Unfounded CSR Practices in Corporate Foundations.
Mixed reactions trailed the evolution of corporate
foundation amongst corporate organisations in Nigeria. While some
stakeholders classified it a welcome development another school of
thought have called for it regulation and monitoring by the government
or any appropriate agency.
In the last few years, every multinational and even some local
corporations with the glut of some unused fund had set up a foundation
to carry out its corporate social responsibility functions. Some of the
foundations are MTN Foundation, PZ Foundation, Dangote Foundation, Tony
Elumelu Foundation and many more.
Describing the evolution of foundations from corporate organisations
in the country to address social responsibility issues, Chief Executive
Officer of ThistlePraxis Consulting and sustainability advocate, Mrs.
Ini Onuk said “This is a welcome development, only if the environment is
regulated and structured. The setup of foundations all over the world
spells one thing, more interventions and more social impact. However,
when corporate organisations set up foundations just ‘to address social
responsibility issues’, it only reveals their lack of understanding of
what social responsibility is all about. Philanthropy and Community
engagement only constitute one of seven pillars of social
responsibility.
She added the setup of foundations emphasises the faulty approach of
CSR as an external initiative rather than a business strategy. A
percentage of profit after tax (PAT) is usually set aside to run the
foundation’s initiatives. The obvious questions remain: how exactly does
the company make the profit? What other aspects of social
responsibility (organisational and corporate governance, labour issues,
fair operating practices, consumer activities, environment, human
rights, etc) are being ignored?”
Another stakeholder, whose pedigree cannot be doubted in the
sustainability industry, Managing Partner, TruContact and organisers of
Social Enterprise and Reporting Awards (SERAs), Dr. Ken Egbas put
foundation evolution in three categories.
Hear him: “I think the evolution of the concept of corporate
foundations in Nigeria has been truly interesting as it provides perhaps
a research item on what can cause a sporadic spread of a concept or
idea to the extent to which one can perhaps claim in the entire world.
“In the first category you will find foundations that were set up by
corporate organisations as separate entities but still connected through
the umbilical cord to the parent body with the aim of helping corporate
bodies meet their social responsibility to society.”
Egbas said the intention of such foundation is purely to provide
solutions while accentuating the contribution of the corporate body.
According to him, the second category comprises those foundations
that were set up as a strategic response of certain organisations
starting foundations. And because they think they are just as big as the
other corporation, “so why not start their own foundation as well. If
you look around, you will see quite a number of them. They are
registered, well-staffed and loudly launched, but three to four years
down the line, they are yet to take off. You cannot point to anything
they have done. Many in this category are just trying to craft their
vision years after launch.”
On the third category, the well rounded CSR practitioners said that
it is made up of foundations that were set up for either political or
economic reasons. They are not running on a vision other than desires of
those who set them up. These are used like horses. The initiators ride
them when they need to and disembark when they don’t have to and repeat
cycle over again.”
Some of these foundations are seen as conduit pipes which some
organisations and founders use to perpetrate some economical crime
however, Onuk disagreed. She said “I do not agree with the allegation of
evasion of tax by corporate organisations. However, what the media is
expected to do as a constitutional social watchdog is to investigate and
constantly beam a spotlight on these activities and claims to
interventions that saturate the third sector.
“For the said ‘powerful individuals’, I am convinced that some of the
renowned philanthropists invest a lot of funds into charity. However,
the manner these funds are managed and disbursed or administered as well
as the return on investment (ROI) in the amount of lives impacted, is
questionable. Remember, these individuals cannot manage these funds
because they do not have the expertise to design appropriate
interventions and implement them at the same time.
“Professionalism and an aggressive quest for tangible impact should not be compromised at all times,” she added.
There are various kinds of foundations. Whilst the corporate
foundations are better with organisations and implementation of
interventions, the personal foundations are begging for structural
overhaul. Many foundations carry out haphazard activities especially
during festive seasons such as Christmas, Sallah and Easter holidays.
Whilst the need is overwhelming, most of the existing foundations are
not professionally managed. Hence, the factors responsible for their
seeming failure are not far-fetched. Rather than set up a foundation,
CEO of ThistlePraxis said “we advise philanthropists to set up funds and
donate annual grants to the more structured and professional
foundations for administration. The idea of showbiz celebrities setting
up foundations to mark personal milestones and not following through
with promises should not be encouraged.”
Due to irregular nature of the industry and it potential, Onuk urged
government to begin to beam it search and enact law that would effective
regulate the industry. “There is an urgent need for a regulatory
commission to vet and monitor the activities of foundations, especially
because they provide platforms for pooling of funds which are tax-free.”
According to Egbas, it is in those situations that you see some
organisations design a marketing promotional drive and call it corporate
social responsibility. Many aren’t necessarily trying to be dubious,
but merely acting based on level of knowledge they have or lack.
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