Building the Appropriate Structure
strategies to achieve social impact
Structural Models
Companies have several options to consider when developing their
structural model:
•Corporate Foundation
•Corporate Giving Program
•Community Foundation
Many companies use a combined approach – a corporate giving program
might focus on donations that might be perceived as self-dealing under
foundation rules such as event tickets, or marketing-related approaches; the
foundation might focus on the primary program areas.
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Structural Models
The following provides some background information on the different models
Corporate
Foundation
Corporate Giving
Program
Community
Foundation
Governance
Board of
Directors usually made up of
senior executives
Decision-makers can be
employees on a committee;
large grants may be decided
by senior management
Governing committee
represents broad interests of
public rather than private
interests of donors
Cost is part of company’s
annual operating expenses.
Expenses
Staffing expenses paid by
company; must file annual tax
return; exempt from sales tax
Expenses are shared by
multiple donors; fees
charged for services may be
based on percentage of the
value of the fund
Legal
Separate legal entity; subject to
self-dealing regulations;
donations made by company to
foundation are subject to 10%
annual limit
Expenses deducted as
donations are subject to 10%
annual limit set by IRS.
Since the legal apparatus of
a community foundation is in
place, a company’s fund is
tax-exempt
Image &
Positioning
May project higher commitment
to social issues; endowment
can enable consistent support
even in difficult economy
Can often be influenced by
multiple stakeholder needs;
strong governance needed to
develop strategic programs
Perception could be that
company does not value the
function enough to support it
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Structural Models
Pros and cons of a corporate foundation*
Pros
Cons
Ensures a more consistent approach and greater
ability to build long-term programs
No privacy and the company is subject to private
foundation disclosure laws. No ability to combine
marketing and philanthropy dollars providing less
flexibility
Provides some protection to management from
criticism about funding decisions (depending on
how it is set up)
The self-dealing rule can be problematic for
corporate foundations. Corporate giving programs
are often set up to allow more flexibility in giving
and to eliminate self-dealing conflicts.
Some companies use the foundation as a tool to:
1) fund items they normally would not fund for
political reasons; 2) to get outsiders on the Board
or employees – thus helping with company loyalty;
3) to support an employee matching fund; 4) as a
buffer and one stop shop to refer grant seekers to.
Additional paperwork and administrative
expenses, which include filing incorporation
papers, keeping records, filing 990PFs,
developing bylaws, giving guidelines, etc.
Additional staffing may also be needed.
Can pay matching gifts with no need for
acknowledgements from nonprofits for IRS
purposes
Must follow the 5% payout rule and has the same
rules as any foundation of giving only to 501c3
groups or exercising expenditure responsibility
*Source - San Diego Grantmakers website: Pros and cons of corporate foundations
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Structural Models
 Decentralized Model
 Centralized Model
 Hybrid Model
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Structural Models
Benefits of the different models:
Centralized
Decentralized
• Provides strong controls on all grantmaking
• Engages local managers in grantmaking
• Allows for more efficiency of program, staff, and
processes
• Responds to local needs
• Ensures a consistent and clear focus for
grantmaking
• Empowers employees
• May facilitate larger and more impactful grants
• May support local business needs
• Creates capacity to leverage other corporate
resources
• Creates capacity to leverage local office
resources
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Decentralized Model
In a decentralized model, each region makes grants according to
needs/expectations of priority stakeholders.
Local
Office
Local
Office
HQ
Local
Office
Local
Office
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Centralized Model
In a centralized model, HQ determines strategic priorities and regional
offices follow guidelines provided by HQ.
Local
Office
Local
Office
HQ
Local
Office
Local
Office
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Hybrid Model
In a hybrid model, HQ determines strategic priorities, but local offices
have flexibility to align with corporate priorities and to address regional
stakeholder needs.
Local
Office
Local
Office
HQ
Local
Office
Local
Office
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Governance
A critical issue for any model relates to governance: how can the internal
governance structure be designed to ensure the development of strategic
programs, the leveraging of internal resources, and the ability to move quickly
and nimbly. Specifically, a governing body should have:
•
•
•
•
•
A structure that enables the corporation
to take advantage of opportunities
quickly
Responsibility for approving corporate
giving policies, procedures and budgets
– including those of the foundation (if
one exists)
Members who can manage sensitive
issues, anticipate crises, and develop
response strategies
Members who understand the
demographics and dynamics of the
community
Access to the CEO, senior management
and community resources
Decision-making
body
Advisory/Steering
Committee
Corporate
Giving Staff
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Staff Skill Requirements
Corporate giving staff need a range of skills to effectively develop and
manage corporate giving programs. Specifically, corporate giving staff
must be able to:
•Understand the business and develop a strategic vision that meets the
rising expectations of stakeholders
•Engage and build relationships with a wide range of stakeholders –
from senior leaders to managers to priority external stakeholders
•Build systems and develop a framework for capturing results for a
variety of programs and at varying levels for stakeholders
•Develop communication systems that educate and update all
stakeholders
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Corporate Giving Competencies & Skills
Focus
Competency/Skill
Integrated
Philanthropy
• Knowledgeable of all CSR and community-related activities; lead
strategic development of philanthropic programs, approach
• Participate in cross-departmental teams for stronger coordination
and information sharing
• Structurally able to report to and receive feedback from
Leadership/Executive Team
Stakeholder
Engagement
• Coordinate opportunities to inform and involve internal
stakeholders in philanthropy and with nonprofit partners
• Present philanthropy updates to external stakeholders
• Engage internal and external stakeholders in development of
new philanthropy programs
Measuring
Outcomes
Reporting
Comprehensively
• Understand what’s measureable and implement mechanisms to
capture outcome-related data
• Understand company’s CSR reporting standards/codes and what
philanthropy can contribute
• Report regularly to stakeholders and to the public in a variety of
formats (on-line, fact sheets, etc.)
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Corporate Giving Competencies & Skills
Adaptive Capacity: The ability to monitor, assess, and
respond to internal forces within the company and external
changes in the operating environment
Leadership Capacity: The ability of department leader(s) to
create and sustain strong relationships with key stakeholders,
educate and inspire others, prioritize goals, garner resources for
the department, and provide direction on programs
Management Capacity: The ability to develop and run
successful programs
Operational Capacity: The ability to carry out key
departmental and programmatic functions
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Adaptive Capacity
Alignment and integration with business
• Connections to other key departments (marketing, government relations,
CSR, HR, etc.)
• Alignment with related firm efforts (i.e. CSR goals)
Continuous monitoring of internal forces and external trends
• Awareness of major company goals and plans
• Understanding of external operating environment (i.e. economy)
• Monitoring of trends and best practices in the field of corporate
community involvement
• Ongoing evaluation of programs
Knowledge of key players
• Strategic alliances formed with community groups and key opinion
leaders
• Strategic alliances within the company
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Assessing Adaptive Capacity
Alignment and integration with business
• Is there a system in place for the CCI department to interface and work
with related departments (HR, CSR, Public Affairs, Gov’t Relations)
• Does the CCI department have a clear understanding of the goals and
major programs of these departments and other key business units?
Continuous monitoring of internal forces and external trends
• Does the CCI department stay up to date on major company goals and
plans (i.e. expansion, new products, etc.)?
• To what extent are department leaders aware of major trends in the
economy or market that will affect the company in the near and long
term?
• How often does the department evaluate programs and does it use that
information for planning and continuous improvement?
Knowledge of key players
• Does the department know who they should be getting input from within
the company? Outside the company?
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Leadership Capacity
Internal leadership
• Strong relationships with internal stakeholders
• Direct communication lines with senior leadership of company
• Ability to bring resources and attention to departmental goals and
efforts
• Ability to set and carry out a strategic vision for the department
and inspire staff
External leadership
• Strong relationships with external stakeholders
• Ability to prioritize key stakeholders for different initiatives
• A network of other CCI leaders to learn from and benchmark
against
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Assessing Leadership Capacity
Internal leadership
• What percentage of his/her time does the department leader or
leaders spend on creating and maintaining relationships with key
internal stakeholders?
• How often does the department leader talk directly with the CEO
or top senior management of the company? Under what
circumstances?
• Can all members of the department articulate the vision for CCI
for the next 1 to 3 three years?
External leadership
• How much of his/her time does the department leader spend on
developing relationships with key external stakeholders?
• To what extent does the department leader(s) have a network of
CCI professionals with which to share and learn best practices?
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Tools and Resources
strategies to achieve social impact
Resources
• Corporate Giving, Options and Strategies, by Sylvia Clark
and Kate Dewey, Council on Foundations, 2008
• TCC Website - www.tccgrp.com – briefing papers and
presentations
• Weathering the Storm, The State of Corporate Citizenship
in the United States 2009, Boston College Center for
Corporate Citizenship, www.bccorporatecitizenship.org
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