Introduction: The Case For Engagement

Grantmakers have many reasons to cooperate with people in the for-profit sector. Foundations frequently collaborate with businesses to co-fund projects or organizations in which they share an interest. In some fields, such as banking or retailing, foundations actively support research and advocacy aimed at changing business practices — work that often focuses scrutiny and pressure on particular firms.

Some grantmakers actively seek out alliances with businesses, forging partnerships in which the goals of the two parties are not identical but can be powerfully complementary. Some grantmaking goals can be achieved only with the involvement — and ideally the cooperation — of private industry. As one long-time funder of anti-poverty programs explained, “Many of the resources people need to build a good life for themselves are provided by the private sector. They hire people, they fire people, they put productive facilities in places, they purchase goods and materials. It’s hard to ignore a sector of society that has such a pervasive influence — potentially both for good and for bad.” In his program area, he argues, “if we want to improve people’s life chances, we have to find ways to engage the private sector.”

Reasonable as various forms of cooperation might seem, cooperation is never simple. Some alliances raise practical and philosophical concerns for both parties. Many grant makers are understandably wary of using philanthropic dollars in ways that might appear to promote private gain. Corporations, accountable to shareholders, may be reluctant to be seen as dispensing money for social goals unrelated to their primary business mission. Each side may be inclined to see an alliance as a slippery slope, leading to things they would rather avoid — or, in philanthropy’s case, things that are legally prohibited.

Plus, as several grantmakers pointed out, there exists in philanthropy a tendency to “demonize” the private sector. “When we started this [collaboration with business] a few years ago,” one grant maker recalled, “we were pretty roundly attacked by colleagues who asked, ‘Why are you trying to partner with them? You should be beating up on them!’” The more legitimate question for grantmakers, he argues, is “What can we possibly do to influence the way the private sector operates?” For him, the answer includes strategic alliances with partners in the private sector.