Corporate foundations: what does best practice look like?

Last updated: 30th March 2023

Corporate foundations can play a key role in addressing societal need through their funding and support of the charitable sector. No two corporate foundations are the same. And there is no set formula or short-cut to success. So how can we make sure a corporate foundation is set up to be effective and impactful?

Through our experience working with companies of all sizes and stages of their foundations, we’ve identified six core areas of best practice to consider incorporating into your plans. 

1. A clear purpose

The most impactful corporate foundations are those that have a clear purpose, which is aligned to identified outcomes.

Having clarity of purpose and outcomes can help identify the issues to be addressed and the type of organisations and initiatives the foundation will be supporting, as well as allowing for more efficient and impactful use of resources.

2. Alignment to business purpose

Corporate foundations also work best when they are fully integrated into the company’s strategy and purpose. Strong alignment between the two provides clarity of direction across the organisation, at both an executive and employee level. Clarity of purpose internally can then feed into clarity of message and communications to external audiences.

It can also help identify and leverage your strengths, such as providing specific skills, expertise, resources or equipment in the most impactful way.

3. Shared value creation

A successful corporate foundation should create shared value, long-lasting value for both the cause area and the company.

A company’s success is no longer considered solely on its economic value, but its social and environmental value too. In order to create this value, a company can go beyond giving financially, and provide skill sharing, employee volunteering, employability schemes, and creating networks that bring key stakeholders together to address societal issues.

4. Distinctive in the giving space

Thinking about a unique selling proposition for your corporate foundation, as is commonplace in business, can go a long way in helping you to refine your focus. By focusing on a specific issue or cause area, you can create a more targeted approach, establish strong community partnerships, and reach those who may not be receiving help elsewhere.

Having clear and strong partnerships with experts in the cause area, as well as taking a forward-thinking and innovative approach, can ensure you’re helping to deliver what is needed in an effective and impactful way, rather than attempting to tackle to every societal issue.

5. Concrete, long-term financial commitment

Corporate foundations provide a structure for businesses to demonstrate a commitment to contributing to societal value over the long-term. It not only ring-fences funds from wider budgets, but offers a continuity of giving over the course of many years. From our experience, best practice is to commit to giving at least 1% of annual profits to make a significant impact. Some foundations are funded by sales of a certain product set, or even by a percentage of total revenue. 

6. Engagement with stakeholders

Well-designed corporate foundations are often those where all stakeholders are engaged with and supportive of their activities. Internally, your executive team and employees at all levels can be taken along on the planning journey, and their engagement can be encouraged by involving them in the decision making, including through participation in a grants committee.

From our experience, it’s also important to engage external stakeholders. Dependent on the cause area, these might range from customers, investors, communities, thought-leaders, the media, local leaders, or local authorities. 


Need strategic advice for your corporate foundation?

Whether it’s defining your ambitions, engaging your stakeholders,

or setting up a measurement framework, CAF’s expert corporate team can support you at every stage of your foundation journey.

Learn more

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