Philanthropists and impact investors play a major role in driving systemic change and cross-sector collaborations for a more sustainable positive impact on people and planet. However, there is a promising avenue that most of them probably have yet to explore: collective corporate impact strategies.

Over the last decade, philanthropists and impact investors across the world have increasingly started to prioritise systems change. As societal challenges persist – despite individual efforts – the notion to address underlying root causes of societal problems, together with a wide range of stakeholders, has become a more common aspiration, recognising cross-sector partnerships as a vital component of a systemic approach. Such partnerships can bring diverse resources, different types of capital, complementary views, and expertise together to develop interventions that can sustainably address societal challenges.

Not surprisingly, companies have been identified as a potential lever to expand and sustain societal impact. In this context, a growing number of foundations are looking for opportunities to engage and mobilise corporate assets. While many corporate foundations have traditionally kept corporate philanthropy clearly separate from the company, around 70 per cent of foundations[1] are now seeking strategic alignment with their related company. Corporate foundations and other corporate social investors (e.g. corporate impact funds, corporate social accelerators) have realised that by aligning on themes or societal challenges that also relate to the business, they can utilise corporate resources more strategically for their own impact, while also sending positive impulses about social investment opportunities to the company.

Yet, to truly move towards more holistic and lasting impact strategies, such bilateral partnerships have their limitations. One limitation is that corporate foundations are often restricted by law or by their mission scope from working closely with their founding company, placing their charitable status and credibility at risk. Another limit is that some foundations can only issue grants, while other financial instruments, like debt and equity, might be more appropriate to create scalable social impact. On the other hand, companies are often restricted to financial investments that yield a certain financial return. If corporate foundations and companies really want to move towards more holistic approaches, they need to find new ways to bridge the philanthropic work of a foundation and the commercial interest of a company.

Read the full article about corporate impact by Karoline Heitmann, Lonneke Roza, Alessia Gianoncelli, and Steven Serneels at Alliance Magazine.