Corporate Social Responsibility
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Study from the Global Public Policy Institute
Authors: Robert Marten · Jan Martin Witte
Some excerpts -
The new philanthropy is not only global, but is also increasingly being seen as a signifi-cant player in international development. Some observers have even claimed that the scale of private donor engagement may even rival or overtake that of official develop-ment assistance. Other observers might argue that this private philanthropic engage-ment has always been there, but has been greatly overlooked; in fact, no less a commen-tator than Jeffrey Sachs recently noted that, “the Rockefeller Foundation was the world's most important development institution of the 20th century, and the Gates Foundation can be that of the 21st century.”
Outlook and Recommendations
In some areas the emergence of private donors poses new challenges for international aid architecture, particularly for the international aid architecture with regard to the Millen-nium Development Goals and the Paris Declaration on Aid Effectiveness. While there is still a risk of duplication or competition, the preliminary impression is that foundations probably do more good than bad in helping traditional donors on the MDGs and the Paris Agenda. In many cases, foundations are spending funds where no donors are work-ing; many times, they are working in areas that are overlooked by traditional donors. Despite this, in certain sectors like health or microfinance, the need for dialogue and co-ordination is particularly pressing. Yet, there are many challenges to this coordination, most notably foundations’ lack of field presence. Based on this analysis, a number of recommendations for both official donors as well as foundations become apparent.
Recommendations for Public Donors
For public donors to best engage foundations a most crucial, initial step is to have a per-son or unit responsible for tracking foundations working in international development. Most traditional donors have individuals or units for monitoring and managing relations with other bilateral and multilateral donors; however, the responsibilities of this person or unit should be expanded to include foundations. Based at headquarters, this person or unit could have the following three, interrelated tasks.
1) Monitor relevant foundation activities
2) Foster field office engagement with foundations as well as training opportunities for foundation staff that want to work in the developing world, and encourage more foundations broadly to work in international development
3) Fund and coordinate more research on the emerging role of foundations in international development
1) Improve coordination, as well as learning from donors
The National Committee for Responsive Philanthropy (NCRP) released today the winter edition of Responsive Philanthropy. With the country in the midst of its worst economic downturn in a generation, this issue explores how people everywhere are struggling to cope and looking for ways to adjust their spending. The same is true for the philanthropic sector. As major sources of funding dry up, both grantmakers and grantseekers must now reexamine their financial strategies to better maintain their work.
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Gary Snyder's Blog for the National Committee for Responsive Philanthropy
Veterans Whine As Executives Dine
posted on: Monday, January 05, 2009 By Gary Snyder
Nonprofit organizations continue to get fleeced. This is the first in a series of articles on how charities, and their leaders, are not meeting their fiscal responsibilities.
In 2001, the Congress set up a nonprofit to help veterans start and expand small businesses. The National Business Development received $17 million from the federal government to operate walk-in small business centers for veterans. A recently released Congressional study discovered that only 15 percent a year, on average, was spent running the centers and in fiscal 2008, that percentage slid to 9 percent. In spite of assertions to the contrary by the Veterans Corporation, its claims are being dismissed because there has not been a separate external audit done in two years. Audits are required for organizations the size of the Veterans Corporation.
Fundraising efficiency is another focus of charity watchdogs. Stellar fundraising expenses are 10%, but 30% is the most that is acceptable. At the bottom are several veteran organizations that spent in excess of that amount---Veterans of Foreign Wars (60%), Disabled Veterans Associations (96.7%), American Veterans Relief Foundation (83.6%), National Veterans Services Fund, Inc (73.7%).
For every dollar spent on management or fundraising is a dollar spend not meeting the charity’s mission.
Gary R. Snyder is the author of Nonprofits: On the Brink.
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Bank of America Announces Initial Findings of 2008 Study of High Net-Worth Philanthropy
"We are noticing that the turbulent economic environment has, not surprisingly, also motivated these individuals to play a more active role in charitable decisions in terms of what they give, to whom and when. Our 2008 research breaks new ground and uniquely positions our philanthropic management experts across the country to help facilitate greater understanding and communication between these important donors and the non-profit institutions they support."
"Our wealthy clients are taking a more proactive approach to integrating philanthropy into their wealth management strategies," said Cary Grace, Bank of America National Institutional Advisory Solutions Executive. "We are noticing that the turbulent economic environment has, not surprisingly, also motivated these individuals to play a more active role in charitable decisions in terms of what they give, to whom and when. Our 2008 research breaks new ground and uniquely positions our philanthropic management experts across the country to help facilitate greater understanding and communication between these important donors and the non-profit institutions they support."
Highlights of Initial Findings:
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A number of private and public organizations announced this week to pledge an astonishing $3 billion to boost the fight against malaria, a disease that devastates much of the world’s poorest populations. A BBC news article suggests the support might be enough to eradicate the disease by the year 2015, the same deadline set for the United Nations Millennium Development Goals.
The funding, will be used to support rapid implementation of the first ever Global Malaria Action Plan (GMAP). According to GMAP's projections, more than 4.2 million lives can be saved between 2008 and 2015, if its plan is put into action, and the foundation can be laid for a longer-term effort to eradicate the disease. The new website for the initiative makes available the details of the plan. GMAP has been created by the Roll Back Malaria (RBM) Partnership, the global coordinating body for fighting malaria. The RBM Partnership comprises all malaria-endemic countries, bilateral and multilateral development partners, the private sector, nongovernmental organizations, community-based organizations, foundations, and research and academic institutions involved in malaria control.
The pledges represent a massive effort through the work of public-private partnerships. The World Bank has pledged $1.1 billion, the Global Fund to Fight AIDS, Tuberculosis and Malaria has pledged $1.6 billion, and the British government and private organizations such as the Bill and Melinda Gates Foundation have promised the rest.
The plan will require the cooperation from a number of different areas. There will be a role for the international community, the government within each country, multinational corporations and both international and local NGOs. The GMAP website outlines plans for:
Irish rock star Bono and his partner Professor Jeffrey Sachs, also Director of The Earth Institute at Columbia University, have made public health a key priority in poverty eradication. Much of the success is to their efforts. In a blog posting for the Financial Times on September 23, Bono reassured readers about the necessity of foreign aid:
“For those of you, the many of you, questioning aid on this site, you’re not wrong to suggest that it’s not the only answer. Of course it’s not. It’s trade, it’s governance, it’s private investment. But aid is critical… ask Germany, ask Ireland. See it as a leg-up, not a hand-out. I’m not talking about the aid of the 20th century by the way. For too many years, much aid was wasted and ended up redecorating presidential palaces instead of building hospitals. That was our corruption as well as theirs. Handing over billions of dollars to a corrupt dictator because he isn’t a Commie, knowing he will use it to suppress discontent and swell personal bank accounts - that makes you complicit. But, this is a new century, and a new understanding of aid and partnership means that we are starting to see different results.”
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Small percentage say their programs are actually meeting social goals
Many companies are not using their corporate philanthropy programs as effectively as they could, says a new survey from The McKinsey Quarterly. The survey, called The State of Corporate Philanthropy, analyzes how employees in companies worldwide view their own philanthropy programs, what issues the programs are targeting, the motives behind the creation of the programs, and finally, what the most successful companies are doing differently.
Although companies are viewing philanthropy programs as increasingly important, only one-fifth of the survey’s respondents say their programs are meeting their companies’ social goals, according to McKinsey. Additionally, one in four could not answer how stakeholders perceive their programs.
The survey shows that companies with more positive feedback align their philanthropic programs more closely with social and political trends that are most relevant to their business. The survey cites around 71 percent of the respondents say some issues addressed are relevant to their business, while 53 percent say their programs are less effective in this area.
However, 90 percent of respondents say they do seek a business benefit from their philanthropic programs, the survey says. Some common goals respondents pointed to were:
The top issues companies tend to address across the globe are education, community, and economic development. The survey says these issues are more commonly chosen on the basis of employee interests or as an indirect way of demonstrating the company’s good intentions toward board members, shareholders and regulators. Companies were less likely to choose their issues based on business needs, stakeholder interests, or leveraging existing company interests.
According to the survey, companies around the world more often choose to support a mix of local issues rather than riskier social and political issues that could more likely affect shareholder value. The top issues companies believe will affect shareholder value the most are environmental issues, health care and privacy, or data security. The survey reiterates that at more successful companies, philanthropy programs are more likely to address social and political issues relevant to the business, to be collaborative, and to meet any business goals companies have for them.
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The Corporate Philanthropist Spring 2007 newsletter focuses on corporations that invest in the arts and culture. It highlights four companies in particular who are at the forefront of giving to the arts and cultural community. Although the articles are focused only on this particular giving area, these companies’ strategies could be extended to all areas of philanthropy.
According to Dana Gioia, Chairman of the National Endowment for the Arts, American cultural life is so vibrant because Americans have a long history of private giving. Not only do corporations receive tax deductions on donations to non-for-profit institutions, many truly believe investing in the surrounding community is a win-win situation. In the year 2005 alone, individual Americans gave around $13.5 billion to the arts and humanities. With this much money being allocated, it is increasingly important that companies know how to invest their money responsibly and in a way that will yield the best results.
The following is a summary of best philanthropic practices by four American corporations, highlighted in The Corporate Philanthropist, that are dedicated to improving arts and culture in their surrounding communities.
JP Morgan Chase, global financial services firm
Varied sources of funding. Although JP Morgan gives money to communities nationwide, they work with both the public and private sector to tailor each project to the specific community. By engaging with several funding sources in the local area, money can have the largest impact.
Management example. The Global Philanthropy division is successful in large part because the company’s leaders understand the important role of arts and culture in community vitality. Many serve on arts boards and have strong commitments to cultural organizations.
Bloomberg, global multimedia news and information company
Employee engagement. The company supplies its employees as volunteers and offers corporate resources to nonprofit partners around the world. Often, artists of all kinds are invited into the office to present their now works to employees and clients during the lunch hour. These actions forge a strong connection between employees and those whom they serve.
Fostering creativity in the workplace. Bloomberg offices are designed with open workspace and in-house lunchtime performances as a way of generating creative thinking among its own employees.
HCA, Inc., largest medical operator in the United States
Long-term relationships. Establishing meaningful relationships with non-for-profits enhances opportunities to collaborate and improves the brand’s reputation within the community. HCA also often issues challenge grants to non-for-profits, and when there is a long-term relationship established, other organizations would be more likely to succeed in raising funds.
Time Warner, global media and entertainment company
Sustainable relationships. Time Warner helps arts organizations find new ways to reach new audiences in order to sustain the future of the arts community and society in general.
To visit the Committee for Encouraging Corporate Philanthropy website and to see a copy of its current newsletter, The Corporate Philanthropist, click here.
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Phillips-Van Heusen Corporation (PVH), a major US clothing manufacturer, plans to launch a multi-media driven charitable campaign to support the not-for-profit Save Ellis Island organization, the company announced on May 15, 2007. The aim is to raise funds to rehabilitate many unused buildings on the small New York Island made famous as the registration point for the tens of millions of immigrants to the United States.
This kind of philanthropic corporate campaign seeks not only to raise funds and stimulate giving by many organizations, but it promotes corporate brands at the same time. It highlights the close association of corporate philanthropy and corporate marketing that has become widespread.
The campaign will feature famous and everyday Americans recounting their families' stories of inspiration and hope. Notable figures committed to the project include former New Jersey Governor Christine Todd Whitman and former U.S. Senator Bill Bradley, Chairman of Save Ellis Island, who stated, "Ellis Island is an intrinsic element of the uniquely American immigrant spirit and preserving this landmark for future generations is something that we all need to rally around." Mr. Bradley added, "Supporting this campaign and raising the awareness and funds necessary will save the thread that binds so many Americans who can trace their family lineage through Ellis Island."
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Personal charitable giving is rising in the United States and approaches to philanthropy appear to be changing. Increasingly, it appears that the super rich are concentrating their donations on a few special causes that are very close to their hearts, rather than spreading their philanthropy widely across major traditional topic areas, such as global hunger. Barron’s reports that a growing number of philanthropists are honing in on “a narrow field where they can not only have an impact, but also find personal meaning.”
The sums deployed in this way are rising. One has had to give away or pledge over $157 million over the last five years to just make the Business Week top 50 list – a gain from a minimum of $120 million last year. But, even these large numbers undersell the story. In the Business Week list, for example, there are seven donors that have given away over $1,000 million in this period and another 10 whose generosity has exceeded $500 million.
The focus on narrow interests is illustrated in Barron’s by the love affair that Donald Rubin, former owner of the major MultiPlan healthcare group, has with the art of the Himalayas. He has been collecting for over 30 years and now has spent more than $60 million to establish the Rubin Museum of Art for his collection in New York. Or, take Warren Buffet, chairman of corporate conglomerate Berkshire Hathaway, who earlier this year pledged more than $30 billion to the Bill and Melinda Gates Foundation, noting that he knows much more about making money than giving it away and believes that the Gates Foundation knows what it is doing.
To a considerable extent Bill and Melinda Gates have concentrated their giving on their Foundation that specializes in global health, development and education. Business Week states that the lifetime estimated giving by Bill and Melinda Gates now exceeds $27,976 million – some $13,000 million behind their friend Warren Buffet. Investor George Soros, whose pro-democracy and open society causes have made him a charitable force in the U.S. and around the world, is estimated to have given away a total in his lifetime of $5,900 million. Meanwhile, Intel founder George Moore and his wife Betty are seen as having life-time charitable donations of $7,386 million – mostly for environmental and scientific causes.
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While media attention on philanthropy has recently focused on the strength of the Bill and Melinda Gates Foundation and its $31 billion gift from Berkshire Hathaway CEO, Warren Buffet, a report by the New-York based Foundation Center, a leading philanthropy authority that connects non-profits with grant-makers, examines the role that corporate foundations are playing in the philanthropy sector. According to the center’s summary report, “Key Facts on Corporate Foundations” (6/8/2006), giving by U.S. corporate foundations rose to a record $3.6 billion in 2005. A majority of surveyed foundation leaders project continued growth in 2006, although a substantial minority anticipates reduced giving.
Key Facts on Corporate Foundations addresses the size, scope, and giving interests of the nation’s corporate foundation community. The report’s key findings include:
Findings from Key Facts on Corporate Foundations come from the Foundation Center’s tracking of fiscal and programmatic information on 80,000+ foundations, corporations, and public charities; annual surveys of leading grantmakers; and analyses of the giving patterns of the nation’s nearly 1,200 largest foundations
“At $3.6 billion, corporate foundation giving represents a small but critical component of overall corporate philanthropy,” said Steven Lawrence, director of research at the Foundation Center. “Unlike corporations’ direct charitable support, it’s transparent and provides the only consistent window into corporate funding patterns.”
The following is a list of the 25 most generous corporate foundations in 2004 taken from the report. For the full report please see http://foundationcenter.org/gainknowledge/research/pdf/corporatekeyfacts.pdf.
25 Most Generous Corporate Foundation in 2004
1. Wal-Mart Foundation - $154,537,406
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The family that controls South Korea’s largest car maker, Hyundai, has pledged to donate US $1bn to South Korean charities in an effort to win public goodwill as the company faces a mounting corruption scandal, according to an article in the Financial Times on April 20, 2006. Two other very high profile corporate cases have seen similar responses in Korea.
Hyundai is accused of using slush funds to bribe public officials and win political favors. In a public apology, Hyundai’s vice-chairman said, “We deeply apologize for not taking social responsibility and causing concerns to the public. We will fully cooperate with the ongoing prosecutors’ investigation and humbly accept the outcome.” The company also pledged to create an ethics committee, composed of outside directors and experts, whose goal will be to improve corporate management and transparency.
Hyundai’s apology and donation follow by two months a decision by Samsung, South Korea’s largest multinational company, to donate US $1bn to charity following a string of corruption cases. That same day, Lone Star, the US private equity fund that owns half of Korea Exchange Bank (KEB), issued its own public apology for the allegedy fraudulent behavior of the former head of Lone Star’s Korean office, Steven Lee. It promised a $105 million donation to “Korean society.”
The three cases, while different in many details, illustrate a growing trend in Korean society: companies facing public anger are seeking to restore public trust by admitting wrongdoing, apologizing publicly and ‘repaying’ society through charitable donations.
The popularity of this response underscores the importance of public support in doing business in South Korea. According to the article, for example, while LoneStar refuses to take responsibility for Mr. Lee’s actions (Mr. Lee admitted to illegally wiring about US $15 million out of South Korea into family members’ accounts), its aggressive PR campaign is designed to counteract any damage that a bad image could cast on its recent purchase of KEB. Lone Star denies allegations that it purchased the bank for an artificially low price and evaded taxes. Amid mounting public pressure for the company to pay taxes on its profits, says the article, the Lee scandal knocked LoneStar off its “moral high ground,” which it may need if it is to stave off legal action over the KEB purchase.
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“No one who makes it into the board room of a place like Goldman is unfamiliar with the time-honored strategy of gaining influence by showing interests in the CEO’s interest, be they golf or global warming.”
-New York writer Judith Dobrzynski on the editorial page of The Wall Street Journal
A recent charitable gift from Goldman Sachs has sparked a debate over the decision- making process behind, and even the overall validity of, corporate philanthropy. On April 4, 2006 the Wall Street Journal published an editorial by Judith Dobryzynski, which accused Goldman Sachs’ Board of Directors of letting the personal interests of its CEO influence its philanthropic decision-making at the expense of its shareholders.
Her criticism was sparked by Goldman’s recent gift of 680,000 acres of land in Chile to the Wildlife Conservation Society (WCS). The gift has come under criticism because Goldman CEO, Hank Paulson is an active environmentalist, who has personally donated substantial sums of his own money to environmental causes. Mr. Paulson sits on the Board of the Nature Conservancy, which works with the Wildlife Conservation Society, while his daughter sits on the Board of the WCS. Shareholder critics such as Steven Milloy, an executive at the Free Enterprise Action Fund, have maintained that Goldman’s philanthropic policies are anti-growth, and intended to promote the personal causes of Mr. Paulson while damaging shareholders.
On April 10th, two letters to the Editor of the Wall Street Journal defended the company’s actions. First, Paul Newman, founding co-chair of the Committee to Encourage Corporate Philanthropy, which involves some of America’s largest companies, argued that beyond its charitable merits, corporate philanthropy is good for business and its significant stakeholders, including employees, shareholders and customers. He asserted that philanthropy initiatives improve workforces by instilling in employees a sense of pride in their companies. This, in turn, encourages a corporate culture of teamwork, and leadership, and improves reputation, recruiting and retention. Moreover, philanthropy positively affects the way the media, government and consumers perceive companies, thereby building customer loyalty, engendering business development efforts, and mitigating the affects of negative news. Moreover, by improving the social and economic conditions of the areas in which they operate, corporations will increase their business with those communities.
In a second letter to the Journal, Goldman Board member John H. Bryan upheld the Board’s actions as a model of good corporate governance. He explained that management (Mr. Paulson) came to the Board with a recommendation and from that point on took no part in the decision making process, which included a “thorough evaluation process aided by an independent expert from the Yale School of Forestry.” He also noted that, at their annual meeting, an overwhelming majority of shareholders agreed to the resolutions supporting the company’s environmental policies.
However, according to Dobrzynski, the Board’s claim that its decision was “independent” is irrelevant to the issue. She pointed out that Board members had to have been well aware of Mr. Paulson’s environmental undertakings and that, “no one who makes it into the Board room of a place like Goldman is unfamiliar with the time-honored strategy of gaining influence by showing interest in the CEO’s interests, be they golf or global warming.”
Moreover, she added, while philanthropy is often used as a business strategy for “branding” a company, CEOs still wield incredible influence. All too often, she pointed out, corporate charities are more closely allied with the social aspirations of executives than with the benefit of shareholders.
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The Bill and Melinda Gates Foundation said it will triple its funding commitments for tuberculosis research to $900 million over the next decade.
Speaking on January 28, 2006 from the World Economic Forum in Davos Microsoft Chairman Bill Gates launched a new campaign by the Stop TB Partnership to draw greater attention and money to the fight against tuberculosis. The partnership is seeking $56 billion over the next 10 years, or triple the amount of funding in its current TB plan, to step up efforts to bring tuberculosis under greater control by 2015.
The Gates Foundation released the following detailed statement:
A 10-year plan to cut tuberculosis cases and deaths by half could save more than 14 million lives over the next decade, according to the Stop TB Partnership, an international network of public and private groups working to end tuberculosis as a public health problem by 2050.
Speaking from the World Economic Forum in Davos, Switzerland, Stop TB's executive secretary Marcos Espinal outlined the plan during a press conference with Britain's Chancellor of the Exchequer Gordon Brown, Nigerian President Olusegun Obasanjo, and Bill Gates, co-founder of the Bill & Melinda Gates Foundation.
Stop TB's blueprint, which builds on the success of the group's previous five-year plan, calls for developing new tools to fight tuberculosis as well as expanding access to existing treatment. The partnership already has had remarkable success with an inexpensive drug regimen called DOTS, or directly observed therapy, short-course.
The Campaign So Far
If the new Stop TB plan is put into practice, some 50 million people will receive DOTS over the next 10 years. That number includes 3 million who have both TB and HIV and 800,000 who are infected with forms of TB that don't respond well to drugs available now. "This plan is important because it shows how much we can do with the tools we have today," said Dr. Peter Small, the Bill & Melinda Gates Foundation's senior program officer for tuberculosis and a member of the Stop TB coordinating board. "But it's also the case that our current tools are antiquated and inadequate, and in the long run we will not be able to win this battle without new tools."
A Familiar Foe Kills 2 Million a Year
The Fight Against TB
Needed: New Tests, Treatments, Vaccines
"With tuberculosis, there's a pretty clear path from action to outcome to lives saved," said Dr. Small. "It's quite clear if the plan is executed, it will save 14 million people and lead to the treatment of 50 million people."
What's being done now?
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Reducing Global Policy - Engaging the Global Enterprise
This landmark study reviews the numerous ways in which corporations contribute to economic development in the world’s poorer countries. It notes that “corporate engagement” covers a range of concerns, from setting higher environmental, ethical, and workplace standards in normal business operations, to charitable programs targeted at improvements in health, education, and other aspects of human development.
The report provides insights into these diverse issues, including the charitable work of multinational corporations. The scale of such giving is formidable. The report contains numerous examples in this area, including the following three:
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In 2000, the value of IBM’s philanthropic donations exceeded $120 million and consisted of cash donations, community service, and computer equipment. IBM’s major focus, however, remains on education programs. Of the $126.1 million that IBM contributed through its global contributions program and community relations activities, 70% was devoted to education. Two of IBM’s most prominent efforts in this area are its Reinventing Education grant program and its KidSmart Early Learning Program.
Reinventing Education. The $45 million Reinventing Education program is the centerpiece of IBM’s commitment to improved education. Through the grant program, IBM works with school partners around the globe to develop and implement innovative technology solutions to address education’s significant problems. Beginning in 1994, IBM established sites to support fundamental school restructuring in nine states around the United States, and in 1997, issued 12 additional grants, replicating the most successful elements of the original sites. Building on the success of the program within the United States, IBM has launched sites internationally in developing countries such as Brazil, Vietnam, and Singapore. At each site, IBM contributes the funds, researchers, and technology necessary to modernize school systems. In Singapore, IBM
KidSmart Early Learning Program. The KidSmart Learning Program is an effort by IBM to provide preschool-aged children with access to, and familiarity with, computers. In the program, IBM has worked with the United Way of America to bring over six thousand Young Explorer workstations—personal computers designed specifically for preschool children—to nonprofit daycare centers and pre-schools in over 1000 locations throughout the United States. Since the program’s inception in 1998, over 1 million benefited from exposure to computers; the vast majority of these children come from low-income families who would otherwise be unable to gain access to new technologies and the Internet. Again, IBM is building on its success by bringing KidSmart to developing countries such as Peru, Thailand, and South Africa.
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Fighting HIV/AIDS: Volkswagen Do Brasil
Brazil has one of the hightest rates of HIV/AIDS infections in South America, with 540,000 reported cases of HIV and 18,000 deaths from AIDS. Of the 330,000 children orphaned by AIDS in Latin America, more than one-third live in Brazil. Unsurprisingly, AIDS has a significant negative impact on the productivity of Brazilian firms through hospitalization, absenteeism, and shortened life expectancies. To combat the negative impact of AIDS, Volkswagen do Brasil launched an AIDS Care Program in 1996 aimed at reducing the spread and effects of the disease. Volkswagen quickly found that it was far more profitable to educate and treat its employees than to recruit and train new ones and the program quickly raised the quality of life for Volkswagen factory employees. The AIDS Care Program focuses both on prevention and treatment. Volkswagen uses the communication channels available within the company to educate workers about the dangers of AIDS and how to prevent the disease. Condom dispensers were also installed in factory bathrooms. The firm provides free medical treatment, clinical support and confidential counseling to workers already infected with HIV. This includes company-provided anti-retrovirals and other cutting-edge prescription drugs. Along with constructing a clinic to treat its workers, Volkswagen also provided a mobile care unit that visits the homes of workers to ill to travel to the clinic. Treatment extends to workers’ families and retired employees as well; while Volkswagen employs 30,000 workers, there are over 100,000 Brazilians on the company health plan.
By 1999, Volkswagen was able to quantify significant positive results from the AIDS Care Program. Hospitalizations among employees were reduced by 90 percent and AIDS-related costs were cut by 40 percent. Volkswagen also noted a high participation in the program, greater disease prevention, and better quality of life for employees and their families. Volkswagen’s efforts in fighting the AIDS epidemic earned it the Excellence in Corporate Response award from the Global Business Council on HIV/AIDS in 1999.
Fighting HIV/AIDS - Daimler-Chrysler
In 2000, Daimler-Chrysler instituted a similar AIDS workplace strategy at its operations in South Africa, where it is expected that the portion of the population infected with HIV will reach 25 percent by 2006. The company’s multi-faceted strategy involves collaboration with trade unions, service providers, and government to reduce the spread and impact of AIDS through education, prevention, and treatment.
Following a two-day conference for employee representatives and other stakeholders, Daimler-Chrysler implemented an education and prevention program that includes training 132 employees as peer-educators, promoting voluntary testing and counseling, and educating employees in the use of condoms. This portion of the AIDS program will extend into local communities through health education and awareness campaigns, improving community health care centers, and training traditional healers, medical doctors, and health workers in education, monitoring, and treatment. Daimler-Chrysler has also pledged to provide free prescription drugs to employees already infected with HIV/AIDS and to provide health care for employees suffering secondary infections as a result of AIDS. The firm’s program is unique in that it focuses on testing and evaluation, using baseline research, surveys and other assessments to ensure that company policies are appropriate and effective. It was the first industrial employer in South Africa to offer antiretroviral therapy. Daimler-Chrysler’s CEO, Jurgen E. Schrempp, was recently appointed as Chairman of the Global Business Coalition on HIV/AIDS in recognition of the company’s prevention and care program.
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Public support for philanthropy in the United States is strong, according to a new survey, but individuals providing donations are often concerned about the ethics of charitable organizations. On October 24, 2005, Public Agenda, a New York-based institution engaged in public opinion and civil society, released “The Charitable Impulse" – a study based on findings from six focus groups of diverse donors to charities, as well as interviews with a range of senior executives from not-for-profit organizations. The report leaves no doubt that scandals have a major impact on charitable organizations and that donors have long memories for institutions that attract media attention due to their unethical actions.
The report notes that, “Many donors say they have had some negative experiences with charitable giving. Most clearly remember the problems or scandals in charities they once supported . . . [and] said that when that happened, their trust was broken forever.”
The authors of the report, Ana Maria Arumi, Ruth Wooden, Jean Johnson, Steve Farkas, Ann Duffett and Amber Ott said that in focus group discussions, “Donors easily recalled the problems and the bad press associated with groups like the United Way and the Red Cross and not a few reported that they had personally ‘felt burned.’”
The study, undertaken with the support of the Kettering Foundation and the Independent Sector, is important in seeking to highlight public attitudes toward charities in an era when institutional ethics has become so prominent in the U.S. national media. To provide this context, the report begins by noting, “Over the past decade, there has been no shortage of headlines about illegal, unseemly and disgraceful dealings in nearly every aspect of American life. The often-spectacularly unethical behavior of some business, government and religious leaders has drawn intense media coverage and heightened public attention to human failing and corruption in all these sectors. So, when reports about ethical lapses in the nonprofit world appear, it is not surprising that they have the ring of truth."
“The events of September 11 focused extraordinary attention on the charitable sector. Given the huge outpouring of contributions, volunteers and human interest generated by the crisis, it was probably inevitable that mistakes would be made, judgments second-guessed and communications mangled. The troubles of the American Red Cross – accused of raising money for one purpose (helping 9/11 victims) and using it for another – has become emblematic of credibility problems in the voluntary sector. And the Red Cross dust-up is not the only controversy in the nonprofit sector to attract public attention. Tales of high salaries and high living by some nonprofit CEOs, the rise of Internet giving and scams associated with it, the glitz and ingenuity of money-seeking tactics for both legitimate charities and hucksters, high valuations of donated properties, and other tax avoidance schemes have all raised questions. The Senate Finance Committee is currently considering legislation to address these abuses and will be issuing recommendations shortly.”
The report includes the views of a range of non-profit organizational leaders who recognize there may be a need for greater oversight of the sector. They suggest that federal reform should focus on strengthening rather than fundamentally overhauling how non-profits are regulated. The report contains findings that suggest that U.S. public support for charitable organizations remains very high, despite some high-profile scandals. In conclusion, the report underscores the importance of donors perceiving organizations' communications as both honest and credible. It notes that, “During the tsunami disaster, the international charities were very diligent in explaining to donors how their money would be used. In several of the focus groups – without prompting – several participants expressed great respect for Doctors Without Borders who announced that they had received enough donations for tsunami relief and they would not be accepting any more contributions except for projects in other parts of the world. This had a powerful effect on the groups, reminding us all that “honesty is the best policy” after all in the hard work of serving the public interest.”