Long Read

A confluence of impact: Why companies must shift course to bring different social investment streams together

Some of the most innovative companies and their corporate social investors are demonstrating a new, collective approach to impact – one that might herald a significant shift in how big firms use their wealth, expertise and influence to “do good” for society and the planet, according to new research from EVPA.

A confluence of impact: Why companies must shift course to bring different social investment streams together
Pedro Pardo, AFP, Getty Images

When two great rivers come together – as with the Rhone and the Arve in Geneva, Switzerland – they may be flowing in the same direction, but it can take quite some time for the different waters to combine.

Where the dark-coloured Rio Negro and sandy-shaded Rio Solimoes join up in Brazil, for example, the rivers’ waters run side by side without mixing for almost four miles. It’s a similar story for the Ohio and Mississippi rivers where they join in Illinois, USA.

Current practice in corporate social investment is much like the confluence of rivers. Some of the world’s most powerful and innovative corporations are often running both corporate responsibility activities and programmes delivered by their corporate foundations side by side, flowing in the same direction.

Like the Brazilian rivers, blending the two can take time and doesn’t always seem natural. But research by the European Venture Philanthropy Association (EVPA) indicates that those corporates that manage to make their different activities work in a more complementary way can also deliver greater or deeper impact.

Innovative corporations are running both corporate responsibility activities and programmes delivered by their corporate foundations side by side.

“Over the years, we at EVPA have observed that more corporate foundations and companies are setting up additional corporate social investors (CSIs) – for example, a corporate impact fund next to a corporate foundation. Yet, little was known about the underlying strategic motives for doing so,” said Karoline Heitmann, EVPA’s corporate initiative manager. “For that reason, we started new research to unravel key questions around when, why and how companies and CSIs would choose to set-up additional CSIs and how this influences their social impact.

“Speaking to numerous companies like Danone, Schneider Electric, IKEA and their corporate social investors, it became apparent that they are moving towards a more holistic approach to address complex societal problems. By pursuing complementary impact strategies, they can enhance the scope, scale and/or depth of their impact.”

What these different, complementary impact strategies are and how they can help to accelerate social impact will be presented in detail at the C Summit, the annual conference for corporate social investors and philanthropists. Entitled Think Tomorrow Today – A New Era of Collaboration, the virtual event, co-organised by EVPA and DAFNE, the Europeran donor and foundations network, takes place on 3-4 December and aims to explore the strategies, solutions and collaborations that will shape the future of Europe in the longer term.

EVPA’s research follows on from its study of ‘strategic alignment’ – which means the mutual arrangement between a corporate social investor (such as a foundation or impact fund) and its affiliated company with the goal of enhancing social impact. The topic has gained a great deal of momentum during the past year.

Following engagement with 45 practitioners from across the corporate social investment space, EVPA developed a set of definitions for the different ways in which this ‘alignment’ takes place place, followed by a guide to help corporates and corporate social investors decide the option that could best maximise their impact.

Kirsten Ottens, director at the ING Netherlands Foundation, said the idea of “combining multiple corporate impact structures” was “still a novelty but it is advancing”. She said the C Summit would present an opportunity “to hear from the frontrunners and discuss the pros and cons” but also to take a step back and be more strategic. “Most of us fall into the trap of working on what is urgent instead of focusing on what is important,” she said.

Margot Cooijmans, executive director at Amsterdam-based Philips Foundation, acknowledged that the pandemic had temporarily delayed the long-term approach to investment and instead focused activity on urgent interventions. But, she added: “We have tried to ‘think tomorrow’ even during the rapid response, by including disaster resilience, information sharing and long-term testing facilities in our donation programme.”

She said that “outside of the Covid reality”, her foundation’s aim was to help develop new, affordable and replicable solutions by social entrepreneurs and “agile NGOs” that could “help scale access to care”. There was also a particular drive to explore potential coalitions within and among corporates to support the Sustainable Development Goals. “In our case: can we team up to achieve something big in reducing healthcare inequality?” she said.

Ottens said the ING Netherlands Foundation had long-term partnerships with 25 social entrepreneurs, among whom were organisations that were either unaffected by Covid, saw new opportunities, lost market income or lost donors. Its support to these during the pandemic has been tailored according to their financial health and their sector. “It is a time-consuming method but we believe that we make the most impact with our ‘support budget’ with this approach and at the same time strengthen the relationship between investor and investee,” she said.

Article originally published by Pioneers Post (link)