UPS driver Andy He Jinchang brings more than just boxes to his hometown of Guangzhou, China. Jinchang has developed a culture of volunteerism in the small town, an accomplishment that earned him the company's Jim Casey Community Service Award. The award is given by UPS (UPS) each year to one of its 425,000 employees. About 10 years ago, Jinchang started the "One Person, One Dictionary" project: He collects dictionaries for local schoolchildren who might otherwise have to rely on research materials in their schools, often miles away from the rural communities.
Jinchang is just one example of the success that UPS has achieved in globalizing its philanthropic efforts. The UPS Foundation, which started in 1951, has gone through major changes with President Lisa Hamilton at the helm. Of the approximately $30 million the foundation was making in grants in 2000, only about $385,000 was being donated outside the U.S. Now, the company donates approximately 10% of its $47 million grant budget overseas. Hamilton's goal is to get that number to 15%.
She says much of this change has to do with the natural progression of the company: As UPS expanded globally, a key part of its corporate culture had to follow suit. "As we entered the new millennium we realized our business had become very much a global business but our philanthropy was lagging behind," Hamilton says.
Changing Perceptions of Philanthropy
Back in 2003, Chief Operating Officer David Abney, then president of UPS's international group, took notice of the tremendous need in countries where the company operates and encouraged the foundation to reassess its priorities. After taking a year off from grant-making and researching volunteerism in different parts of the world, the company began various endeavors to make its philanthropy global. In 2003 the company had 628 international employees doing a total of 7,688 hours of volunteering. Last year, the number of international employees was up to 6,200, with 28,000 hours of community service logged.
The company has had great success with Global Volunteer Week, a program it began several years ago. "We were told that European and Asian employees weren't likely to participate for cultural reasons," Hamilton recalls. The research indicated that certain employees would consider volunteerism and philanthropy a private matter. "But that wasn't the case," says Hamilton. "All regions embraced the week of volunteerism, exceeding our expectations."
But Hamilton and UPS still face challenges in spreading its corporate social responsibility (CSR) message. Indeed, while the total number of volunteer hours almost quadrupled between 2003 and 2007, the average number of hours per employee has dropped. Another challenge is that in places such as China, volunteerism and philanthropy are viewed not as private matters but government ones. That makes it difficult even to provide grants, let alone encourage volunteerism.
Baby Steps in Brazil
In China, the UPS Foundation set up its own charitable programs in areas where none existed and gave a three-day training session on nonprofit management. Trainees were drilled on issues such as public relations, strategic planning, and governance, all new areas for the local employees.
UPS also tailors local philanthropy programs according to the degree to which volunteerism already exists in a particular area. For example, while workers in the U.S. are required to put in 120 hours of volunteer work each year, those in Brazil were encouraged to begin with a minimum of 20 hours because there wasn't a lot of familiarity with corporate-led charitable initiatives.
The company's philanthropic efforts continue to spread to new regions of the world as its drivers and business leaders cover more international ground. "The experience helps to bond [local employees] with UPS's legacy of community service," says Hamilton, and she sees a growing pride among employees who are embracing the CSR message. "In Germany, for instance, photos from volunteer events are prominently displayed at UPS locations." And Jinchang, one of China's first UPS drivers, continues to drive his truck around Guangzhou, delivering more than just packages to the locals.
Analysts say a top-down approach to establishing a culture of volunteerism is key in parts of the world where there is none
One of the biggest challenges UPS faces in bringing its philanthropy programs to foreign markets is the lack of acceptance or lack of establishment of a volunteer culture in many foreign countries. Charles Moore, executive director of the Committee Encouraging Corporate Philanthropy, says leadership on this issue has to come from the top. (Editor's note: CECP's chairman, Harold McGraw III, is chairman of the McGraw-Hill Companies, which owns BusinessWeek.)
Moore has just completed a study with McKinsey examining the role of CEOs in corporate social responsibility, assessing what needs aren't being met and how philanthropy is incorporated into corporate culture from the top down. As CEO of UPS, Scott Davis was responsible for establishing philanthropy as part of UPS's corporate culture. All UPS employees are required to serve a certain amount of hours of community service; the amount depends on where employees are stationed. Different regions have different resources, different needs, and different cultural attitudes toward philanthropy and corporate social responsibility.
Even for a company with the resources and global reach of UPS, there are hurdles when entering different countries, points out Moore. There are ingrained cultural prejudices against the idea of individuals and corporations being involved in philanthropy. And the U.S. is the only country that offers tax deductions for individual giving. Such a lack of support for the idea of charitable giving helps create cultures where it is deemed unimportant or irrelevant.
Making Sure Local Employees Feel Comfortable
However, Jane Wales, CEO of World Affairs Council and the Global Philanthropy Forum, believes companies are slowly finding more acceptance abroad for corporate philanthropy practices. "The visibility of philanthropy has grown enormously with the entry of significant individual philanthropists and an increasing [amount of corporate activity] in the field," she says. "No longer is corporate philanthropy an aside to improve relations with the customer or [where] a company operates. Corporations have decided to make a contribution to the social good, and have that be central to the value chain of the company."
Wales also notes that corporations are given more leeway when it comes to establishing volunteerism in places like China because social entrepreneurship and philanthropy encourage other kinds of entrepreneurship and economic activity. But she cautions that even so, employers need to ensure that local employees are comfortable with the company's approach to philanthropy and that local, municipal, and national governments understand what is being done so that the venture can serve as a public model.