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02 Oct. 2018 | Comments (0)
Earlier this year, Wells Fargo pledged to give $400 million to nonprofits in 2018—a 40 percent increase from last year. Beginning in 2019, the company plans to invest 2 percent of its after-tax profits on corporate philanthropy. To put this in perspective, the initial findings from Giving in Numbers 2018 reveal a median total giving—including cash and non-cash contributions—for all companies of $19.2 million. Even the top 25 percent of companies contribute a median of $55.3 million, about half of which comprises cash. Wells Fargo’s commitment dwarfs these numbers. In this Q&A, Jon R. Campbell, President of the Wells Fargo Foundation and EVP of Corporate Philanthropy and Community Relations discusses the decision to make such a large contribution.
As outlined above, the company’s commitment in 2018 and 2019 is far above the norm. How did Wells Fargo decide to contribute such a significant amount to the community?
At the end of 2017, at the time of the federal tax break, we saw an opportunity to increase our investment in economic growth by taking our philanthropic impact to the next level. We established a commitment for the Wells Fargo Foundation to deliver $400 million to nonprofits in 2018, a 40 percent increase, and are currently on track to exceed that goal. We were already the second-largest cash donor in the U.S., based on recent survey findings from the Chronicle of Philanthropy, and we wanted to do even more to create meaningful change, especially in lower-income and underserved communities. At the same time we set our 2018 goal, we began having internal conversations with senior leaders about our giving strategy and budget for 2019 and beyond. Internally, there is a desire to more directly link our philanthropy to profits and to grow both over time. I actually offered a range of after-tax profit percentages to consider, based on our own research of what leading companies give. Our CEO, Tim Sloan, made the decision to set a goal of 2 percent of after-tax profits going to philanthropy, which was at the highest end of the range within the business community.
How long does the company plan to sustain this level of giving?
I don’t have a crystal ball but I’m confident that philanthropic giving will always be a big part of Wells Fargo’s legacy. We have such a long track record of being involved in local communities—going back more than 100 years—and I believe philanthropy will be a cornerstone for a long time to come. We’ll measure our success not only by how much we give but also by the impact it has in the communities in which we live and do business. And, we will continue to give with sweat equity through volunteer hours, jumping in to make a difference alongside community leaders and nonprofits where we live and work. In my opinion, communities need us, all of us in the private sector, more than ever right now.
How influential was the company’s senior leadership in driving the corporate philanthropy strategy in this direction?
You absolutely must have the genuine commitment of senior leadership for philanthropy to flourish in a company. In our case, CEO Tim Sloan personally weighed in on our priorities and giving targets and it was a collective effort to present this approach for board approval. But I would say, just as important as C-suite and board involvement is the role your employees play in carrying out the strategy. At Wells Fargo, we encourage our team members to be actively involved in the causes they care about and provide a variety of opportunities to support community service and volunteerism, including two paid volunteer days each year. We’re more than 265,000 team members strong—and over 90,000 of them participate in one or more Volunteer Chapters, Green Teams or Team Member Networks. We spend a lot of energy internally talking about our philanthropy strategy, so team members can embrace a sense of shared responsibility in caring for communities and getting our resources to places in need.
Are there particular areas that the company will target with its giving?
Our philanthropic giving includes a mix of corporate donations directed by the Wells Fargo Foundation, and nonprofit donations driven by our local markets and teams. At the enterprise-level, we align our giving to three areas: diversity and social inclusion, economic empowerment, and environmental sustainability. At the local level, we look to reinforce these three key pillars but also recognize that every community has its own needs. So, our model enables local team members to direct a portion of funding to what is most pressing in their market. Overall, some of the issues we focus most intently on are access to education, financial capability, affordable housing, job readiness, small business growth and sustainability.
What barriers does the company need to overcome to ensure that the contributions create impact? What is the company’s strategy for measuring impact?
Our CSR strategy really began to take shape ten years ago, when the merger between Wells Fargo and Wachovia brought together legacy approaches from each company. Ever since, we’ve been evolving—enhancing governance, process, controls, and priorities. As part of our transformation, we moved a significant portion of the Wells Fargo Foundation budget to the enterprise level in the name of more effective and impactful philanthropic giving. Measuring impact is something we discuss nearly every day. Many nonprofits are measuring where the dollars go, but we want to go beyond tracking scale. And very often impact is something more human, more connected to how you are changing someone’s daily life or a sense of economic stability in a community. So, we are currently exploring everything from software tools where you can customize metrics to nonprofit capacity building as a better way to capture impact. Like our community giving, measurement is a journey.