Each month we spotlight a company, individual, entity or even a country that is acting on evolving trends for strategic advantage. Spotlight award winners stand as positive examples with something to teach all of our businesses, no matter the industry or size. This month, we award the spotlight to the Coca-Cola Foundation for taking corporate NGOs to the next level by using their unique capabilities and tailoring local efforts while maintaining an eye towards the long-term corporate benefit.

According to The American Association of Fund-Raising Counsel (AAFRC) as reported by ReferenceForBusiness.com, “Companies in the United States donated some $8.2 billion to charities. (This sum doesn't include non-financial gifts, which historically have made up 15-20 percent of all corporate giving.)”

Coca-Cola CEO and Chairman Muhtar Kent talks about a company’s “social license to operate.” This concept is rooted in the idea that your company operates within a given community not because you want to but because that community wants your company there. They have given you an unwritten license to operate and can revoke it at any time. Your corporate social responsibility efforts, or CSR, are all about maintaining and expanding that social license to operate while optimizing business conditions and shareholder value. The Coca-Cola foundation wins this month’s Spotlight Award for doing just that.

For Coca-Cola, using the company’s unique capabilities means drawing on its people and distribution chains. According to the foundation, “Through the Coca-Cola Matching Gifts Program, eligible employees make personal contributions to qualified organizations and The Coca-Cola Foundation matches those contributions on a 2-for-1 basis.” Employee involvement is key and a 2-for-1 is hard to pass up. Their unique distribution strengths are also hard to deny. According to the foundation, “When natural disasters strike, The Coca-Cola Foundation and the entire Coca-Cola system respond to offer emergency relief... Our system is in a unique position to provide assistance during and after natural disasters. Our large distribution network allows us to deliver necessities quickly and to reach communities not easily accessible.”

Beyond its people and unique capabilities, the foundation seeks ways to put all of that funding to good use. According to the Coca-Cola Foundation Website, “Foundations grants are awarded throughout the year on business plan priorities, tax requirements, legal compliance and approval by the Foundation's Board of Directors.” Overarching directions for the Foundation include environment, fitness and active lifestyles, community recycling, and education.

According to ReferenceForBusiness.com, “Company CEOs and other executives usually sit on the foundation's board of directors and exercise great influence on charitable decision making.” Because of this, or perhaps even in its absence, there are plenty of folks who believe that companies should not have anything to do with charity. According to ReferenceForBusiness.com, “Milton Friedman maintains that the business of business should be business, with no charity of any kind.” Add Jackson Miller of jaxn.org to that list who says that, “The best thing for society is for corporations to focus on making money for the shareholders and leave the charitable decisions to the individual shareholders. Anything else is an abuse of power by the executives of the company.” Miller suggests that many CSR programs are really just a business’s response to consumer demand. Citing one of the world’s favorite coffee companies, Miller suggests that, “Starbucks doesn’t have ‘fair trade’ options because they wanted to; they have fair trade options because the customers demanded it.” There is a kind of inherent mistrust of many CSR efforts, rather like we tend to mistrust politicians. The reality is, however, that the majority truly seek to do good for the community and for the business and it is hard to find fault with that. The Coca-Cola Foundation has managed to navigate potential mistrust in a masterful way by tailoring programs locally via locally run sub-foundations. That puts locally respected people in charge of locally important efforts.

The foundation puts forth that, “We recognize that many of our greatest social and environmental impacts occur in our agricultural supply chain...The Coca-Cola Company is a local business on a global scale.” This vantage point has led the Coca-Cola Foundation towards tailored activities within different regions of the world; 19 regions to be exact. Nineteen local and regional foundations operate with a level of independence under the umbrella organization to tailor foundation activities to their local areas.

For example, according to the foundation, “In Africa, Europe, Latin America, North America and the Pacific, we support student scholarships and other educational programs and initiatives. HIV/AIDS prevention and awareness programs are also community priorities in Africa and Latin America.” There is a flagship water quality program within their African foundation. Programs in India focus on solar electrification and significant water sustainability projects. In Spain, The Coca-Cola Spain Foundation seeks to, “promote cultural and educational development of Spanish Youth by fostering the fine arts, especially painting, sculpture, music and literature, as well as to contribute to improving the environment and promoting the progress of science.” In Brazil, efforts are focused on reducing school drop out rates in public elementary schools in low-income areas. Teaming is also the name of the game. In India, the foundation has teamed with numerous local organization and in Scandinavia, they have teamed with noted airline SAS.

The benefits back to the parent company are numerous. Last month, we listed out all of the potential benefits to a parent company with CSR efforts. The Coca-Cola Foundation has managed to include them all within its various efforts including: employee retention, improved talent pipelines, improved supply chains, positive political will, increased local market share, increased brand equity, and the list goes on and on. Really look at their efforts and see the connection. They have crafted a delicate and critical balance between optimizing business conditions and providing what local communities deem important... The classic win-win scenario.

Of course all of this activity must be tracked, reported and measured. The foundation has chosen to align with the Global Reporting Initiative to do just that. According to Coca-Cola’s citizenship website, “The Global Reporting Initiative (GRI) is a framework of internationally accepted guidelines and principles for companies and organizations to report on corporate responsibility and sustainability performance.” It would be easy to for any company to be intimidated by the extent and depth of the foundation’s reporting. However, keep in mind that the foundation includes an umbrella organization and nineteen sub-foundations each with numerous efforts to track. For many smaller businesses, one page will suffice.

What works about the foundation’s efforts, speaks to a larger evolution in the corporate giving world. ReferenceForBusiness.com is right on the money when they suggest that, “as Strategic Corporate Community Involvement gets older, stronger and even more sophisticated, the charming but woefully inefficient Corporate Charity will fade away and die - killed by a younger, more vibrant, and more effective younger brother.” That vibrant and more effective new form of charity is the corporate foundation and CSR efforts and the Coca-Cola Foundation is a shining example of that evolution.

There are many lessons in the Coca-Cola Foundation’s efforts for every business of every size. The Coca-Cola Foundation understands the ‘social license to operate’. Understanding how this license works is step one for your business. Center CSR efforts on your unique capabilities. Bring to the community table that which only you can bring. Next, tailor CSR programs to local needs. Local relevancy will help maintain your link to the community. Then, avoid CSR mistrust by deciding and acting locally. It is hard to question the motivations of those who live and work with you every day. Forming local partnerships, asking local leaders to be involved, and keeping decisions at the local level will all help to ensure the community knows you are sincere. Lastly, optimize business conditions within your ‘social license to operate’. You have a duty to shareholders and stakeholders to craft your CSR programs for a win-win situation.

For further information, consider these sources along with your own:

The Coca-Cola Foundation
http://www.thecoca-colacompany.com/citizenship/foundation_coke.html

Global Reporting Initiative (GRI)
http://www.thecoca-colacompany.com/citizenship/gri_index.html

Coca-Cola India’s Environment Calendar Bags Gold At PRCI Corporate Collateral Awards
http://www.coca-colaindia.com/corporate_citizenship/corporate_citizenship_action_detail.aspx?cid=212

Coca-Cola Wins Another Gold Award For Its Citizenship Efforts
http://www.coca-colaindia.com/corporate_citizenship/corporate_citizenship_action_detail.aspx?cid=186

Coca-Cola Wins Golden Peacock Awards For Environment Management In India
http://www.coca-colaindia.com/corporate_citizenship/corporate_citizenship_action_detail.aspx?cid=101

Environment Appreciation Award to Coca-Cola, Jalpaiguri Unit
http://www.coca-colaindia.com/corporate_citizenship/corporate_citizenship_action_detail.aspx?cid=57

CORPORATE PHILANTHROPY
http://www.referenceforbusiness.com/encyclopedia/Con-Cos/Corporate-Philanthropy.html

Corporate Charity Sucks by Jackson Miller
http://jaxn.org/article/corporate-charity-sucks

Business: Cause related marketing by Ali Stunt
http://www.ecademy.com/node.php?id=150700