03 Jun. 2014 | Comments (0)
In her latest book, A Better World, Inc.: How Companies Profit by Solving Global Problems…Where Governments Cannot, Alice Korngold shows companies and their executives how to profit from developing solutions to the world’s most daunting challenges—those that governments cannot and have not addressed.
Effective partnerships between companies and nonprofits are a crucial element of this effort, and Korngold has years of experience in helping both parties forge these relationships. She kindly responded to my questions about the book and about where corporate philanthropy fits.
Q: A lot of your work regards forming better partnerships between companies and nonprofits. Why are these partnerships so important, and how does each group mutually benefit from collaboration?
A: It is unprecedented for businesses and nonprofits to be collaborating to the degree we are today. As a result, we have a tremendous opportunity to optimize results in solving vital problems. Multinational corporations bring vast resources, their global footprint, and their profit motive to drive global problem solving. Nonprofits bring an earnest focus on mission, in addition to decades of expertise, credibility, and deep relationships in communities that companies seek to better understand and reach. This is a powerful combination!
Q: Can you discuss some of the ways that companies and nonprofits collaborate to solve global problems?
A: There are a number of examples that vary from simply providing funding or technical expertise to more formal partnerships that foster economic development in emerging markets. First, PYXERA Global is a Washington, DC-based nonprofit that assists 27 multinational corporations with worldwide volunteering in 90 countries. People who are skilled in strategy, IT, and communications, among other things, are teamed up for multiweek engagements to help social entrepreneurs grow their companies to scale, as well as to help build “smart cities”in Africa, Latin America, Asia, and Eastern Europe. Second, an approach that I’m most experienced with is training and placing business executives on nonprofit boards of directors. When thoughtfully matched and prepared, businesspeople can help advance the missions and board governance of organizations addressing vital issues, such as climate change, economic development, health care, education, and human rights. In both cases—through international corporate volunteering and nonprofit board service—companies benefit through leadership development, stakeholder engagement, and developing capabilities and capacities in regions where they seek to build markets.
Q: What are some of the most intractable global challenges, and what kind of collaboration might be required in such cases?
A: Human rights challenges are complex, often requiring systemic solutions developed by convening a variety of stakeholders. Consider, for example, the horrific fires and building collapses in Bangladesh, where negligence has claimed the lives of so many garment workers. Solutions require the involvement of many multinational clothing companies, labor rights groups, local businesses where garments are assembled, regional governments, nonprofits, and workers themselves. Another example is conflict minerals. In the book, I describe the work that dozens of companies in the information and technology communications industry (ICT) are conducting through the Electronic Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI) to find solutions.
Q: You argue that “many companies are learning that solving the world’s most pernicious problems is the way to win in the global marketplace.”Is there still a role for corporate philanthropy, or should companies only consider revenue-generating projects that have a societal or environmental benefit?
A: Yes, there is definitely a role for corporate philanthropy, but I contend that smart companies use these dollars strategically. For example, in the book, I describe ExxonMobil’s work in Angola, Chad, Equatorial Guinea, Indonesia, Malaysia, and Nigeria, where the company’s commitments to develop and use regional workforces and supply chains have played a vital role in economic development. (This is not philanthropic; this is for the company’s license to operate.) At the same time, ExxonMobil’s foundation heavily invests its philanthropic dollars in diminishing the incidence of malaria; this benefits the company by reducing absenteeism at work. That is a smart and highly effective combination of philanthropic dollars and business strategy that benefits the community and the company.
Q: If companies focus on solving issues in a way that generates a business benefit, won’t that mean the most marginalized communities and countries continue to be excluded from solutions?
A: Three billion people are expected to rise to the middle class by 2030. According to McKinsey, consumer-facing industries in Africa alone are expected to increase by $400 billion by 2020. The pace of economic advancement in Brazil, Russia, India, China, Mexico, Indonesia, Nigeria, and Turkey, is noteworthy. Markets can play a useful role in improving opportunities for people to make a living and build better lives for themselves and their families. We cannot presume, however, that markets will be able to benefit all people. Ultimately, governments and nonprofits are essential to ensure that all people are cared for.