Emergent strategy (Mintzberg, Ghoshal and Quinn 1998)

Figure 12.1 shows the way in which emergent strategy works. An emergent strategy will be a combination of the initial intentions (the intended/deliberate strategy) and accommodations to the changing realities in the environment.

How much do companies give?

Data are often second-hand, self-reported and incomplete, and the corresponding methods are unable to overcome these deficiencies (Shapira 2012). However, The Global Giving 2015 report (CECP in conjunction with The Conference Board 2015) provides some valuable insights:

• 
  participating companies had median revenues of US$16 billion and median pre-tax profits of US$2 billion
  
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  giving grew for 56% of companies between 2012 and 2014, and it increased by more than 10% for 42% of companies
  
• 
  85% of companies are measuring and tracking the societal outcomes and/or impacts of their investments and starting to use the data to inform their core programs
  
• 
  pro bono and nonprofit board leadership were the fastest growing volunteer programs
  
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  for the second straight year, education (K-12 and higher education) was the most popular funding area for the average company (29%) in 2014, slightly ahead of health and social services (25%)
  
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  among companies making international contributions in 2013, the average company gave 21% of its total giving budget to recipients outside its headquarters country
  
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  59% of companies provided paid-release time volunteer programs in 2014, up from 54% in 2012, and
  
• 
  51% of companies provided pro bono service programs in 2014, up from 40% in 2012. (CECP in conjunction with The Conference Board 2015).
  

Knowledge of business giving is extremely general and predictable. In all countries, bigger companies tend to give more, arguably because they come under greater scrutiny from both the government and the public and must meet higher expectations (Gautier and Pache 2015).

Figure 12.2 Annual Review, 2014 (London Benchmarking Group 2014)

Figure 12.2 incorporates three charts which visually represent how much LBG members contributed in 2011-2013; what areas members supported in 2011-2013; and why members contributed in 2011-2013.

The first chart shows the type of giving by LBG members in 2011 – 2013. 50% of members gave in cash in 2012 and 2013; in 2014, 49% gave in cash. In-kind giving was at 34% in 2012 and 2013, increasing to 35% in 2014. 8% gave in time in 2012, rising to 9% in 2013 and 2014. 8% gave in management costs in 2012, falling to 7% in 2013 and 2014.

The second chart shows the cause areas benefiting from the members’ business giving. In 2012, health-related nonprofits attracted 43% of contributions, falling to 31% in 2013 and rising back to 42% in 2014. Education received 18% in 2012, 23% in 2013 and 20% in 2014. Social welfare received 12% in 2012, 10% in 2013, and 8% in 2014. Economic development attracted 6% of contributions in 2012, 8% in 2013 and 7% in 2014. 3% of contributions went to environmental organisations in 2012 and 2013, and 4% in 2014. Arts and culture received 5% in 2012 and 2013 and 3% in 2014. Emergency releif received the least at 1% in each year. ‘Other’ received 12% in 2012, 19% in 2013 and 15% in 2014.

The third chart shows the type of giving represented by the contributions. Community investment represented 57% of contributions in 2012, 56% in 2013 and 60% in 2014. Charitable gifts were 29% of contributions in 2012, 31% in 2013 and 2014. Commercial initiatives in the community were smaller at 14% in 2012, 13% in 2013 and 9% in 2014.

Percentages are given in each chart, for example, from 2012 – 2014 members contributed around 49 – 50% of contributions in cash and around 34 – 35% of contributions in-kind. In the second chart, member support was directed to health 31 – 43% and directed to education 18 – 23% over that same period. In the third chart, members contributed for community investment 57 – 60% over the period; and 29 – 31% as charitable gifts over the period.

A short trip around the world reveals a mixed bag of business giving. In India, McKinsey & Company research has found that the growing economy is not matched by philanthropic donations, which remain well below the global average (Bonini, Koller and Mirvis 2009). Companies in India are now required by law to contribute 2% of profits to CSR, but given the huge, diverse population they are then confronted with the problem of formulating the best strategies for achieving social transformation. Latin America reports low levels of business giving, and the tax machinery of government and complex legal code makes it difficult for corporate foundations to establish and operate in the same tax-effective manner as they do in the US (Mangaleswaran and Venkataraman 2013). However, increased wealth and political stability in countries like Brazil is heralding a sharp rise in business contributions. A bright light is the emergence of social entrepreneurs who are coming up with ideas that deliver unique business and social benefits.

‘In Brazil alone, the number of nonprofit foundations and associations is 338,000 GIFE has invested more than $1bn in 2010 and US and European agencies (remain the largest givers with a combined $2.7bn in donations).

Local corporate and individual philanthropists’ contributions now outpace those of global organisations, such as the Bill and Melinda Gates’ Foundation and the Ford Foundation which together allocated $119m to Latin America in 2008.

Large corporate foundations—Natura, large cosmetic maker and Avina Foundation, established to contribute to sustainable development across Latin America—have been created albeit are challenged by complex legal codes that make it difficult for foundations to give money. Securing tax-exempt status and the paucity of foundations and other grantmaking organisations mean the community of nonprofit groups and non-governmental organisations (NGOs) is not strong within Latin America as in other parts of the world.

The emergence of social entrepreneurs—companies approaching business with “triple bottom lines” of financial, social and environmental performance, and enterprises that are part of the region’s fledgling benefit corporation (or BCorp) community—is providing strong potential. An innovative waste management system is one example of social entrepreneurialism in Lima, Peru.’ (Rodrigues 2011)