Corporate Foundations: Their Role for Corporate Social Responsibility
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Volume 9 Number 2
Top of Mind Corporate Foundations: Their Role for Corporate Social Responsibility Martina Westhues Deutsche Telekom Sabine Einwiller University of AS Northwestern Switzerland
ABSTRACT
According to their statutes and published objectives, many foundations focus on the solution of social problems and on responding to unmet social needs. They aim at social value creation and serve as an ‘antenna’ or ‘sensor’ for societal needs and expectations. If the work of the foundation is coordinated with that of the founding corporation and knowledge is flowing between these organizational entities, corporations can profit from the foundation’s activities and insights. However, since corporate foundations by their legal nature and very statutes are independent entities that are to exclusively pursue public-benefit purposes, this relationship is not free of potential conflicts of interest. Through expert interviews with representatives of five major corporate foundations in Germany and their founding corporations, the practices of this cooperation were explored and implications for its improvement were discussed. Corporate Reputation Review (2006) 9, 144–153. doi:10.1057/palgrave.crr.1550019 KEYWORDS: corporate reputation; corporate social responsibility; foundations; public relations
Corporate Reputation Review, Vol. 9, No. 2, pp. 144–153 © 2006 Palgrave Macmillan Ltd, 1363-3589 $30.00
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INTRODUCTION
In recent years, there has been a resurgence in the creation of corporate foundations
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in Germany1 (Anheier, 2003), and these non-profit organizations established by corporations are not only gaining in number but also in importance (Marquardt, 2001; Voegele-Ebering, 2003; Morweiser, 2001). This trend can be explained by the growing importance of the concept of corporate social responsibility (CSR) in Germany, as it is one of the purposes of a corporate foundation to help communicate a corporation’s commitment to CSR. As one can read on the websites of many corporate foundations, their purpose lies in fulfilling the corporation’s commitment to CSR or corporate citizenship. According to their statutes and published objectives, many foundations focus on the solution of (future) social problems and on responding to unmet social needs. They aim at social value creation and serve as an ‘antenna’ or ‘sensor’ for societal needs and expectations. Consequently, foundations have the potential to deliver valuable insights into the needs and expectations of corporate stakeholders. Therewith, corporate foundations can support a company’s CSR communication and fulfill a crucial function for stakeholder dialog and public relations (PR). Going one step further, corporate foundations can play an important role in shaping and strengthening a firms’s
Westhues and Einwiller
reputation because CSR is argued to be one of the pillars of corporate reputation (Fombrun and Gardberg, 2000). However, it is debated whether or not corporate foundations can and should serve corporate PR purposes and sup
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