Philanthropy and innovation

Between paradigm change, efficiency and confidence
Photo © Christopher Streuli
Photo © Christopher Streuli
Marietta Bieri, traduction française Aude Elder, English translation Bethany Tew, traducción española Ana Beltran
28 April 2009

On 5th March 2009, ICVolunteers contributed to the organization of the annual Swiss Philanthropy Forum, held in Zurich, Switzerland. ICV's volunteers provided welcoming services and made sure the Forum would be well documented. They wrote reports and took photographs. The present article provides a synthesis of what was discussed.

Mrs. Zurkinden-Erismann, cofounder of StiftungsZentrum.ch GmbH and the forum organizer, placed an emphasis on two objectives: one is to propose ways for philanthropic foundations and socially responsible companies (Corporate Social Responsibility) to face the current crisis, the other is to create added value through transparency, durability, confidence, ethics and innovation. Seven guest speakers came to tackle four themes:

  • Should we question the current concepts of confidence, transparency, ethics, governance and fiscal privileges?
  • Is the philanthropic world open to innovations?
  • Who are the actors responsible for leading the debate on ethics and sustainable development?
  • What dilemmas does the philanthropic sector currently face?

Discussion Summary:

In light of the financial crisis which continues to bring states into massive debts, foundations must take charge of certain responsibilities usually assumed by states. They must thus enlarge their objectives by defending liberal society. They must also propose solutions to the problem of unemployment, maintain Switzerland’s highly-held position in research and invest in the necessary capital. Donors, after having proved their generosity, seek recognition and philanthropic projects thus often bear their name.

The creation of foundations with a public benefit has multiplied threefold over the last 13 years. Non-profit organizations often benefit from a larger trust-base than lucrative organizations. Yet this advantageous tendency is decreasing. Organizations must therefore develop their efficiency and adopt an approach closer to that of businesses. Foundations cannot survive without a good investment return!

Another issue dealt with was current consumption trends. According to a study carried out by the Gottfried Duttweiler Institute of ZĂĽrich, the consumption of luxurious products is giving way for a more responsible consumption: the public is spending more money on useful and long-lasting products and the demand for luxury items is going down. Driving a simple and functioning car is preferable to driving a status symbol. The mass market is dividing into niche markets and mega-trends are transforming into micro-trends. A luxury product to which no ethical, social, or ecological value is attached will sell less and less easily. A donor is likely to be more emotionally and socially involved in the project that he or she supports.

“Corporate citizenship” is about a business’ commitment to society and goes well beyond its economic objectives and legal obligations. It usually means private sponsorship, donations and business sponsors, but also the availability of collaborators for initiatives benefiting the public. The efficacy of “corporate citizenship” could be improved by an in-depth study of initiatives carried out by foundations and the social context within which they take place. Project impact could be improved through strategic partnerships. Foundations could focus their reflection on training which could be optimized by the concept of “venture philanthropy”, which supports and promotes the ideas of individuals or the application of ideas.

Sustainable development (UN Global Compact) has not produced the desired results: the rich are still rich and the poor are becoming poorer. It is the multinationals in which the public has least trust and so it is they who should now commit themselves to “social responsibility”. This commitment will force them to find legitimate and ethical solutions to current problems without simply thinking of their own profit. Indeed, no actor can sustain economic performance at a high-level and in the long-term if it lacks a commitment to responsibility. A business has duties to fulfill on three hierarchical levels going from obligatory to optional. A business must: follow regulations, conform to laws and make a profit; ought to: be socially responsible by respecting international norms; could: commit itself to philanthropy, propose innovations in line with competencies found within the business and avoid creating “me too” projects for which the goal is simply to do as others do.

Ethical considerations constitute the basis of a business’ credibility. Basic values, such as the golden rule of reciprocity, the balance between one’s own interests and the interests of others, working towards the common good, fairness and responsibility, should revive the public’s confidence as we face a crisis affecting trust and values. In a time where values are breaking down, human beings must recognize their roots.

A foundation can create pressure when it puts its creativity to use. To achieve this there must be calm, time for contemplation and the possibility to go in new directions. It is preferable for a foundation to be created during the founder’s lifetime in order to breathe life and soul into the organism and to give it an ultimate objective directed towards the future.

Three goals are to be considered when bringing sustainable investment politics into harmony with the foundation’s values. These are to make sure that financial performance is comparable to the benchmark; to obtain portfolios in the social and ecological domains; and to spark the process of improving corporate governance and its social and ecological engagement.

The meeting showed that philanthropy could be completely revitalized through gaining the commitment of leading organizations in charge of culture and business strategy. This could also apply to foundations and organizations pursuing goals of public benefit. Responsibility, creation of trust, basic values, innovation and sustainable governance were the principal themes of this meeting.

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