In the wake of global investment debates on the impact of the so-called “great wealth transfer”, research has emerged that indicates that we will see millennials inherit a posited $60 trillion from their baby boomer parents over the next three decades.
There is a clear shift in corporate consciousness towards purpose beyond profit, and the philanthropy industry needs to respond urgently. Traditional philanthropy models have been based largely on ring-fencing money for giving. In other words, philanthropy was viewed as an “add-on” to core business processes. Many businesses have relegated philanthropy to the marketing department due to a lack of corporate bandwidth for careful intellectual consideration.
It is against this background that The Institute for Futures Research (IFR) at Stellenbosch University has collaborated with an African think tank, Philanthropy Indaba, to produce a new framework for corporate philanthropy, known as the Philanthropy Indaba (PI) Model.
This comes after the recent summit of the Club of Rome in Stellenbosch, co-hosted by the IFR, during which new models of finance were proposed and a significant global philanthropy agreement was signed.
This new model moves beyond “posing for philanthropy” and is integrated and essential for competitive advantage.
The method was further inspired by the rapid rise in the phenomenon of Design Thinking. According to this methodology, human-centric design is key. When applied to philanthropy, this has three key implications:
* Philanthropy must be “designed”; not simply added as a special project.
* Philanthropy must be based on actual needs of the beneficiary, as opposed to the “dumping” of excess product or the donation of items of perceived benefit.
* The very nature of business is integrated into the idea of philanthropy, i.e. philanthropy is part of the business strategy.
According to Gerrit Schmidt III of Schmidt Family Office (SFO), who initiated the research and formed a philanthropy Think Tank with the IFR, “weak philanthropy will make corporations more vulnerable”. He explains the integration with an analogy to hybrid cars: “just as a hybrid vehicle has integrated engine-technology to automatically reduce environmental impact, so philanthropy becomes part of the very engine driving modern business.”
The laboratory for the PI model was its application to BrunchboXx, a philanthropic school nutrition enterprise of Carecube. This practical experiment revealed a key differentiator as a first step of the new model, known as Connect. In this step, philanthropy-wise businesses should explore their own industry, before falling prey to “random giving”. This includes discovering the perspectives of multiple stakeholders in order to produce what the model calls “an echo of values of the value chain”.
This includes strategic alignment of the values and principles of staff members as well as potential direct and indirect beneficiaries. As one imaginative technique (known as a thought experiment), organisations are encouraged to identify a “natural theme” for giving. This stimulates companies to consider how they might behave, given their core competence, if they were purely philanthropic. Companies are asked: How might philanthropy mitigate the potential social and environmental damage of our downstream value chain and how could it enhance our positive impact?
Once businesses are clear on their role in the broader ecosystem, the model moves on to other steps in the Design Thinking process, adapted for philanthropy. These include:
Define: gaps and needs in the context are discovered (not assumed) as the basis for giving.
Empathise: the reality of beneficiaries is studied immersively, as opposed to simply guessing from the comfort of the boardroom.
Ideate: ideas are generated in a co-design process with targeted beneficiaries.
Prototype: an early version is created in order to enhance visualisation of the intended gift.
Test: prototypes are applied to field conditions to discover their actual use and identify new applications.
This approach to philanthropy is vastly different from traditional methods in which there is significant distance from beneficiaries and limited strategic awareness of the relevance of the gifting. Naturally business pursues profit, but a deeper understanding of philanthropy, supported by natural and authentic systemic connections, may turn philanthropy from an unrelated donation to a long-term sustainable investment for competitive advantage.
* Dr Morne Mostert is Director of the Institute for Futures Research, a unit for strategic foresight at Stellenbosch University.
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