New Approaches to Philanthropy

20 Mar, 2017


New Approaches to Philanthropy

March 2017

By the end of 2017, Best Buy plans to nearly double the number of its Teen Tech Centers for underserved youth, bringing the total to 20.

The latest, opened in December, is in Denver. Next to come online are in Atlanta and San Francisco. After that, Las Vegas and Pittsburgh are slated for opening.

The Teen Tech Centers offer young people the opportunity to learn, free of charge, technical skills that will be required as they enter the workforce. In these after-school programs, thousands of students will also have access to state-of-the-art equipment, including 3-D printers and videography and music studios. They can learn programming and coding as well as graphic design and music production.

Plus, they will be mentored by Best Buy’s own techies.

“The idea for the Teen Tech Centers came out of a decision to apply the company’s unique expertise to a serious social problem,” says Andrea Wood, Best Buy’s director of community relations. “In coming years, 77 percent of all jobs will call for technical skills, and too many of our young people from lower-income families go to underfunded schools where they lack the opportunity to use high-tech equipment and develop the skills they’ll need. Our goal is to get teens excited about pursuing careers that leverage technology.”

The benefits work both ways, Wood says. “We’re helping develop a more skilled workforce, but we’re also getting our employees engaged in their communities and in Best Buy,” she says. “Everybody wins.”

The program provides a good example of corporate responsibility as it is increasingly understood. “Companies these days are moving past write-a-check philanthropy,” Wood says, which is why Best Buy is taking a shared value approach.  “The business community is trying to look at more meaningful ways of getting involved. We want our efforts to be aligned with our business and the expertise we can bring — in this case, in the tech area. And we want to have the greatest impact for our efforts.”

“The idea for the Teen Tech Centers came out of a decision to apply the company’s unique expertise to a serious social problem,” says Andrea Wood, Best Buy’s director of community relations.

The Teen Tech Centers also reflect a significant shift in thinking about corporate philanthropy. An influential statement of this approach was issued in 2015 by Darren Walker, president of the Ford Foundation, called “A New Gospel of Wealth.

In 1889 Andrew Carnegie’s “Gospel of Wealth” argued that inequality was an inescapable condition of a market economy. That being the case, those fortunate enough to profit from industrialism had a duty to help those it left behind. Carnegie proposed an early version of “giving back.”

But under Walker’s leadership, the Ford Foundation decided it was time for a new model of corporate philanthropy that examines the “deeply rooted cultural norms and structures” that perpetuate inequality “in every corner of every country.”

Walker says corporate philanthropy should focus on the “intricate patterns of injustice,” which include biases rooted in race, gender, ethnicity and class. Companies should seek to understand these problems and align their efforts to solve them. Under this model, corporate philanthropic efforts should make giving back unnecessary. Under the emerging model, decisions about the direction of philanthropic efforts will be made with greater involvement by the intended beneficiaries.

A Tall Order

That’s a tall order. If corporate philanthropy can fill it, that’s great. But no one thinks businesses can do it alone, and the subject has been discussed and debated for decades. “It started well before my 18 years in this field,” says Kris Putnam-Walkerly, president of Putnam Consulting Group, whose clients have included the Robert Wood Johnson Foundation, the Annie E. Casey Foundation and the Charles and Helen Schwab Foundation. “It definitely predates [the Ford Foundation statement].”

Putnam-Walkerly says the nagging question is whether an organization’s philanthropic efforts “are actually perpetuating the conditions the organization thinks it is addressing. Of course, we need homeless shelters, but paying for more beds in homeless shelters and volunteering in them — which are good things in themselves — might really be simply putting Band-Aids on problems when we should be helping stop the bleeding.”

Addressing Root Causes

Addressing the causes of homelessness is more difficult than supplying volunteers at homeless shelters. “The causes can include addiction, mental health problems and the lack of good jobs, for example, and those are harder to fix,” she says.

While a lively conversation about these questions is going on in philanthropic circles, Putnam-Walkerly says the “systemic view is still a minority view. There’s a groundswell of support for this approach, but hardly a consensus.”

‘Anti-Business Values’?

There has also been a backlash against it. There are critics of corporate philanthropy per se, who believe, as the late Milton Friedman argued, that “the social responsibility of business is to increase profits.” That skepticism about social engagement seems reflected, for example, in an article in National Review  by Lisa B. Nelson of the American Legislative Exchange Council.

Nelson fears that as corporate America “takes pains to project a progressive public image,” it is being taken advantage of by “left-wing groups” hostile to capitalism itself. “Progressive organizations increasingly take corporate funding and then attack their benefactors in a never-ending bid to force their often anti-business values on fearful businesses,” she says.

A similar dissent is voiced, also in National Review, by Naomi Schaefer Riley of the Independent Women’s Forum and James Piereson, president of the William E. Simon Foundation. They too worry that foundations started by great industrialists, such as Andrew Carnegie, will be pressured into supporting efforts that “undermine the free markets that allowed their success.”

Riley and Piereson also fear that this shift as represented by the Ford Foundation statement is based on the assumption, as historian Alice O’Connor said in Nonprofit Quarterly, “that current-day capitalism — and the political power lines and cultural narratives that prop it up — is a big part of the problem.” O’Connor, who teaches at the University of California, Santa Barbara, is the author of Social Science for What?: Philanthropy and the Social Question in a World Turned Rightside Up.

These are serious concerns, but in the day-to-day operations of companies working with the communities where they do business, they do not pose insurmountable obstacles. Most companies seem confident that by being more effective organizations and helping address social problems, they are actually shoring up the capitalist system, rather than subverting it.

“I know a lot of corporate CEOs, and just because they are incorporating a ‘shared value’ approach to their organization’s philanthropic efforts, doesn’t mean they aren’t keeping a sharp eye on every dollar that is spent and making sure it is spent wisely,” says Peter Long, president and CEO of the Blue Shield of California Foundation. “Most corporate philanthropies I’m aware of are tightly aligned to the companies’ larger interests. Generally, the criticism has been that they are too tightly aligned.”

“I’ve never thought it’s an either/or,” says Leela Stake, a partner with FleishmanHillard, handling corporate social responsibility and global impact. “We’ve certainly seen a shift from back when a company’s philanthropic efforts meant giving to the favorite charity of the CEO’s wife. Back then, it was actually seen as somewhat inappropriate for a company to give to causes that might be aligned with its business interests.”

Employee Involvement

Today, Stake says, “the idea is for you to figure out how you can best leverage your company’s expertise to have the greatest impact. You want to add value so you aren’t just writing a check. You want the good you do to go beyond the dollars you give. You want to see a return in terms, for example, of employee involvement.”

A good example of leveraging expertise, Stake says, is UPS and its efforts on behalf of the Logistics Emergency Teams, a partnership with three of the world’s other largest transportation companies — Agility, Maersk and DP World — that provides pro bono services during large-scale natural disasters. “UPS uses its logistical expertise to act as first-responders all over the globe,” Stake says.

Working with Nonprofits

Stake sees the shift in thinking toward systemic change as “a good thing. It’s important to look beyond traditional areas of engagement and toward working with NGOs [nongovernmental organizations] on the underlying causes of some of these deep-rooted problems. There’s a lot of discussion about this, and I welcome it.”

At Best Buy, the company believes it is helping develop the sophisticated workforce the country needs, while strengthening Best Buy in the bargain. “Among the benefits to us,” she says, “is that by lending their expertise to the Teen Tech Center, our employees have a deeper engagement with the community and with the company itself. Through these programs, we are a company our employees can be proud of.”

Additional Resources

Social Issues of Concern to Business

Corporate Responsibility Benefits Continue to Build

Webinar: Where Does Philanthropy Fit in a Strategic CSR Program?