We have teamed up with Abbott to produce an article series on the future of corporate philanthropy. This is the first post in the series. Please read on here.
As a component of the sponsorship package, we agreed to review Abbott’s CSR reporting and provide some feedback, which we’ve provided in this post. While Abbott provided the funds to let us explore this area, it’s paid only for our time, not our opinions. The rest of the posts in this series will focus not on Abbott, but on the theory and examples of corporate philanthropy and will be written by staff as well as by outside contributors.
Abbott is a billion dollar multi-national healthcare company with products ranging from pharmaceuticals to nutritional supplements to medical devices. Though the company’s core offerings are already heavily tied to social benefit (improving human health), the company has deemed four CSR priorities to be material issues: Innovating for the Future, Enhancing Access, Protecting Patients and Consumers, and Safeguarding the Environment. The company’s citizenship page and CSR summary document makes a strong case for the choice of these four areas of focus and the way the document is organized around reporting on them is clear and effective.
Laying out material priorities in an obvious place is important – not just as a way to fulfill GRI requirements, but to frame the entire CSR document. Of equal importance is that fact that each of the four priorities is explained in a way that demonstrates relevance not only to stakeholders at large, but to the company’s core business competencies.
For example, “Innovating for the future” may refer to basic R&D but when coupled with a corporate commitment to supporting science education, the impact of that priority is magnified. It becomes stakeholder engagement of the first order – addressing the needs of the community in which the company operates while at the same time laying the groundwork for basic science literacy. That’s something that matters to a company always seeking enthusiastic scientists for the future.
Use of GRI Framework
Abbot’s online report is easy to navigate using the GRI framework. That is an excellent sign for a CSR report reviewer. Additionally, the report was submitted to GRI for inclusion in their public database. Our only critique is that these efforts deserve a larger space in the summary document because they are a tip-off to readers that a company is taking CSR and CSR reporting seriously. That’s something that should always be front and center.
Build-your-own PDF capability
Abbot offers a clever “Build your own PDF” function to customize the data a reader can take away. However, without knowing upfront how the report is organized, it couple be a little difficult for a reader to pull together a report with the information related to a particular issue. For example, without seeing the report, it might be hard to know if employee engagement would be a part of Citizenship at Abbott, Engaging our Stakeholders, Our Workplace, Supply Chain Management or Key Metrics- Social. It is probably mentioned in all of those sections. If a reader gets to the point of wanting to look in depth at a particular issue, they are likely to check a substantial number of the PDF options, giving the “build your own” tool limited practical usefulness.
The Abbott Fund
Abbott also donates a substantial amount of funds to its foundation, the Abbott Fund, a separate legal entity that delivers strategic philanthropy toward the same four core values. In conjunction with the Abbott Fund, Abbott is able to focus on issues that are of primary importance to the healthcare company, such as improving access to care for those who lack it, investing in educating future scientists, and development programs in the communities where Abbott has operations.
Abbott is actively engaged in dozens of projects to increase access to healthcare in the US and abroad. The projects run the gamut from a project to address malnutrition in Haiti ($6.5 million donated so far) to a maternal and child health initiative in Afghanistan. The tangible results of these efforts make up impressive numbers. For example, 66,500 Bolivians were screened for diabetes and $225 million has been invested in HIV/AIDS eradication in the developing world.
Abbott acknowledges that many able students lack access to strong programs in the sciences. These students may be the future researchers the company will rely on to make scientific breakthroughs. One part of Abbott’s investment in science education is a program in Chicago that puts Abbott scientists in classrooms in low income areas to teach after-school programs. Nearly 200 scientists have participated since the program began in 2006, and the program has served almost 3,000 students.
Abbott’s community engagement work serves to strengthen the communities where they operate. These programs take on many forms, depending on the needs in the local communities. One impressive program feeds hungry children when their schools are not in session and has delivered over 360,000 backpacks full of nutritious food since 2009.
Design and Project Integration
Where Abbott really shines is in the design of the communication tools it uses to talk about these projects. The website is clear and easy to navigate, containing descriptive pictures and helpful summary panels to deliver a lot of information in a short amount of space. However, we wish that more detail about individual projects was available for readers who are interested in a deeper drill-down.
Transparency and Foundation Structure
The Abbott Fund is a registered 501c3. This means that, though the funds come primarily from the company, the NGO can have objectives that are separate from the corporation. Non-profits doing likeminded work can apply for grants from the foundation to continue doing the work they do best. This approach allows Abbott to focus on giving funds where they are needed most, instead of spending money funding the development of new projects.
In an ideal world, these initiatives would be more closely integrated into the fabric of the company–but that’s a lot to ask of a multinational organization with a strong emphasis on the bottom line. The sponsored NGO approach is a solid one that is taken by many companies of similar sizes.
With that said, information about the size of the fund and the way Abbott Fund distributes grants took us some time to uncover. Straightforward descriptions of Abbott’s donations to the Abbott Fund in any year are not easily available on either website, and the Abbott Fund’s public-facing pages give little information about its grantmaking process. This was a surprise given that basic transparency is standard for most NGOs and all public companies.
We eventually turned to an external foundation tracker to get this information. In 2009 (the most recent year available), the Abbott Fund had total assets of $171 million and gave grants totaling $34 million. According to its tax return, The Abbott fund received just over $900,000 in donations in 2009. Given that Abbott is the sole funder of the Abbott Fund, we can assume that Abbott’s giving totaled $900,000. While this may be a modest fund compared to that year’s $30.8 billion in sales (that’s 0.003 % of sales, for those playing at home), the contributions Abbott has made in previous years have allowed the foundation to establish a substantial endowment capable of funding a tremendous range of wonderful projects.
The Path to Integrated Philanthropy
When measuring the impact of a company’s philanthropy, we look at how successfully the company integrates philanthropic work into the overall corporate structure. Bill Marquard’s ANDvantage framework provides a simple matrix of the evolution:
We think Abbott is at the “strategic philanthropy” stage of the sustainability journey.
Abbott’s tagline is “a promise for life.” Says Abbott: “Our ‘Promise for Life’ is a statement that describes – for our customers, our communities, our shareholders and all of our stakeholders – what we believe in, what we value, and what we strive to deliver in our day-to-day work.”
The areas of funding in which Abbott is engaged demonstrate a strong consistency with the company’s mission.
Moving forward, we’d challenge the company to look for opportunities to integrate these philanthropic projects into its core projects.