On the Record

Increasing the Impact of Corporate Engagement in Education: Landscape and Challenges

Justin W. van Fleet

Editor’s Note: The Center for Universal Education co-hosted a side event with UNESCO and the United Nations Department for Economic and Social Affairs during the High Level Segment of the Economic and Social Council (ECOSOC) at the United Nations Headquarters in Geneva, Switzerland. This meeting brought together business leaders from multinational companies and representatives from governments and ministries of education to discuss engaging the private sector in education. His Excellency Lazarous Kapambwe, President of ECOSOC and the Permanent Representative of Zambia to the United Nations, made opening remarks and Ms. Irina Bokova, Director-General of UNESCO moderated the discussion. Justin van Fleet discussed the challenges and opportunities with corporate engagement in education.

The Current State of Education is Nothing Short of a Global Learning Crisis

Despite progress made since the start of the millennium to refocus efforts on education, progress in education has been slow and uneven with government commitments wavering. The current state of education is nothing short of a global crisis: 67 million children remain out of primary school and resource mobilization to reach the 2015 targets has fallen short by over $16 billion. Just as alarming, yet rarely discussed, are the hundreds of millions of children enrolled in school but not learning. This global learning crisis is characterized by alarming statistics: in some countries after five years of schooling children still have a 40 percent chance of being illiterate. Three out of ten young people in emerging economies cannot do basic math. And despite the rhetoric, education has yet to create truly effective, sustainable and scalable partnerships with the private sector like we have seen in other sectors, such as health.

We’re Missing True Champions from the Private Sector

An examination of private sector philanthropy has demonstrated the lack of a strong continent of champions for education. In the initial “Giving Pledge,” a collection of billionaires who have committed to giving away a substantial portion of their wealth to charitable causes, an analysis by Brookings found no support for quality education in developing countries among the inaugural pledging community. In another study we have underway, we find that 31 percent of the world’s billionaires are in developing and emerging economies – which lends hope for new champions. For instance, an example is the leadership of Azim Premji, who has dedicated a significant portion of his personal wealth to supporting education in India.

In terms of private foundations, a recent analysis by the International Education Funders Group, a new collaborative of private funders of education in developing countries seeking to be a catalytic force in advancing Education for All, revealed that nearly half of the European and North American foundations making grants to education are newly formed. And while this offers hope for new actors in education philanthropy directed toward developing countries, data from the Hudson Institute’s Center for Global Prosperity suggests that among U.S. foundations, less than 5 percent of foundation funding to development goes to education.

What We Know About the Corporate Sector

We have some emerging data coming out of the corporate sector to help us see the promises and limitations of corporate engagement in education. We are in the process of surveying global companies and have identified over 200 – nearly 55 percent of non-US based Global Fortune 500 companies – that are engaged in education in developing countries. Over 80 percent are based in developed countries and another fifth are based in developing countries. Of those based in developing countries, we find that over 30 percent make south-south investments in education, from one developing country to another. These south-south transactions in education are particularly interesting and merit further exploration. We are hoping to have some estimates regarding the magnitude of these investments in the coming months.

In the United States, our study projects a $500 million contribution to developing countries education systems each year. These contributions are led in scale by the energy and technology sector. We also find they are highly focused on career-centered education such as science, technology, engineering, math, entrepreneurship and workforce training.

The important thing to remember about corporate engagement in education – and what we must be clear about if we want to make partnerships successful – is that companies are not in the business of social outcomes. They are accountable to shareholders to make a profit and business goals must be consistent with any social goal in their philanthropy strategies. Understanding this notion can help set expectations and assess mutual interests that are compatible to leverage for increased social investment in education. Our research shows companies invest in education in locations where their employees live and work or where there is a strategic market interest. They invest in education where they have market and growth opportunities, where they would like to promote community relations and brand recognition or where they can engage their employees.

Corporate contributions have several limitations that can be summarized as highly fragmented engagement in global education with a limited impact at a systemic level. Contributions tend to be small, short-term and uncoordinated. We found that over 70 percent of corporate contributions are for less than three years of support; half of those are one-time contributions. We found that only one quarter of U.S. companies actually coordinate contributions with the host governments. And more than half of corporations in our research report not coordinating their contributions with anyone – this includes other companies, foundations, donor governments, or host governments at any level. Additionally, these contributions which fly below the radar of national and local education plans, focus significantly on acute labor needs and ignore systemic challenges endemic to the global learning crisis. Some of these neglected areas include early childhood development, early learning, and transitions to relevant post-primary education opportunities. On top of this, corporate contributions to education do not reach the most marginalized. We found that the higher the level of education poverty in a country, the lower the probability of corporate engagement in education. Corporate contributions favor emerging economies at the expense of those countries or regions in greatest need.

The Role of Governments and Multilaterals

But the disconnect is not just on the part of companies and the private sector. The corporate sector has identified several reasons why it may circumvent working with governments or multilateral organizations. Overall, the disconnect can be described as a lack of understanding of business culture. Companies expect partners to demonstrate specific and tangible uses of resources, provide direct and timely feedback about corporate contributions and facilitate additional connections for the business at the local level. Companies find that governments and multilaterals often lack clear plans and deliverables which make the investments difficult to justify. They also find that the high administrative costs make collaboration prohibitive and that visions of potential investments often lack opportunity to scale up successful projects throughout countries and regions.

Moving Toward True Collaboration

Collaboration within the private sector is not impossible and in fact, leveraging assets to have a real impact on education is not only possible, but taking place today. One example comes from the private foundation world. A few years ago, instead of starting a parallel program focused on global education, the Gates Foundation partnered with the Hewlett Foundation to develop a single strategy to promote quality education in developing countries. What emerged was a clear, five-year plan which jointly mobilized $90 million focused squarely on promoting learning in developing countries. This collaboration has allowed us to understand the scope of the global learning crisis by building evidence through programs such as ASER in India and UWEZO in East Africa and has also taken a deep look about what needs to take place in classrooms to really give children a chance to learn. And this is just one instance of leveraging resources and collaborating.

When I look around the table at the unique assets each of you bring to the table, I cannot help but think that if we get serious about leveraging each others’ core strengths and collaborating in earnest, the potential for impact is enormous. So what does this mean for companies? Until companies see global education as a core business interest – not just social responsibility or philanthropy – the impact will not be significant. The global learning challenge has a direct impact on society and the bottom line. From the talent of current employees and future employees to the income potential of your consumers, learning is vital. Every CEO should be talking about the global learning crisis, and more importantly, making pledges about what the company brings to the table and is willing to do to support government efforts to cure this silent crisis eroding development potential.

I would urge companies to realize that the talent gap – or whatever the motivation is for your investment in education – cannot be solved by a band-aid approach. Education should be a corporate-wide strategy and priority for employees, communities, and consumers. And every CEO should be aware of how this global learning crisis is directly impacting his or her business’ bottom line and be aware that lack of investment or advocacy to other governments and leaders isn’t just hurting society, but business. Companies should focus on how they can invest in learning, particularly early childhood education, learning in early years and transition to post-primary that is relevant. These investments should pay particular attention to marginalized populations. I would also urge companies to become strategic and innovative with the way they think about deploying their resources and coordinate financing with governments and other corporations or foundations. I extend an open invitation for everyone here to join our Brookings Working Group on Corporate Philanthropy for Global Education and to be part of the Global Compact on Learning which is bringing together donor governments, multilateral organizations, foundations, NGOs and growing number of corporations and developing country governments to chart a new learning agenda leading up to and following 2015. Companies should also engage with the Education for All-Fast Track Initiative, which is taking the private sector contribution to education seriously in support of their mission through a constituency group for private foundations and private sector actors. There are opportunities for real change and not just more of the same.

While it is important to acknowledge that not every government or multilateral organization will find working with the private sector to be of interest, if you wish to engage more with the private sector, I encourage you to develop concrete opportunities for corporate engagement. Look at business interests and the potential for how contributions of cash, in-kind resources, or employee expertise could support you education plans and strategies. Commit to measuring the impact of programs and scaling successful innovations. By working successfully with the private sector, donor governments, host governments and multilateral actors can begin to develop track records of working with the private sector to support sustained learning.

In summary, there is a learning crisis and an education resource crisis. The two go hand-in-hand. And it is the challenge for everyone in the room – and our peers not present at other multilateral organizations, ministries, development agencies and corporations, to take the learning crisis seriously and instead of “more of the same,” really change the way we support education in developing countries to put learning front and center. I look forward to hearing from our other colleagues and then to having a substantive discussion about how we can increase the impact of our efforts.