Proxy Proposals on Charitable Contributions Are Rare, but Will We See More?

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Socially responsible investors have become a bigger part of a company’s ownership.  Large funds, such as Vanguard, BlackRock, pension funds and others are exerting their influence for better ESG (Environment, Social, Governance) performance. Various nonprofits are also flexing their muscles. Will the increased scrutiny lead to more proposals on charitable contributions?

In 2017, there were four proposals regarding companies’ charitable contributions, at Alphabet (Google), Apple, General Electric, and McDonald’s. Each of these proposals received a very low number of votes in favor of the resolution (0.5 to 3.5 percent) and as a result failed.

In general, the four proposals posed a similar request regarding the reporting of a company’s charitable contributions. One example stated: “Company shall provide an annual report of charitable contributions, omitting proprietary information and at reasonable cost, disclosing: the company’s standards for choosing recipients of company assets in the form of charitable contributions; the business rationale and purpose for each of the charitable contributions, if any; personnel participating in the decision to contribute; the benefits to society at-large produced by company contributions; and a follow-up report confirming the contribution was used for the purpose stated. The report should be published on the company’s website.”

One area of confusion among voters, which is evident in some of the lists of companies’ giving, is the difference in reporting regulations for corporate funding versus company foundation funding. In the US, foundation giving is public knowledge and contributions may be reviewed on the foundation’s IRS Form 990.

Public disclosure of non-foundation company giving is not required. However, many companies now disclose the organizations they give to in CSR reports, for example, with some including the amount, and some the purpose of the gift. Conversely, some companies still don’t publicly disclose their non-foundation total giving statistics at all.

The inconsistency of reporting across the spectrum can be frustrating to certain advocacy groups. And when companies do not disclose the data, these groups and other stakeholders often presume the company is purposefully trying to hide information. Some investors believe that they need to have a complete understanding of where all corporate contributions are going, because there might be an impact in other areas of the business.

For example, philanthropy officers need to be careful when they’re making decisions about the nonprofit organizations they support, because these organizations could be affecting other parts of the business in a negative way. I have seen nonprofits request charitable support from a company while the same organization is waging a protest against one of the company’s business units or products. I had two instances of this while I was at Disney. These are conflicts that can significantly affect a company.

It will be interesting to watch if companies’ stances on issues such as immigration, racial inequity, sexual misconduct and guns will lead to a deeper look at charitable contributions by some, particularly those in the ESG investment community.

Heightened focus on corporate citizenship issues

“The volume of environmental and social proposals at Russell 3000 companies has consistently gone up in the past five years,” according to The Conference Board report Environmental and Social Proposals in the 2017 Proxy Season. “Although such proposals received average support of only 21.4 percent of votes cast in 2017, support levels for these proposals continue on an upward trend. The uptick in successful E&S proposals can largely be attributed to a shift in the voting policies of traditionally passive investors.”

The Interfaith Center on Corporate Responsibility is a group of shareholder advocates who press companies on ESG issues. Their coalition of over 300 global institutional investors currently represents more than $400 billion in managed assets. They leverage their equity ownership in some of the world’s largest companies to engage management to identify and mitigate social and environmental risks resulting from corporate operations and policies.

The center focused on 10 issue areas in its 2018 Proxy Resolutions and Voting Guide.  The number after each category is the number of resolutions by issue:

  1. Climate Change – 61
  2. Inclusiveness/Diversity – 57
  3. Lobby/Political Contributions – 45
  4. Human Rights/Trafficking – 26
  5. Corporate Governance – 25
  6. Environment, Health & Sustainability – 23
  7. Health – 12
  8. Food – 8
  9. Water – 7
  10. Financial Practices & Risk – 2

The report is available at:

While the proposals submitted don’t specifically target charitable contributions, many of the issue areas are important to a company’s corporate citizenship strategy. And although most shareholder proposals for social and environmental issues don’t pass, they do often prompt changes in company policies.

Originally published by The Conference Board on March 13, 2018


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Creating Business Value through Social Impact is More Effective when Corporate Citizenship is Built-in, not Bolted-on

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Positive social impact, the result of a company’s efforts to do good directed towards solutions to important problems, is more impactful when a company integrates those efforts with their core competencies and through their products and services. Many corporations’ efforts have been adjacent to the company’s business, or “bolted on.”  A “built-in” ethos, where the company works to create value for both the bottom line and the outside world has strong long-term success implications for both.

This was the discussion of The Conference Board’s Corporate Social Responsibility Council at their recent meeting in San Francisco. Council Members from some of the world’s largest corporations gathered at Google’s Community Space on The Embarcadero to look at how actions of their respective companies can both create bottom-line and societal value. While there has been much talk, there is significant opportunity for companies to broaden their approaches.

A company’s tool box for doing good has long included philanthropy, employee volunteering and local community engagement. That toolbox is rapidly expanding to include shared value, impact investing, and products and services with purpose, not to mention many of the other components of ESG (Environment, Social Governance).   Whereas much of the work was done for reputational reasons or risk mitigation, it is the value creation for the business that is the bigger opportunity. This includes: brand differentiation; talent recruitment, retention and productivity; operational efficiencies; product innovation; and new business prospects.

The big question at the council meeting considered how CSR is organized at companies. For example, are product/innovation staff leading CSR initiatives on their own and are responsibility/sustainability/social impact employees knocking on the doors of those innovation employees to get on their agenda? The answer was a combination of both.

But to really scale CSR within a company, corporate citizenship executives need to be intrapreneurs: internal entrepreneurs who encourage those in the business units to innovate with social purpose. Younger employees tend to develop new products with sustainability and social impact in mind. Corporate executives will now need to be less risk averse and open their minds to the possibility of what is being proposed internally.

Social entrepreneurship

Social entrepreneurs target societal problems and provide innovative solutions by using market mechanisms. Elizabeth Gore, chairwoman of Alice, cited three attributes that are changing what corporate success looks like: “Digital transformation, authenticity and the entrepreneurial nature of work.” Alice supports an entrepreneurial ecosystem that provides equal opportunity for all with a focus on women and minorities.

Gore asked council members how their companies are partnering with entrepreneurs. She noted that today 70 percent of jobs created are from entrepreneurs and their small and medium sized enterprises (SMEs). Many of tomorrow’s new products and services will be created by these entrepreneurs. She challenged the members, by asking: “Will your company be left behind by not engaging with them early?”

Impact investing

Impact investing often means different things to different people, but it is a trend that is gaining momentum with capital markets and companies alike. Many financial investors are looking for blended value—the old triple bottom line with financial, social and environmental performance.

Companies are beginning to invest a part of their portfolio is socially responsible funds and companies. When doing so, investors should be clear about the financial return and the social impact they want to have. We have seen some of this where a foundation will make program-related investments utilizing funds from their corpus. The ability to scale social good can be exponentially larger through impact investing versus traditional philanthropic means.

If everyone in the company has the responsibility to act responsibly, then if taken a step further to incorporate positive social impact in both business decisions and product design, the outcome will most likely be one of both improved financial performance, as well as helping our world be a little better.


First published by The Conference Board on February 27, 2018.

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Book Review—”Climate of Hope: How Cities, Businesses, and Citizens Can Save The Planet”

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Michael Bloomberg and Carl Pope have written an informative and compelling book about climate change and our opportunity to slow and halt its progression. Throughout it, the authors note the importance of philanthropy moving both public policy, and public opinion—as evidenced by the actions of Bloomberg Philanthropies, which has offered up to $15 million to support the operations of the UN Framework Convention on Climate Change Executive Secretariat, including its work to help countries implement their commitments under the 2015 Paris Agreement on climate change.

I was not familiar with Carl Pope, former executive director and chair, of the Sierra Club, but I am a huge fan of Michael Bloomberg, former New York City Mayor, and founder of Bloomberg L.P. and Bloomberg Philanthropies. These two men, while coming from different worlds and sometimes different opinions, came together around this issue with the optimistic belief that we have the solutions necessary to make the world healthier and more prosperous.

This paragraph from the last chapter, titled “The Way Forward,” encapsulates the spirit, and hope of the book: “We can stop global warming. Not by slowing economies but by speeding them up. Not by depending on national governments but by empowering cities, businesses, and citizens. Not by scaring people about the future but by showing them the immediate benefits of taking action. If we accomplish this, we will be healthier and wealthier. We’ll live longer and have better lives. We’ll have less poverty and political instability. And while we are at it, we’ll pass on to our children and theirs a brighter future.”

The book is not all rosy and it gives the facts needed to understand the issues, which is important to better understand the solutions. For example, there are some highly technical pages devoted to the sources of climate change, which include methane, nitrous oxide, halocarbons, black carbon particles and two different sources of CO2: fossil fuels/industry and forestry/land use. These sources are a result of industry; fossil fuel production; electricity and heating production; agriculture, forestry and land use; building heating and cooling; and transportation. The stakes include rising seas, severe heat, drought, and other consequences.

To me the most exciting aspects of cleaning up the planet are the positive economic implications. More clean energy jobs are being created every day. The circular economy is showing how products are being designed with the afterlife in mind. Buildings are being built smarter and cars are running on batteries. Agriculture has better systems for how we grow food using less water and reducing methane and CO2 emissions. The green economy is booming.

“Cooler heads can produce a cooler world,” write Bloomberg and Pope. “National governments are not the best places to create these solutions. Rather, it is the mayors, CEOs, entrepreneurs, activists, concerned citizens, and other local actors who truly have the power to win the battle against climate change in ways that will also generate economic growth and improve public health—and many, in fact, are already making substantial progress.”

While the US Federal Government is pulling out of the Paris Agreement (COP21), businesses and local governments are staying the course, exemplified by Bloomberg Philanthropies’ offer. It is critical for the future of the human race that we listen to and take care of Mother Earth. Companies are partnering with nonprofits such as The Nature Conservancy and Conservation International, using their philanthropic dollars to address various aspects of climate change. Climate of Hope provides a roadmap of what needs to be done and how to approach the issues. Much work is already taking place, but we have a long way to go. We need to all start the journey now and there are few better places to start than in the corporate philanthropy world, where funding and partnerships can be unleashed to make huge strides.

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Seeing Opportunity in Reputation Risk

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Whatever the cause of a reputational hit, boards are liable to be held accountable and can mitigate their own reputation risk by diligently asking the right questions about the company’s ESG and CR strategies, practices, risk management, crisis preparedness, and the potential reputation-enhancement opportunities embedded in successfully managing such risks.

My new article appeared in the April edition of the National Association of Corporate Director’s Directorship Magazine.  It was co-written with friend and colleague Dr. Andrea Bonime-Blanc.  Andrea is CEO of GEC Risk Advisory, a global strategic governance, resilience, and risk advisory firm, and former chief risk, ethics, and legal officer for several global companies.

To read the full article, click here.


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Two Companies Collaborate around Shared Desired Outcome to Build the Workforce of Tomorrow

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collaboration-iconFirst published on The Conference Board Giving Thoughts Blog on November 30, 2016

We often talk cross-sector collaboration, but we don’t often hear about companies working together to solve a social problem. CH2M and Dow are doing just that. Interestingly, they count each other as both customers and suppliers—strategic business partners. Together they partnered with the Smithsonian Science Education Center to create the Dow-CH2M Smithsonian Teacher Scholar Program.

As part of the program, Dow and CH2M identified teachers from strategic locations in which the companies have a strong presence—for example, California, Louisiana, Michigan, Pennsylvania and Texas. These teachers attended Smithsonian Science Education Academies for Teachers (SSEATs), week-long academies designed to heighten STEM teachers’ ability to inspire and enlighten their students. The teachers then took their experiences back to their classrooms. They continued their professional growth through peer networking, mentoring and interaction with Dow and CH2M employee volunteers.

“I loved participating in the class because it gave me an opportunity to see and hear real research and find ways to emulate that in my classroom,” says Gordon Culver, high school teacher, Frankenmuth High School, Michigan. “It was also exciting to have a direct connection between real-world research and the things that can happen with my students.”

Both companies support efforts around building the workforce of tomorrow and environmental sustainability. The teachers were divided into three cohorts with each focusing on one of the following elements: Biodiversity, Energy’s Innovations and Implications, or Earth’s History and Global Change. This program is an example of the companies utilizing their core competencies along with philanthropic dollars and intellectual capital through their employee volunteer programs.

“At a time in corporate giving when so many social issues are pressing around the world, it is even more critical to collaborate with other funders with whom you share similar values and interests,” said Ellen Sandberg, executive director, CH2M Foundation. “The multiplier effect comes into full force, thus leading to even greater impact. Partnering with Dow has meant greater engagement between the two companies than ever before, benefiting both the community and the business relationship.”

“We realize that in order to tackle the challenge of building the STEM workforce of tomorrow, one company cannot do it alone,” said Meredith Morris, global STEM leader, the Dow Chemical Company. “We were extremely proud to expand our collaboration with the Smithsonian Science Education Center to include our key business partner, CH2M. It is exciting that we are able to combine our aligned global citizenship and sustainability strategies and engage the passion and skills of our employees to collaborate on a program that will empower educators in communities that are important to us.”

Initial feedback from the program is positive and shows that it has sparked enthusiasm in the teachers and subsequently benefited their students. “I think it has made an immense impact on my teaching strategies,” said April Languirand, fifth grade teacher, Lakewood Elementary, Louisiana. “I have a degree in history and am a huge history nerd. Science has never been my passion, until now! The program piqued my interest in science like never before. It also made me think about why I didn’t like science as a student. I have put a lot more effort into making lessons fun for my students—being excited about the lesson and then passing that excitement on to my students.”

Rhonda Wendel, fifth grade science and social studies teacher, Danbury Elementary, Texas, said: “I have shared with my students that there are so many choices of careers in science that I didn’t even know existed. The careers that the experts discussed opened up a whole new world for me to share with my students.”

The desired outcome if the Dow-CH2M Smithsonian Teacher Scholar Program is to build the workforce of tomorrow and the anecdotal feedback received so far certainly points to long-term success!

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