Advertisement

Strategic in What Sense? Corporate Foundation Models in Terms of Their Institutional Independence and Closeness to Core Business

  • Steffen Bethmann
  • Georg von Schnurbein
Chapter
Part of the Nonprofit and Civil Society Studies book series (NCSS)

Abstract

With the growing number of corporate foundations and their increasing visibility as philanthropic actors, interests are raised regarding the way these corporate foundations function as well as about the nature of their relationship with the founding company. The foundation literature generally assumes that a foundation’s ability to create social impact and innovation rests to a large part on their independence from external control. However, corporate foundations are dependent to varying degrees on the support of their founding company. Therefore, apparent tensions between corporate control and the freedom a foundation needs to maximize its impact exist. In this chapter, we look at the special relationship between the two entities. Based on an exploratory study, we build ideal types of foundations in relation to their institutional independence. We then test and refine these through data gathered at the first European meeting of corporate foundations. The findings allow us to distill pull and push factors that lead to a stronger alignment of corporate goals and foundation activities. The ideal types show that full independence is not necessarily the best option, as corporate foundations can benefit greatly from corporate resources in achieving their social mission.

Keywords

Corporate foundations Mixed methods Typology (In)dependence Strategy 

References

  1. Aakhus, M., & Bzdak, M. (2012). Revisiting the role of “shared value” in the business-society relationship. Business & Professional Ethics Journal, 31(2), 231–246.CrossRefGoogle Scholar
  2. ACF, Association of Charitable Foundations. (2016). Good practice guide. London: Association of Charitable Foundations.Google Scholar
  3. Anheier, H. K., & Leat, D. (2006). Creative philanthropy. New York: Routledge.Google Scholar
  4. BDS, Bundesverband Deutscher Stiftungen. (2010). Grundsätze guter Stiftungspraxis. Berlin: Bundesverband Deutscher Stiftungen.Google Scholar
  5. Bethmann, S., von Schnurbein, G., & Studer, S. (2014). Governance systems of grant-making foundations. Voluntary Sector Review, 5(1), 75–95.CrossRefGoogle Scholar
  6. Billis, D. (Ed.). (2010). Hybrid organizations and the third sector: Challenges for practice, theory, and policy. New York: Palgrave Macmillan.Google Scholar
  7. Bishop, M., & Green, M. (2008). Philantrocapitalism. How the rich can save the world. London: Bloomsbury Press.Google Scholar
  8. Boesso, G., Cerbioni, F., Menini, A., & Parbonetti, A. (2015). Philanthropy by decree. Nonprofit Management & Leadership, 25(3), 197–213.CrossRefGoogle Scholar
  9. Brammer, S., & Millington, A. (2005). Corporate reputation and philanthropy: An empirical analysis. Journal of Business Ethics, 61(1), 29–44.CrossRefGoogle Scholar
  10. Brest, P., & Harvey, H. (2008). Money well spent. A strategic plan for smart philanthropy. New York: Bloomberg Press.Google Scholar
  11. Bruch, H., & Walter, F. (2005). The keys to rethinking corporate philanthropy. MIT Sloan Management Review, 47(1), 49–55.Google Scholar
  12. Campbell, D., & Slack, R. (2008). Corporate “philanthropy strategy” and “strategic philanthropy”: Some insights from voluntary disclosures in annual reports. Business & Society, 47(2), 187–212.CrossRefGoogle Scholar
  13. Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, 34(4), 39–48.CrossRefGoogle Scholar
  14. Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, 12(1), 85–105.CrossRefGoogle Scholar
  15. CC, Charity Commission. (2010). Guide for corporate foundations. London: Charity Commission.Google Scholar
  16. Ćwik-Obrębowska, N., Pękacka, M., & Tomaszewska, A. (2015). Standards for corporate foundations. Warsaw: Polish Donors Forum.Google Scholar
  17. DiMaggio, P. J., & Powell, W. W. (1983). The Iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.CrossRefGoogle Scholar
  18. Eckhardt, B., Jakob, D., & von Schnurbein, G. (2017). Der Schweizer Stiftungsreport 2016, CEPS Forschung und Praxis, Bd. 11,. Basel: CEPS.Google Scholar
  19. Eisenhardt, K. M. (1989). Building theories from case study research. The Academy of Management Review, 14(4), 532–550.CrossRefGoogle Scholar
  20. Eisenhardt, K.M., Graebner, M.E. (2007): Theory Building From Cases: Opportunities and Challenges. In: The Academy of Management Journal, 50(1), S. 25–32.Google Scholar
  21. Fama, E., & Jensen, M. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301–325.CrossRefGoogle Scholar
  22. File, K. M., & Prince, R. A. (1998). Cause related marketing and corporate philanthropy in the privately held enterprise. Journal of Business Ethics, 17(14), 1529–1539.CrossRefGoogle Scholar
  23. Fleishman, J. L. (2007). The foundation. A great American secret. New York: Public Affairs.Google Scholar
  24. Foster, M. K., Meinhard, A. G., Berger, I. E., & Krpan, P. (2009). Corporate philanthropy in the Canadian context. Nonprofit and Voluntary Sector Quarterly, 38(3), 441–466.CrossRefGoogle Scholar
  25. Friedman, M. (1970). The social responsibility of business is to increase its profits. The New York Times Magazine, 13 September SM17.Google Scholar
  26. Frooman, J. (1999). Stakeholder influence strategies. Academy of Management Review, 24(2), 191–205.CrossRefGoogle Scholar
  27. Frumkin, P. (2006). Strategic giving. Chicago: The University of Chicago Press.CrossRefGoogle Scholar
  28. Gadberg, N., & Fombrun, C. (2006). Corporate citizenship: Creating intangible assets across institutional environments. Academy of Management Review, 31(2), 329–346.CrossRefGoogle Scholar
  29. Gautier, A., & Pache, A. C. (2015). Research on corporate philanthropy: A review and assessment. Journal of Business Ethics, 126(3), 343–369.CrossRefGoogle Scholar
  30. Gerring, J. (2009): Case study research. Principles and practices. Cambridge, Mass.: Cambridge University. Press.Google Scholar
  31. Hammack, D. C., & Anheier, H. K. (2013). A versatile American institution: The changing ideals and realities of philanthropic foundations. Washington, DC: Brookings Institution Press.Google Scholar
  32. Haski-Leventhal, D., Roza, L., & Meijs, L. C. (2017). Congruence in corporate social responsibility: Connecting the identity and behavior of employers and employees. Journal of Business Ethics, 143(1), 35–51.Google Scholar
  33. Kania, J., Kramer, M., & Russel, P. (2014). Strategic philanthropy for a complex world. Stanford Social Innovation Review, 19(2), 26–37.Google Scholar
  34. Kasper, G., & Fulton, K. (2006). The future of corporate philanthropy: A framework for understanding your options. Cambridge: Monitor Institute.Google Scholar
  35. Kramer, M., Pfitzer, M., & Jestin, K. (2006). Uncommon partners: The power of foundation and corporation collaboration. Working paper no 21 of the Corporate Social Responsibility Initiative. Cambridge, MA: John F. Kennedy School of Government, Harvard University.Google Scholar
  36. Lantos, G. P. (2001). The boundaries of strategic corporate social responsibility. Journal of Consumer Marketing, 18(7), 595–632.CrossRefGoogle Scholar
  37. Leat, D. (2016). Philanthropic foundations. In Philanthropic foundations, public good and public policy. London: Palgrave Macmillan.CrossRefGoogle Scholar
  38. Liket, K., & Simaens, A. (2015). Battling the devolution in the research on corporate philanthropy. Journal of Business Ethics, 126(2), 285–308.Google Scholar
  39. Marquis, C., & Lee, M. (2013). Who is governing whom? Executives, governance, and the structure of generosity in large U.S. firms. Strategic Management Journal, 34(4), 483–497.CrossRefGoogle Scholar
  40. Morvaridi, B. (2012). Capitalist philanthropy and hegemonic partnerships. Third World Quarterly, 33(7), 1191–1210.CrossRefGoogle Scholar
  41. Nielsen, W. A. (1972). The big foundations. New York: Columbia University Press.Google Scholar
  42. Pedrini, M., & Minciullo, M. (2011). Italian corporate foundations and the challenge of multiple stakeholder interests. Nonprofit Management & Leadership, 22(2), 173–197.CrossRefGoogle Scholar
  43. Petrovits, C. (2006). Corporate-sponsored foundations and earnings management. Journal of Accounting and Economics, 41(3), 335–362.CrossRefGoogle Scholar
  44. Porter, M. E., & Kramer, M. R. (1999). Philanthropy’s new agenda: Creating value. Harvard Business Review, 77, 121–130.Google Scholar
  45. Porter, M. E., & Kramer, M. R. (2002). The competitive advantage of corporate philanthropy. Harvard Business Review, 80, 57–68.Google Scholar
  46. Rey-García, M., Martín, C. J., Álvarez, G., & Luis, I. (2012). Assessing and advancing foundation transparency: Corporate foundations as a case study. The Foundation Review, 4(3), 77–89.CrossRefGoogle Scholar
  47. Saiia, D. H., Carroll, A. B., & Buchholtz, A. K. (2003). Philanthropy as strategy: When corporate charity ‘begins at home’. Business and Society, 42(2), 169–201.CrossRefGoogle Scholar
  48. Sanchez, C. M. (2000). Motives for corporate philanthropy in El Salvador: Altruism and political legitimacy. Journal of Business Ethics, 27(4), 363–375.CrossRefGoogle Scholar
  49. Smith, C. (1994). The new corporate philanthropy. Harvard Business Review, 72(3), 105–114.Google Scholar
  50. Smith, S. R. (2016). Hybridity and philanthropy. In T. Jung, S. D. Phillips, & J. Harrow (Eds.), The Routledge companion to philanthropy (pp. 322–333). New York: Routledge.Google Scholar
  51. Sprecher, T., Egger, P., & von Schnurbein, G. (2015). Swiss Foundation Code 2015. Grundsätze und Empfehlungen für Förderstiftungen. Foundation Governance, Band 11. Basel: Helbing & Lichtenhahn.Google Scholar
  52. Thorne McAlister, D., & Ferell, L. (2002). The role of strategic philanthropy in marketing strategy. European Journal of Marketing, 36(5/6), 689–705.CrossRefGoogle Scholar
  53. Urriolagoitia, L., & Vernis, A. (2012). May the economic downturn affect corporate philanthropy? Exploring the contribution trends in Spanish and U.S. companies. Nonprofit and Voluntary Sector Quarterly, 41(5), 759–782.CrossRefGoogle Scholar
  54. von Schnurbein, G. (2009). Foundations as honest brokers between market, state, and nonprofits through building social capital. European Management Journal, 28(6), 413–420.CrossRefGoogle Scholar
  55. von Schnurbein, G., Seele, P., & Lock, I. (2016). Rethinking the nexus of CSR and corporate philanthropy. Social Responsibility Journal, 12(2), 280–294.CrossRefGoogle Scholar
  56. Werbel, J. D., & Carter, S. M. (2002). The CEO’s influence on corporate foundation giving. Journal of Business Ethics, 40(1), 47–60.CrossRefGoogle Scholar
  57. Westhues, M., & Einwiller, S. (2006). Corporate foundations: Their role for corporate social responsibility. Corporate Reputation Review, 9(2), 144–153.CrossRefGoogle Scholar
  58. Weber, M. (2002). Wirtschaft und gesellschaft: Grundriss der verstehenden Soziologie. Mohr Siebeck.Google Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  • Steffen Bethmann
    • 1
  • Georg von Schnurbein
    • 1
  1. 1.Center for Philanthropy Studies (CEPS), University of BaselBaselSwitzerland

Personalised recommendations