Perspectives
March 2004

A Conversation with a Corporate Grantmaker
IS board member Mary Beth Salerno, president, American Express Foundation, and vice president, philanthropy, American Express Company, shares her observations from a 20-plus year career in corporate philanthropy. Beth is a member of the IS board, and American Express is one of IS’s earliest corporate members.

Some of the most notable changes, in my opinion, have been in the following areas:

• Professionalization of staff;
• A more direct link to the business side of the partnership;
• Increased involvement of other areas of the company with nonprofits; and
• Growth in giving outside of the United States.

Q. Can you expand on each of these areas? Let’s start with professionalization of staff.

When I joined American Express over two decades ago, I was the first person hired into the foundation who had come from outside of the corporation and who had experience working with nonprofits. Many of the senior people I met from other companies stayed for only a short time and were either on their way up or down the ladder in the corporation. Others had been executive assistants to the CEO—and they got their start writing checks for the favorite charities of the senior executives. Much of corporate philanthropy was still being conducted in that manner.

Today the field is filled with people who bring a wealth of experience in government, nonprofit management, advocacy—and business. Over the years, as companies began to narrow their grantmaking to focus on fewer issues, program officers with experience in the subject area—education or the arts or housing and economic development—were brought on, and that has made a difference as well.

Q. What about linking grants to business objectives? How are companies doing that?

Most companies today focus their grantmaking on a few program priorities. You can’t do everything, and if you want to have impact, you have to make some choices. Also, companies have gotten much more strategic about linking their grantmaking to the long-term business objectives of the company and to the company’s assets. So, for us, our Cultural Heritage theme relates to our travel business, and our Economic Independence theme relates to our financial services business. It is clear to people inside and outside of the company why we chose these themes. Also, given the relationship of these themes to American Express’s business, we can bring other assets from within the company to our grantmaking—volunteers with specific expertise, leveraging through advertising and communication, as two examples.

I’d also like to think that companies have become more transparent in their grantmaking. Most companies publish their grantmaking guidelines and procedures as well as their grants—in most cases, it’s all available on the web. And while it is still very important to work closely with the company’s senior leaders to support their involvement in the community on behalf of the company, there is generally a well-defined process by which grants are made. Program evaluation and community impact are key drivers. Many companies, including my own for some major initiatives, use a Request for Proposal process in order to seek out the best programs to address a specific need. Sometimes we work with an intermediary organization that has far more expertise than we do to help evaluate programs in a particular area. For our Economic Independence Fund grants, we have partnered with the National Endowment for Financial Education to help screen our grants and provide technical assistance to the grantees.

Another thing that has changed is the proliferation of partnerships with nonprofits throughout other areas of the company. It used to be that almost the only point of contact for a nonprofit was through the contributions group. That’s no longer true. For example, there has been a rise in cause-related marketing initiatives, and, in most companies, these relationships are housed in the marketing department. Lots of nonprofit publications go straight to advertising departments; and corporate sponsorships may be handled in an entirely different division that deals with both commercial and nonprofit sponsorships. And, as we have seen companies address issues of diversity, both from a staffing and a market standpoint, several corporate departments might reach out to nonprofits that serve diverse constituents for advice and counsel and to strike meaningful partnerships.

Q. Does this change your work?

Frankly, one change for my staff and me is that we spend a lot of our time advising various internal colleagues in areas across the business on relationships or potential relationships with nonprofits, educating them on the role of nonprofits and how they operate, and sometimes helping to make matches. This certainly has widened the funding possibilities for some nonprofits way beyond traditional philanthropy.

Q. How is corporate philanthropy going global?

Until rather recently, most corporate philanthropy was focused almost exclusively on the United States, despite the fact that, for many companies, revenues and the workforce outside the U.S. borders were growing. Today, it is not unusual for a major company to earn 30 to 50 percent of its revenue from outside the United States. Philanthropic activities are beginning to catch up with that growth. Companies want to demonstrate that they are good local citizens in every part of the world in which they operate, a practice that is important to employees in each region as well. So in the case of American Express, we have tried to work directly with indigenous organizations in the countries in which we operate. We have also worked very successfully with U.S.-based nonprofits like United Way International and Junior Achievement International, both of which have done an excellent job of creating local affiliates with their own boards and governing structures. And we have seen a proliferation of employee involvement by colleagues outside the U.S. I think this trend for U.S.-based global corporations to do more outside of the United States will continue to grow.

Q. Would you leave your corporate colleagues with some final advice?

Well, I am not one to dispense a lot of advice, but I would say to other corporate grantmakers that no matter how narrowly we design the programmatic focus of our contributions programs—and I think it is important to have a well-defined program and one that relates to the company’s long-term business objectives—I also think we have a responsibility to support the broader field in which we work. INDEPENDENT SECTOR and other organizations serve an essential function in that regard. The issues of accountability and transparency are important to all of us; we need a sector that operates well and that enjoys and deserves the public trust. We all have a stake in the public perception of the sector and the regulatory environment in which we operate. We need to find ways to support infrastructure and to help strengthen nonprofits so they can work most effectively on behalf of the public good. We may have to stretch ourselves and our programs a little to do that, but it is essential to our own success.

Mary Beth Salerno is president of American Express Foundation and vice president of philanthropy for the American Express Company, as well as a member of the IS board.

Please see also Alice Korngold's perspective on Engaging Volunteers in High-Impact Service.

The views expressed in Perspectives columns are the opinions of the authors and do not necessarily reflect the position of INDEPENDENT SECTOR or its members.
 

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