8 December 2009 Christina Gold
For many organisations, corporate citizenship and philanthropic initiatives have survived the global downturn. As Western Union president and CEO Christina Gold explains to Jim Banks, such programmes are still needed, and corporations must continue to improve the lives of consumers.
Far from dampening the philanthropic endeavours of big business, the stresses of the global downturn have seen these efforts flourish. So says the Committee Encouraging Corporate Philanthropy (CECP), which reports that over half of the companies in its analysis increased their philanthropic activities in 2008 in spite of the gloomy economy.
The CECP's annual survey of almost 140 leading companies showed that 53% had increased their philanthropic donations, and 27% had raised their giving by over 10% compared with the previous year. This comes at a time when 70% of those companies had seen corporate profits decline or turn into a loss during the same period.
Despite the challenging economic environment, many business leaders are continuing to support their companies' commitments to rebuilding communities and advancing social and environmental programmes.
"Philanthropy is very important, and when we look at our business we see customers striving to make better lives for their families in the countries in which we operate," says Christina Gold, Western Union president and chief executive officer. "Philanthropy is a key part of our business values. We don't see a negative effect of philanthropy, and the CECP has done a lot to bring it to the attention of CEOs."
Gold oversees a $5.3bn company that has become a world leader in money transfer, bill payment and prepaid services, and which has a network of over 400,000 agent locations in 200 countries, along with an employee base of over 6,700 people in 50 countries. Her perspective on corporate giving is particularly apposite, given that the company is the recipient of the CECP's 2009 Excellence Award. Western Union received the CECP Large Company Award, given annually to a company with revenues greater than $3bn that has excelled in its philanthropic efforts.
The business is certainly in a strong financial position, which goes some way to explaining its ability to embrace its corporate social responsibility agenda, and Gold accepts that philanthropy must be related to the underlying strength of any organisation.
"Philanthropy depends very much on the kind of business you are in," she says. "We have a sound business that is still growing and philanthropy is needed more than ever. Our business is about people sending money home, although we've seen them send less money because of the downturn. Companies like us must step up to the plate."
Empathy in action
One of Gold's priorities when it comes to Western Union's approach to philanthropy is to ensure that the organisation does more than pay lip service to ideals of generosity and altruism. Its efforts must be real, focused and effective.
Western Union has already made a $50m commitment to the Our World, Our Family initiative, which is the company's latest and most comprehensive corporate citizenship initiative. The aim of the foundation is to empower families through education and economic opportunities, not merely to boost the profile of the company or tick a box on its CSR agenda.
"It is a foundation that includes us, our staff and our stakeholders,"says Gold. "It has delivered some awesome projects, such as the one in Mexico in 2008, in which rural people banded together to form a dairy. For every dollar the main bankers put in, we match it. There have also been programmes in education.
"Migration should be a choice, not a necessity, so we try to help with regional job creation. We saw a case in which a man had gone from Mexico to Chicago to wash cars. Now he can be part of the dairy, which has made a big change to his family."
Gold believes it is important to keep the company's philanthropic projects separate from its corporate strategic agenda, although its efforts to give something back to the global community are certainly tied to the needs of its customers. To achieve this, she believes it is vital to keep a clear division in place by ensuring that it is not the CEO directing the initiatives.
Instead, the foundation that distributes funds on behalf of Western Union is run by a board which has the responsibility of focusing on where the value lies for the people receiving the money and support.
Furthermore, Western Union's efforts also show that philanthropic initiatives can be undertaken by companies that have recently undergone significant change. The company has a 150-year history in transferring funds around the world, but in 2006 it spun off from First Data to begin trading as an independent company.
"Many companies have an entrenched culture of giving, but we have worked hard to make it a reality in the last three years," explains Gold. "When I was at Avon, we launched a foundation for breast cancer awareness, and since then I have worked on Western Union's foundation with our customers."
It is no surprise that Western Union's model stresses the engagement of participants as well as ensuring that any money given reaches its intended destination. The approach is based around four tenets that define which projects the company will engage in: giving, striving, learning and speaking. This means providing funds, helping businesses, acquiring skills and acting as advocates to provide a voice for migrant workers.
"Our customers are the people who send up to around $70bn home each year through our business, and we need to connect our giving to those customers," explains Gold. "Around 70% of our business is outside the US, so it is the same with our giving. There is a match between our business and our philanthropic efforts. It is part of good corporate citizenship. It needs to be part of our corporate ethics, as well as our level of business success.
"Giving helps our customers, but it also gives our employees some pride, and those kinds of intangible benefits are very valuable. There is a sense of mission for our representatives and employees. Our values are respect, integrity, teamwork and opportunity, but above all it is passion that makes the difference for our customers and the business."
In order for its projects to have integrity there must be close engagement at all levels within the company, not solely among the members of the foundation's board.
"We vet vigorously to ensure that the money goes where it is meant to go," says Gold. "Our company has a strong emotional involvement from our employees because they see how people's lives are touched. Our current programme is for the next five years, and we can't stop and start.
"There must be commitment. I am very proud of my company and I am certain there will be greater things to come from our organisation in the future."
Western Union has set the standard for corporate philanthropy, as the CECP has made clear, and Gold's advice should be heeded by any company that recognises the importance of its responsibility to the global community, whether the global economy is in a period of boom or bust.