When the Philips Foundation was founded less than two years ago it was designed to capitalize on the skills and talents of the company’s staff, rather than function as a traditional grant-making foundation. Although not designed with commercial gain in mind, the work does benefit the company in other ways.
“I wouldn’t translate it as profit, but there’s a clear benefit to both sides to solve a social problem together,” said Katy Hartley, head of the foundation.
Hartley describes her role, and that of her team, as “brokers” or headhunters.” After discussing needs with the foundation’s strategic partners, the International Committee of the Red Cross and UNICEF, they go to work trying to determine who in their company has the right expertise.
The foundation just finished its first full year of operations and is focusing on scaling and continuing to deepen its work with existing partners, though it did recently announce a partnership with Ashoka, the global organization that invests in entrepreneurs, to help innovators scale their ideas.
Hartley spoke with Devex about what the foundation has learned so far and how she sees corporate philanthropy changing. Here are excerpts from that conversation, edited for length and clarity.
Your strategy has been to pick only two partner organizations and then really work deeply with those organizations. How did you go about picking the ICRC and UNICEF as your partners?
We went through a whole process of looking at where the crisis is in vulnerable communities, [and] looking at the kind of organizations we thought we would be able to co-create with. … We looked at their reach, whether they’d started innovating or not within their own organization. We looked at the culture [and] the number of past relationships or connections, because that says something about the cultural fit. We looked at their power to drive change, in our perspectives.
We looked at a whole long list. Because we know if you’re asking for co-creation, if you’re asking to share problems and vulnerabilities and go through long processes with each other, it’s a very different relationship [than if] you have a problem, you write the concept note, we make you a grant and we’ll follow up after a year. I think both our partners will fully agree it’s a really difficult process.
What have been some of the big challenges in year one?
Definitely timelines. Let’s say if you take a large organization such as the Red Cross or UNICEF and the necessity they have to be extremely careful because they’re dealing with people’s lives. They’re busy working at a different [slower] speed than a corporation or a corporate foundation. It’s an obvious [challenge] but still a telling one. Another [challenge] was [our different] assumptions about ways of working. So we have a classic example, which we’ve discussed, with the Red Cross. Our teams went on a field visit together, we came back, and off went the Philips people such as good consultants to write up the draft report and next steps. And the Red Cross were terribly offended because they felt that wasn’t proper teamwork, and that every word should be written together.
People talk about trust and language, but it’s really only when you encounter those things that you are really tested in your relationship.
What would you have done differently, given what you know now?
We invested a lot of time face to face, but we could have invested even more. Especially if your people are in the field with the partners, the more face-to-face time, the more trust there is, [and] the quicker things go. … So I think I would have done some more three-day workshops faster.
The other thing I should say is middle management. We went through all the layers of the organization to get them aligned, and you really need those field guys lined up because if they’re not on board, it doesn’t matter what top management says — and that’s on both sides, corporate and our partners. If you don’t have the people who have to execute the project lined up, then it doesn’t happen.
You have said the foundation approaches philanthropy in a different way than corporations have traditionally. How do you see corporate philanthropy changing?
If you look at corporate philanthropy, this is definitely the way it will grow. As a new foundation, a young foundation, we looked at what other corporate foundations were doing. At the time, Philips was rebranding to “innovation and you” and really bringing meaningful innovation to people’s lives. So we said, as a foundation, it’s fairly simple — we’re going to bring meaningful innovation to vulnerable people.
Because we felt the power of what Philips knows and what Philips can do was so much more than just a check, it would be a disservice to the company to just assess grants. I don’t want to be dismissive about that model but if we look at the level of humanitarian innovation I think it’s … 0.34 percent of all humanitarian funding and that 0.34 percent is fragmented whereas a company such as Philips would spend 6 to 8 percent on innovation.
As we all know there are a lot of crises, there’s not enough funding the need is higher than they can deliver. [There’s] not enough investment in innovation, and we have whole armies of people who know about innovation who can step in and help humanitarians innovate more efficiently or effectively and scale better. So it’s probably got a better return on investment profile than a one-off grant.
How do you view innovation in the philanthropy and development sectors?
Innovation generally in the sector isn’t tackled like it would be in the private sector. For example, there are multiple organizations working on developing or sourcing drones for humanitarian aid, and in the private sector that would never happen. You’d have a consortium of companies who would combine their resources develop one drone and then everybody would brand it differently to be as efficient as possible.
How do you improve corporate collaboration and bring in some of those new models of working?
In essence, [through] thematic focus. Salesforce knows what their key strength is and they want to use that, and the same for Mastercard and for Philips or for a pharmaceutical company. Just the articulation of the need from the other side is pretty tough.
I think there are platforms. The Global Alliance for Humanitarian Innovation can be a very powerful platform for either a company or corporate foundation to come along and say, you know, what we have this expertise but we don’t know who to give it to or where to apply it — can you help us? I think there are some sort of platforms that can help navigate.
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