McKinsey & Company

McKinsey on Society


Voices Social innovation

Tapping corporate expertise to improve lives

Joe CerrellThe Bill and Melinda Gates Foundation

Joe Cerrell is the director of the Europe office of the Bill & Melinda Gates Foundation. Prior to joining the foundation, Cerrell served as assistant press secretary to former US Vice President Al Gore. He has also served as vice president of the philanthropy practice at APCO Worldwide, overseeing the agency’s nonprofit and foundation clients. He is currently on the boards of the ONE Campaign and Comic Relief. Cerrell received a bachelor’s degree from the University of Southern California.

The TakeawayWith government budgets strained during the economic downturn, foreign aid levels are unlikely to rise significantly. That will make corporate contributions to social causes such as health and education in the developing world crucial. But companies have different ways of giving and different incentives. Social innovators need to understand these nuances if they are to successfully engage corporate partners.

It used to be that when I went to talk to companies about stepping up their contributions to social causes in Africa, I would be ushered in to the corporate social responsibility department. But times have changed. These days, I usually start with someone in business development—and may end up with someone in the CEO’s office. That’s because smart companies are starting to see Africa as an emerging investment opportunity. While more established markets may be sagging, Africa is fast becoming one of the most attractive regions for expansion—studies show current purchasing power on the African continent at $1.3 trillion. Indeed, the story of Africa’s rise may be one of the most dramatic and important developments of this century, and one that’s still just in the beginning stages.

But before robust markets can develop, many African nations will require help in addressing serious issues such as health, education, and sustainable agriculture. While aid from wealthy governments will continue to be important for these development priorities, given the global economic outlook, it is unlikely that funding will continue the strong upward trajectory of the last ten years. It’s crucial, therefore, that other actors step up. Thankfully, multinational corporations are beginning to do just that. Though corporate engagement in this regard is not new, the scale of involvement is. Many companies that have expanded in the region have brought with them a commitment to support the communities in which they’re now working.

To maximize the potential of corporate engagement, it’s important to understand differences in the way governments and companies tackle thorny development challenges. A typical government response is to provide aid in the form of cash and technical support. Companies, on the other hand, will look for ways they can tap their core competencies—for example, more efficient supply chain management or health care delivery—as well as their management and marketing skills, rather than simply writing a check.

The incentives for company involvement also differ dramatically from that of sovereign governments. In the past, rich countries often used aid as a way to forge alliances with nations whose proximity offered strategic defense advantages. Companies that engage with developing countries increasingly do so based on the prospect of diversifying their supply chains and opening up new markets.

Recently I met with a consumer products company that provided a good example of the ways companies can contribute. This organization has deep knowledge and insights regarding marketing to some of the most difficult-to-reach places on earth. A company executive told me that well-meaning non-profit organizations often ask it to transport health commodities like mosquito nets or condoms, which it can’t easily do because its supply chain is complex and highly decentralized.

Instead, the executive continued, his company would be better utilized as a consultant that could advise organizations on supply and distribution strategies as well as how to market products to consumers. Today, the Gates Foundation is working with this company on an initiative to improve the way health ministries in African countries buy, store, and deliver vaccines, as well as a strategy for encouraging parents in those countries to get their children immunized.

Another promising strategy for corporate involvement in development issues is a recent partnership to increase childhood vaccination in poorer countries. In June, the Bill & Melinda Gates Foundation and the UK government launched the GAVI Matching Fund, an initiative that matches corporate donations to GAVI1 up to about $125 million. Companies that have signed on so far include Anglo American, JP Morgan Chase, and Spanish bank la Caixa.

Like many others who work in the nonprofit sector, I’ve spent considerable time in the last several years figuring out ways to increase corporate involvement in issues such as healthcare in Africa and other developing regions. Too often, I’ve made the mistake of thinking of companies as financial donors when the real value lies in getting them to unlock their knowledge and talent to pursue solutions to complex problems. And increasingly, companies are willing to step up. Indeed, a recent UN survey of companies found that more than 70 percent of respondents said their chief executives were actively involved in development initiatives. This is a positive trend.

1Global Alliance for Vaccines and Immunization, a Geneva-based multilateral organization.

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