Strategic philanthropy can become an extension of ESG practices, enhancing the positive impact that companies should have on society. Foundations could be ideal partners for realising this idea. What can foundations learn from companies? And what can companies learn from foundations?
Alignment with the company's mission and values
Strategic philanthropy must be aligned with the company's mission, values and long-term objectives. This means that the philanthropic initiatives the company joins should not just be one-offs, but rather ongoing projects that reinforce the company's identity and purpose. For example, a technology company could invest in technology education programmes for vulnerable communities, aligning its financial support with its core business and creating both social and economic-financial value.
Focus on ESG Priority Areas
Philanthropy can be directed towards causes that are directly related to the ESG goals that the company prioritises. If the company has a strong commitment to environmental sustainability, it can direct resources towards initiatives that combat climate change or promote biodiversity and the conservation of natural resources. Similarly, if the focus is on social inclusion, it can support financial education programmes that promote equal opportunities for young people and adults, as financial illiteracy is a crucial factor in exclusion and a serious social problem affecting our country.
Creating Strategic Partnerships
Strategic philanthropy can be expanded through partnerships with the state, other non-profit organisations and companies that share the same ESG objectives. These partnerships can maximise the social impact of projects. For example, a company can form partnerships with a foundation and other organisations to promote financial and digital literacy, combining expertise and resources to achieve more significant results.
Measuring Social Impact
The António Cupertino de Miranda Foundation team believes that strategic philanthropy, like ESG practices, should be directed towards programmes that define measurable results. It is also important that clear metrics are established to assess the impact of initiatives and that the results are publicised in a transparent manner. This not only emphasises the effectiveness of the Foundation's projects, but also demonstrates the company's credibility in relation to its ESG commitments. It also demonstrates the social impact of their contribution.
Stakeholder Involvement
Incorporating ESG into strategic philanthropy (or vice versa) also means engaging stakeholders and the local community. Stakeholder engagement not only extends the reach of philanthropic initiatives, but also reinforces the company's commitment to ESG practices more broadly. For example, volunteering programmes that involve employees in social projects can strengthen the organisational culture and increase employee commitment.
Integration into Business Strategy
Philanthropy should be integrated into the company's business strategy, becoming an integral part of how the company generates value. This means that decisions to financially support programmes with a social impact should be made based on the conviction that they can contribute to the long-term success of the company, while at the same time promoting social well-being.
To give an example, I can say that all the social investors who support the António Cupertino de Miranda Foundation in the creation and implementation of financial education programmes are committed to the Foundation and collaborate on these programmes. These are complex and multidimensional projects, which would be impossible to realise if there wasn't a very strong network of partners who, with the Foundation's experience and knowledge, jointly create solutions that are socially innovative and have a systemic change effect on society.
Governance and Transparency
Strategic philanthropy must be undertaken with the same standards of governance and transparency that guide other ESG practices. This includes ensuring that decisions are made ethically, that funds are allocated effectively and that there is clear accountability for the results achieved. Transparency in this process helps build trust between the Foundation and its partners, demonstrating a genuine commitment to positive social impact.
Incorporating strategic philanthropy into companies' ESG allows companies to move away from considering funding social projects as a secondary activity to making it a central part of their corporate strategy. In doing so, companies not only reinforce their commitment to social responsibility, but also create a competitive edge that can attract customers, investors and talents who share the company's values.
