The UN’s Sustainable Development Goals and its Agenda 2030 have made one thing very clear: If sustainable economic and social development is to become a reality for all of the world’s people, we need a strong collaborative effort spanning the globe, from south to north, and including both public and private institutions. But what, specifically, can the private sector contribute? And with respect to the foundation sector in particular, what can philanthropy do to foster strategic alignment?
This is one of the important questions we are currently trying to answer at the Jacobs Foundation, where I serve as managing director. Our peers have called this new institutional priority of our foundation everything from “groundbreaking and courageous” to “naïve and harmful,” reflecting the lack of agreement in our sector about the proper role of philanthropy. Let me share some thoughts from a foundation’s perspective, in an effort to trigger a much-needed debate.
Most philanthropic institutions owe their existence to fortunes earned in the private sector, and are thus linked to a specific industry. They also have a core set of principles—deeply imprinted in their institutional “DNA”—which define their mission, business model, thematic and regional focus, and operational approach. With those principles and links to industry in mind, foundations should devote far more energy to finding that “sweet spot” where their interests are aligned with those of the respective industry, and then nurturing and expanding areas of mutual concern. This is not only an intellectually challenging task, but also a promising way to make philanthropy more effective.
What does this mean in practice? To explain, let me share what we are trying to do at the Jacobs Foundation. Key elements of our DNA are our focus on improving education for children and youth, our aspiration to promote scientific evidence while also achieving a social impact, and our strong focus on clearly defined thematic and regional priorities, with the goal of becoming thought leaders within the related areas. With cocoa and chocolate still the source of our financial assets, we have a solid understanding of the main challenges facing this industry.
Two years ago, we therefore decided to focus all of our international work (aside from our global research funding) for the next five years on one country. The Ivory Coast—by far the world’s largest producer of cocoa, accounting for roughly 40 percent of the global supply, and one of the main economic drivers in West Africa—offered the most promising conditions for achieving our goal of strategically aligning with and leveraging the private sector.
The decisive factor in this decision was the fact that the cocoa and chocolate industry has recognized that child labor and low productivity pose a serious threat to the industry’s sustainable growth. That has prompted the creation of an industry-wide, precompetitive initiative, CocoaAction, of the 10 major cocoa and chocolate companies, which seeks to advance the sector’s sustainability agenda. Because of our ties to this industry, we received information about the planned initiative at an early stage and were invited to participate in the design process. Our expertise was particularly relevant, given the role of basic education in addressing the roots of the problem.
We decided that it would be most effective to approach the companies through their business units instead of following the rather traditional CSR approach. To that end, we had to come up with a convincing business case for investing in quality education. This meant scientifically demonstrating that access to education will not lead to economic growth unless there is also a strong focus on educational quality, that high-quality education is a logical means of combating child labor, and that illiteracy among farmers has a significant negative effect on companies’ business models.
We also identified four barriers to increasing investment in quality education: a failure to understand the government’s agenda, a lack of knowledge of what works, the misconception that benefits will not materialize until the distant future, and the perceived inability to capture the value created through quality education.
In keeping with our goal of raising awareness about the importance of education, as well as increasing capacity and investments in quality education, we opted for a cooperation-based model in which the companies themselves take the lead in designing and implementing educational interventions. Our role is to work with the government and civil society to create a solid platform, to propose evidence-based and government-aligned educational models, to offer support in building capacity, and to provide co-funding for the pilot and initial scale-up phases of the educational interventions. Currently in the final stage of negotiations with 10 companies, we are hopeful that this approach will be successful.
Although many challenges remain and success is far from guaranteed, we are more convinced than ever that the potential impact of such an approach is worth taking the related risks. This is what foundations can do, this is what they always claim that they do, and this is what they should be doing much more in the future. So, let’s walk the talk and jointly create a community of learning, in the interest of professionalizing this new stream of philanthropic engagement.