means understanding the needs and emerging issues and determining how we can best strengthen our community.  Our challenge is to have worldwide alignment of our citizenship strategies and we work on it every day.”

 

According to Price, The Coca-Cola Foundation receives about 8000 requests annually for donations.  Deciding which causes to support is an enormous task.  Each year, the Foundation conducts a situational analysis of the community:  What are the emerging issues?  What are the trends?  The answers to those and other questions lead to strategies and plans.  “That’s how our support of education was established,” added Price.

 

Through partnerships with schools, universities and not-for-profit organizations, The Coca-Cola Foundation has established or enhanced educational programs and learning environments for youth around the world.  Over the past ten years, the Foundation has contributed over $124 million in support of education. One example of the company’s contribution is The Coca-Cola First Generation Scholarship Program, aimed at helping young people who are the first in their families to go to college.  Since 1994, more than 1000 students on 382 college and university campuses across the U.S. have received scholarships. 

 

By supporting community development and education in the local areas where The Coca-Cola Company and its bottlers do business, the company hopes to create opportunities for people worldwide.  “We believe that being a part of the community is a privilege—a privilege we must earn daily by making responsible, effective decisions and investments that benefit our company and communities alike,” said Price. 

 

Merck’s Colatrella is aware that the company’s philanthropy makes good social sense.  Colatrella also knows it makes good business sense.  “The bottom line:  In serving the public’s interests, we help to achieve Merck’s business goals,” she said.  During her presentation, she explained how Merck’s philanthropic efforts accomplish both.

         

“(Our philanthropic efforts) raise awareness of the company and its products.  They help Merck build strong relationships with key constituents.  They create alliances with the community.  They help the company attract top scientific talent and they enhance morale and help retain employees,” said Colatrella. 

 

When an audience member asked about the effects of a company’s philanthropy on employees, Colatrella said, “I get calls from new and existing employees who chose Merck over company X or Y because of the Mectizan Donation Program and Merck’s other corporate responsibility efforts,” she said.  “That’s strong evidence that people want to work for an organization that they can be proud of at the end of the day.”

 

Since its inception in 1982, The Carter Center has operated in the black.  In 2003, The Carter Center received between $35 and $40 million in cash donations from corporations, foundations, individuals and governments.  It received another $35 and $40 million in “in-kind” donations such as pharmaceuticals and other products.  Hardman expects the numbers to be similar this year. 

 

“It’s easy to criticize corporations without looking at the positive side of what so many of them are doing,” Hardman said.   “We couldn’t operate without corporate support.  Not only with direct support but with the message that support sends to the community.”