(Photography courtesy ExxonMobil: An intern helps students at Bernard Harris Summer Science Camp at Southern University that ExxonMobil brings to Baton Rouge each year.)
This fall, the Blue Cross and Blue Shield of Louisiana Foundation concluded a three-year grant called Challenge for a Healthier Louisiana, in which the foundation granted $10.2 million to 12 statewide projects that addressed one of Louisiana’s most pervasive and expensive problems, childhood obesity. In the Capital Region, those projects included the Mayor’s Healthy Cities initiative and BREC’s Capital Parkways Project. The BCBSLA Foundation’s approach is significant on several levels, and it portends just how much the landscape of corporate philanthropy is changing in the greater Baton Rouge area.
The project required grantees to create proposals that included numerous community partners who could work together to tackle obesity, a complex problem with no easy solution. In addition, grantees had to secure matching funds, ultimately raising an additional $16.8 million and bringing the total statewide impact of the grant to $27 million. Moreover, the project was conducted with help from the Pennington Biomedical Research Center, which served as an adviser to the BCBSLA Foundation in both design and evaluation. The results of Pennington’s evaluations, currently underway, could help shape future grantmaking by the foundation, and could also spark research opportunities among the center’s scientists as they grapple for workable methods to curb obesity.
It’s a far different approach than the days of detached corporate giving. More than ever, say corporate philanthropy managers and nonprofit executives, companies are more strategic about the causes they support, opting for a smaller number of causes with which they can make a tangible impact rather than the traditional scattershot approach.
In addition, the internal structure of corporate giving has changed as well, both nationally and in Baton Rouge. More companies, including about half of the country’s Blue Cross and Blue Shield affiliates and numerous other large corporations, have established their own foundations. Those foundations are not just interested in writing checks. In many cases they want to lend their expertise and help find solutions to nagging social issues.
Similarly, a growing number of smaller companies are established funds at community foundations, turning over the tedious administrative functions and gaining insight to strategic giving. One of the biggest areas of growth for the Baton Rouge Area Foundation has been its Corporate Advised Funds, including those established by Cox Communications, Community Coffee, Lamar Advertising and others.
“We can help manage the back end of the process, and that tends to be an attractive approach for many companies,” says BRAF President and CEO John Davies. “At the end of the day, they have a clear idea whom they want to give to and they still make those decisions.”
Michael Tipton, the BCBSLA Foundation’s president, says the foundation allows the corporate Blue Cross and Blue Shield of Louisiana to devote more time to strategy. The company and its employees still have their own community involvement projects, but the foundation can take on the big picture.
“Companies like ours are doing a lot of good in the day-to-day work they do, but there’s a growing interest among many that it’s good to develop a clear and long term approach to tackling larger issues,” he says.
It’s part of a growing trend in which companies are identifying specific areas of focus that are aligned with mission and brand.
In the case of ExxonMobil, one of the greater Baton Rouge area’s most significant corporate givers, donations have become more targeted. Internationally, the company gives primarily to three causes, education (notably STEM fields), malaria prevention and economic opportunities for women.
Philanthropic donations to Baton Rouge charities from the ExxonMobil Foundation and the company’s employees and retirees total nearly $5 million annually.
“In Baton Rouge, ExxonMobil works with nonprofits to identify potential partnerships that align with the foundation’s focus on education and support local needs in workforce development,” says Stephanie Cargile, ExxonMobil public and government affairs manager. “We also invest in social programs that enhance the quality of life, health and environment of north Baton Rouge, the nearby neighborhood. More than 60 percent of our local investments are focused on sustainable, strategic education and workforce development programs.”
Just as it is across the country, STEM education is a big objective for ExxonMobil Baton Rouge, says Cargile. In 2007, ExxonMobil gave $125 million to help create the National Math and Science Initiative, which aims to improve math and science education in the U.S. by better preparing students and teachers in STEM—science, technology, engineering and math—fields.
The strategy to focus on STEM helps ExxonMobil check several corporate social responsibility boxes. It helps close the gap on STEM education in the U.S. at a time when math and science are considered an international language, Cargile says. And it also grows the number of capable future engineers and scientists, some of whom could be employed by ExxonMobil. In Baton Rouge, it also allows the company to showcase its long-term commitment to public education.
“NMSI replicates proven programs with quantifiable results on a national scale,” Cargile says. “NMSI programs are currently in 29 states, including Louisiana.”
Those programs are the Advanced Placement programs at Baton Rouge Magnet High and McKinley High schools, GeauxTeach at LSU and Laying the Foundation, a program in which 350 Baton Rouge public school teachers received NMSI training.
WHY THEY GIVE
Corporate giving has been down in the United States since 2008, but companies generally remain motivated to support causes for a number of reasons, says LSU E. J. Ourso College of Business Professor of Management Jean McGuire.
“It can be employee driven, where you see a company building playgrounds or something that is important to the employees. There are tax advantages. And it’s also about reputation management,” McGuire says. “Corporate social responsibility is a form of insurance. You might not expect immediate gains, but if there’s a major incident, you’ve spent time building your reputation in the community.”
Pinning down actual return on investment is harder.
“It is extremely difficult to link corporate philanthropy to any sort of financial outcome,” McGuire says. “The research is mixed, but on the whole, there is very limited profit return.”
Nevertheless, say marketing experts, there are good reasons to support social causes—especially ones that have been thoughtfully selected.
“We know that there are times when product line influences a company’s support of a particular cause,” says Kelly Pepper, president & CEO of the Louisiana Association of Nonprofit Organizations, or LANO. “For example, ‘pharma’ might look to health fields. Abita Beer raised money for hurricane relief through Restoration Pale Ale, and Mignon Faget raised funds for the Coalition to Restore Coastal Louisiana through its pelican necklace. These are cases where it adds that human element to the corporate image, and it’s a good thing for everyone.”
Moreover, says Jennifer Boneno, director of account services at the communications firm Zehnder, many modern consumers simply make decisions based on a company’s civic involvement.
“Today, you’ve got to be doing something,” she says, “because if a consumer is looking at two companies and all things are equal, they’ll opt for the one that’s engaged in the community.”
Boneno says companies should start by examining their brand and their business values.
“You need to ask, ‘What do we stand for, and how do we fit into the community?’” she says. “If you’re into a little bit of everything, that’s not really making a difference because you’re not aligning your brand with a cause that, in the end, helps you get more customers and makes you stand out because you’re doing something for the greater good.”
Surveying employees and the customer base about what causes they care about can be a good place to start, Boneno says.
Pinpointing the right cause, she notes, is like finding the “sweet spot.” When it’s something bread-and-butter customers care about, it shows a company is listening, she says. When employees care about the issue, it helps with retention, especially among millennials who often change jobs based on an employer’s level of community engagement.
“As the economy improves and as the job market improves, it gives a group like millennials the opportunity to opt for a company that’s doing good in the community,” McGuire says.
TAILORING ‘THE ASK’
As companies have changed their methods of giving, nonprofit organizations have had to adjust. Funding pitches must be more strategic—both in building a relationship with a company and its brand, and demonstrating a return on the investment.
“When they approach a potential corporate donor, it’s important for a charity to ask, ‘How is giving to my cause beneficial to this business?’” says Christy Reeves, interim CEO of the national nonprofit Single Stop and former president of the BCBSLA Foundation. “Nonprofits have to go beyond just sharing logos with donors, and really take time to discover how particular programs and benefit both funders and the community.”
Pepper agrees. “Meeting the needs of your donor is important,” she says. “You have to take care of that donor relationship and be sure they’re getting what they need.”
In the case of one of LANO’s donors, Capital One, that need is in building capacity among grantees to which Capital One gives money each year. Pepper says Capital One contracts with LANO to help train these nonprofits to leverage donations and think more strategically about long-term problem solving. The company is interested in not only giving to certain charities, but in seeing those charities get better at what they do, Pepper says.
One of the community’s largest nonprofits, the Capital Area United Way, is also adjusting to a new era in which companies and employees want more freedom of choice in giving, acknowledges CAUW President and CEO Darrin Goss. For example, millennials are less inclined to lock into payroll deduction, an historic funding stream for United Ways nationwide. Millennials are also more inclined to be moved by a particular issue rather than a specific nonprofit, and that issue could be global rather than local.
These trends, along with the growing perception of the United Way as a middle man and not a change agent, have kept its fundraising stagnant. The organization’s annual campaign, which generated $9.8 million this year, hasn’t grown substantially in recent years, especially compared to the growth of the Baton Rouge Area Foundation. BRAF’s assets jumped from $5 million in 1988 to $550 million in 2015, and the foundation grants roughly $30 million a year, says Director of Communications Mukul Verma.
In response, Goss says the United Way is in the middle of a major culture change to ensure it creates “shared value” between nonprofits and the corporate community. The organization has a long history of funding local charities, and is now diving deep on top social issues that impact Baton Rouge. It will begin measuring its grantees according to their progress in moving in the needle on these issues, Goss says.
The executive notes the United Way is positioning itself to serve as a consultant to businesses and corporations that want to take a strategic approach to charitable giving.
“We really see ourselves as sitting at the intersection of understanding the needs and understanding who is operating in the nonprofit and public sectors to address those issues,” Goss says. “Companies want to give, but don’t necessarily have the intense understanding of the issues. We want to not only engage companies in giving, but educate them about the ecosystem of social issues.”