On Corporate Giving and Philanthropy in Brazil

by | May 13, 2002

Brazil’s culture of philanthropy developed during the 19th and the 20th centuries, ranging from the contributions of immigrant industrialists through the establishment of charitable hospitals, museums and poverty relief institutions, to the rise of corporate foundations, corporate contributions (in cash gifts, in-kind contributions or employee volunteerism), and the diffusion of the ethics of social responsibility of companies and corporate citizenship.

Facts and Findings at a Glance

In the 90’s and through 2001, businesses have increasingly joined the spirit of giving. According to the Instituto de Pesquisa Economica Aplicada’s 2001 national survey, the social investments of companies in the formal sector (cash gifts only) in the urbanized, industrialized southeast were about $1.5 billion dollars. This region of Brazil is home to half its companies, and represents 60% of Brazil’s GDP. Two out of every three companies reported having made social investments ranging from small donations to individuals and institutions, to large structured and formalized projects. Almost half the large companies planned to increase expenditures in social investments, and more than one third of the companies reported employee volunteerism.

A survey conducted among 1,715 companies by the Associacao dos Dirigentes de Vendas e Marketing do Brasil/ ADVB, the retail sectors’ largest association, found similar trends: 87% of the companies reported funding and development of social projects (community focused), with expenditures mounting to about $60 million dollars, 67% reported employee volunteerism, 95% reported that social responsibility has been incorporated to the companies strategic vision, 62% develop programs for consciousness-raising on social responsibility issues; and 83% have partnerships with other organizations (including with the third sector).

Another corporate-based organization, Grupo de Institutos, Fundacoes e Empresas (GIFE), a donor membership organization, reported that 48 of their members together made a social investment around $212 million in the year 2000, an increase of 15.7% between 1997-2000.

The increase in corporate giving can also be grasped through scattered figures provided by consulting firms: the rise in the number of conferences, seminars and law firms specialized in philanthropy issues; the growth of consumer advocacy groups; the increased attention to philanthropy themes in the media. The growing number of corporate, family and community foundations, the creation of a national fund raisers association and the spread of executive education for non profit management and university graduate and certificate courses focused on the non profit sector are other indicators of this increase. Then there is the proliferation of awards for best practices based on ratings of both corporate citizenship performance and of charities performance granted by chambers of commerce, media companies, and non profit organizations. The upsurge of corporate based organizations advocating enhancement of corporate citizenship ethics and transparency of social responsibility data (like the Balanço Social das Empresas for reporting companies portfolio on social investments) also reflects the growth of the field. An increasing demand for careers in social auditing accompanies the creation of special investment funds by the banking system earmarked for socially responsible companies and projects.

The other side of the coin is the extent to which corporate citizenship has become important to Brazilian consumers when making investment and purchasing decisions (companies conduct with respect to business practices and its impact on stakeholders, community and society). An international survey last year (Indicador Opiniao Publica) showed how the public sees corporate social responsibility issues: in the Brazilian case 65% of the interviewees discussed the social or ethical behavior of companies with friends and relatives with friends and relatives at least once; 51% punished companies with socially irresponsible behaviors with respect to customer services and relations, environment policy, etc. by criticizing them with colleagues, friends or relatives; and 30% refused to purchase products or services from these companies. With regards to other social responsibility issues, Brazilians gave the highest ratings to companies commitments to environment performance in its operations and production (81%), support of community projects and charities (59%), and playing a role in reducing the gap between the rich and the poor (60%).

We also have a glimpse of public responses to recipients of charitable giving (from public or private sources) through a 2001 poll done by the Instituto Brasileiro de Opiniao Publica/ IBOPE for the NGO association known as Associacao Brasileira de Organizacoes Nao Governamentais/ ABONG. The poll reveals that consumers and taxpayers apply pressures on non profit organizations, as well as corporations, to engage in responsible practices. They showed concern about whether NGOs had a positive impact on Brazilian society with an approval rate of 58% (13% disapproval); 23% agreed that NGOs have an important role to play in Brazil, but that they should report on their sources of funding (23%), and should be overseen by the state (18%), and by the society (12%).

The Emergence of a New Corporate Culture

The big picture behind these facts is a quickly evolving corporate culture in Brazil that comprehends both pragmatic and ethical concerns about social inequalities, new views on distributive justice fostering private initiative to improve societal conditions, new trends in multisectoral partnerships and changing stocks of social capital.

In searching for the sources of philanthropic giving several questions can be raised: How are wealthy individuals and corporations drawn into the philanthropic world? What do social networks and organizational involvement have to do with diffusion of notions of social responsibility of companies? How can an environment conducive to philanthropic giving be enabled, and how are beliefs and commitments to corporate social responsibility passed on to the coming generations?

To illustrate this reflection we will comment on leading group of corporate leaders in Brazil that have taken a role of policy entrepreneurs. They have led the way in promoting values, principles and practices that are not only good for business but also good for (corporate) citizenship, and for ensuring accountability and effectiveness in philanthropy as a cornerstone of a democratic society.

The Forum of Business Leaders of the Gazeta Mercantil – the most influential financial multimedia company in Brazil – is a network of the one thousand leading business men and women across all sectors of the economy whose companies together correspond to the largest share of Brazil GDP, and who have been elected annually by the Gazeta Mercantil readers. Since 1977, readers have selected members from the national, regional business sectors using the criteria of prestige and prominence.

In its own words, the Forum’s mission is to express and communicate the thinking and beliefs of the most representative corporate groups in Brazil regarding the country’s economic, political and social reality. Since its beginning, the Forum had an important role in the democratic process, having publicly issued in 1978 the Documento dos Oito, a political statement that helped kick off the democratic opening, and in 1983 presented the Documento dos Doze with a proposal for state reforms consistent with a new democratic era. In 1998, the Instituto Forum de Lideres Empresariais da Gazeta Mercantil was created as a non-profit organization to better accomplish the Forum’s mission.

Still in 1998, the Forum expanded its geographic scope to include an exchange on social, economic and corporate philanthropy issues through the creation of the Forum of Leaders Mercosur. Its members were elected through the Gazeta Mercantil Latinoamericana, to “express and communicate the thinking of the business community in the Mercosur, and with other business networks elsewhere, to promote economic integration of the bloc, prosperity, preservation of the environment, and social justice.” The Foundation Forum of Leaders of the Mercosur became a NGO in 2000, when the Forum of Mercosur Leaders included 235 leaders from the four member countries, with scheduled plenary meetings rotating between Brazil, Argentina, Paraguay and Uruguay.

More recently, young entrepreneurs and/or leaders of business associations were appointed as members of the Forum’s Youth Council set up to work closely with the National Council of Young Entrepreneurs, and to coach the upcoming generations on broadening their relationships of trust with communities through social investing and to foster the emergence of new socially responsible business leadership.

The Forum of Leaders organizes its activities around thematic groups, including corporate social responsibility, and has developed several initiatives. Among these are 1) a Bank of Social Projects, to highlight companies best practices of social investments; 2) the creation of the Forum of Community (around arts, culture, and business) aimed at community outreach projects; 3) a Campaign of National Symbols, to foment identification with symbols of Brazilian nationality and citizenship, 4) a number of conferences and seminars around corporate citizenship issues targeting the business community.

In 2001 the Forum created the National Forum of Social Leaders, to contribute to promoting social justice in Brazil, to diffuse best practices and lessons learned in the non profit world regarding social responsibility. Through a collaboration among the Instituto Forum de Lideres Empresariais Gazeta Mercantil, Ashoka International/ Brazil chapter, and the Instituto Ethos Empresa e Responsabilidade Social (see related article in this issue), the Forum acts to facilitate partnership among social leaders, the private and the public sectors, through the exchange of information and networking to benefit the social entrepreneurship sector (those individuals who initiate and develop sustainable and innovative projects which have a social impact on communities). The Forum of Social Leaders includes a Social Merit Council (besides a Senior and an Executive Council) that will conduct the election of the social leaders on an annual basis. Elected leaders in 2001 encompass liberal professionals, business men and women, Catholic activists and leaders of community based organizations and other non-profit organizations. They will debate among themselves and look for ways to improve the lives perspectives of disenfranchised populations throughout Brazil.

A case in point is Zilda Arns, the national coordinator of the Pastoral da Crianca, a child-oriented program of the National Council of Bishops in Brazil/ CNBB. She heads up a group of 145,000 volunteers nationwide engaged in successful programs to reduce infant mortality and malnutrition in poverty-stricken areas of Brazil.

Looking ahead

The Forum’s economic and financial clout and its ample network extending beyond national borders, as well as its capacity to communicate ideas on social responsibility and on philanthropic giving is significant, and is becoming the most influential group of opinion makers in the business community in Brazil. However, the challenges ahead are enormous in view of shifting paradigms of corporate citizenship. In briefly scanning the business environment of a globalized Brazilian economy we can identify recurring issues such as an increased public awareness and scrutiny of corporate business practices. There’s also the pressing need to go beyond business success and financial performance to account for companies’ impact on the well being of communities, on ecology and on human rights; the increasing pressures on national and multinational corporations from both internal stakeholders (investors, shareholders, employees and suppliers) and from external stakeholders (customers, NGOs and communities) to comply with new codes of conduct that require the placement of social responsibility at the core of business values and of the overall business agenda; and the need to develop new modes of strategic partnership between the private, the public and the non profit sectors to address large scale social inequalities and human development issues.

Women in Philanthropy

It’s well known that women have been in the mainstream of philanthropic engagement for a long time (as individual and corporate donors of money, time, as members in non profit boards, and otherwise), but they tend to have less public visibility than their male counterparts. Little has been said about philanthropic work and social responsibility of women-led and women-owned companies in Brazil, in a way which is similar to the lesser visibility of the growing numbers of women owned enterprises and their strides in the business market. Out of a (gender) concern with fairness in the treatment of philanthropy subjects, the profiles of two outstanding women philanthropists in Brazil can be mentioned. Viviane Senna, president of the Ayrton Senna Institute, has managed a social investment of almost $5 million dollars in the year 2000. She has developed several projects targeting children and youth, including “Acelera Brasil” program that focused on upgrading education in public schools, and “Cidadao 21,” a program offering opportunities for underprivileged youth in the arts and communication. Milu Vilela is another female philanthropic leader. As president of the Museum of Modern Art in Sao Paulo she has championed giving and volunteering in benefit of the visual arts in Brazil for many years. Last year, Vilela, who was also president of the Brazil Committee for the United Nations International Year of Volunteers, sought and forged alliances between corporate donors, universities, foundations and nonprofits to promote engagement in volunteer work all over the country. The League of Women Voters (LIBRA), Brazil chapter, has had several initiatives in connecting women donors and charities seeking funds for their activities. Women’s sections of several professional organizations including the chambers of commerce, as well as business women’s associations have long had an agenda of volunteerism in social projects. These women’s activism in philanthropy are clear indicators of the increasing role of business women in the emergence of Brazil’s new ethos of corporate citizenship.

Spring 2002Volume I, Number 3

Sonia De Avelar is a J.P. Lemann Visiting Scholar at the David Rockefeller Center for Latin American Studies, and a consultant to international agencies, among others ILO and the UNDP. A Ph.D. in Political Science from the University of Michigan, Ann Arbor, she is currently researching corporate philanthropy in Brazil. She is co-author with Gina Zabludovsky of the book Empresarias y Ejecutivas en Mexico y Brasil (UNAM- Miguel Porrua 2001).

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