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Corporate Philanthropy and Social Responsibility: Enhancing Global Education

A recent study, “Harnessing Corporate Philanthropy to Educate the World’s Poor,” conducted by the Center for Universal Education finds that every year, American corporations contribute nearly half a billion dollars for education in developing countries. This estimate shows that, in the aggregate, U.S. corporations constitute a significant source of financial resources for education in developing countries. In fact, they are the 7th largest donor after the World Bank, France, Germany, United States, Netherlands and Japan.

Despite the benefits of education—including economic growth, healthier communities, and peace and security—the needs remain strikingly high in poor and marginalized parts of the world. There are more young people in the world between the ages of 12-24 than ever before seeking educational opportunities leading to a better way of life. And of the 1.5 billion young people in this age group, 1.3 billion live in developing countries. The need for resources to support these young people is great: UNESCO estimates $16.2 billion annually is needed in external resources to achieve universal basic education alone by 2015.

By surveying nearly 150 U.S.-based companies and conducting in-depth interviews with corporate philanthropy leaders, we find that U.S.-based corporations have enormous potential to better use their unique assets and minimize their liabilities when directing their philanthropic efforts toward global education. Other than providing knowledge, tangible skill sets and economic growth to local communities and governments of developing countries, the most significant asset “Corporate America” can bring to global education is innovation.

Dell YouthConnect centers not only provide after-school computer and tutoring classes, but also engage young people in the community to serve as peer educators. In South Africa, the centers are run through a partnership with Humana People to People, in which students receive academic support and also volunteer in the community providing HIV and AIDS prevention information with 5,000+ children, young adults and community members. Corporations could also play a larger role in scaling up innovation to transform education throughout the world. For example, with a few corporate champions, eReaders could revolutionize literacy in developing countries by providing quality learning materials to impoverished places though the mobile phone system, which has demonstrated extensive reach even in the most marginalized parts of the world.

Innovation does not just come in the form of technology. We find innovation through consumer product companies, financial services and the energy sector, ranging from the creation of new tools to enhance education to working with ministries of education to increase capacity.

But, corporate philanthropy does have its limitations. A company is certainly more inclined to make a contribution to education in the developing world only when the contribution—or act of contributing—advances the company’s mission and goals. The idea is for companies to mesh business goals and societal goals to create shared value. But for this to be successful, the economic value created by a company cannot overshadow the societal value from its philanthropy.

There are some lessons to be learned so that corporate investments have the most sustainable impact on education systems. Our study finds that corporate philanthropy is very fragmented—many small, short-term grants to nonprofits, focusing on many different themes, spread across 114 countries and relatively uncoordinated with governments, donors or other companies. And although these contributions may have a meaningful impact on communities, the impact is far smaller than the potential.

In addition, we find that corporate contributions do not reach the most poor and marginalized. The most frequent recipients of corporate funding for education are China, India, Brazil and Mexico; but the countries in most need of support are predominately in sub-Saharan Africa and Southeast Asia. And, following disasters, we find that companies are quite generous, but often follow the charitable rush: In the aftermath of a disaster, companies and their employees are quick to be generous and organizations are quick to welcome the support, but the long-term strategies are often not in place. We suggest ways in which investing in education in post-disaster contexts could be a win-win, long-term contribution strategy for companies and society.

As Secretary of Education Arne Duncan recently pointed out in Foreign Affairs, Americans stand to benefit by supporting educational attainment throughout the world. We identify 10 opportunities to improve the impact of corporate philanthropy to education in developing countries. But first and foremost, companies should take on a broader view of education that looks beyond immediate job skills. Education promotes stability, healthier families, civic participation, learning, and more economically productive citizens. Serving as a starting point to bridge the corporate sector and the global education community, the goal of our research and analysis is to shape the discussion on how to best work together to create equitable learning opportunities for children worldwide.

Download the "Harnessing Corporate Philanthropy to Educate the World's Poor" report »

Results from this report were presented at Center on Universal Education event at Brookings.