The Relation Between Corporate Philanthropy and Territorial Development in Brazil: Mapping the Corporate Social Managers’ Perspectives

A Relação entre Filantropia Empresarial e Desenvolvimento Territorial no Brasil: Um Mapeamento das Perspectivas dos Gestores Sociais Corporativos

La Relación entre la Filantropía Empresarial y Desarrollo Territorial en el Brasil: Mapeo de las Perspectivas de los Gestores Sociales Corporativos

Esta obra está bajo una Licencia Creative Commons Atribución-NoComercial-SinDerivar 4.0 Internacional.

In the past decades, corporate philanthropy (CP) has gained relevance as large companies, with great level of influence in the development paths of the localities where they operate, base their social agendas upon this concept. CP (commonly referred in Brazil as corporate social investment) has been a significant source for social investments in the country: the more than 300 companies and business foundations covered by the report Benchmarking of Corporate Social Investment (BISC) invested approximately US$ 454 million in 2019 (Comunitas, 2020). CP has been generally associated with community relationships, while corporate social responsibility (CSR) is more related to the interface with other business’s stakeholders (Garriga & Melé, 2004).

Built upon the differentiation from CSR, CP is defined in Brazil as the “voluntary transfer of private resources in a planned, monitored and systematic way for social, environmental and cultural projects of public interest" (GIFE, 2020). It emerged as a category of corporate social action in the 1990s (Nogueira & Schommer, 2009; Oliva, 2016) and includes all financial resources, goods and services destined by companies to projects and activities of social interest (Comunitas, 2019). During the last three decades, this type of investment has been carved by the practice of the private organizations and its identity increasingly shaped by incorporating management tools, professionalizing both the leading and technical staff, and seeking efficiency and greater impact on investments. Hence, there is a CP culture being strengthened in Brazil based on the efforts to plan, to design actions upon structured strategies, and to monitor and evaluate the results of the investments (Degenszajn & Ribeiro, 2013).

Regarding the relationship between social investment and business activities, it is possible to identify three main CP phases in Brazil. Before the 1990s, philanthropy was a synonym of assistentialist practices with no orientation towards planned, monitored and systematic results. From the 1990s to early 2000s, the independence of CP’s projects decision-making and execution from the sponsor company was a flag. After that, the increasing pressure from society for transparency and social control over the corporations’ performances propelled the communication of social investment linked to the business. From 2005 on, there is a trend to straighten the corporate institutes and foundations to the companies’ social responsibility practices, as well as to influence these organizations with the perspectives and interests of the businesses’ top management.

More recently, new trends have marked the CP agenda: the alignment between corporate social investment and business practices, the alignment of this type of investments with public policies, and the focus on community relationships in locations around the corporate operations (Comunitas, 2020; Oliva, 2016; Pagotto et al., 2016). Another CP trend relates to territorial development, which is often associated with corporate community relations (CCR), and mainly targeting education, infrastructure and income generation projects based on a communitarian approach (Comunitas, 2020).

Despite the dissemination of CP practices in the last years in Brazil, the national literature is restricted to the historical perspective (Nogueira & Schommer, 2009; Rossetti, 2010), to the analysis of challenges, potentialities and tendencies of the agenda (Cabral, 2013; Lessa & Rossetti, 2016), and to the systematization of experiences and investments over time (Comunitas, 2019; GIFE, 2019). Also, the incorporation of a territorial approach for social investment projects has not been properly discussed so far either by its practitioners or scholars (Harrow & Jung, 2016). There is a lack of academic research (Nogueira & Schommer, 2009) and empirical debate on the meanings that the stakeholders, including the sponsor company, confer to CP aimed at collaborating to territorial development.

This paper aims at discussing the relation between CP and territorial development in Brazil from the corporate social managers perspectives. Considering the other current trends in corporate social investment - especially its alignment with core business - this article seeks to explore the extent of the sound appropriation of the territorial development approach as the focus of social actions by companies, institutes and foundations. In this way, it contributes to advance the understanding of the meanings and potential consequences of large companies incorporating the territorial approach in their social investments.

Our interest lies over the corporate investment operated by companies either through their business units or through corporate foundations and institutes, using private or public (fiscal incentive) resources. For this purpose, we reviewed the literature, conducted a focus group and semi-structured interviews with corporate social managers of large companies, foundations and institutes from different Brazilian regions.

The following sessions present the theoretical debate about CP, territorial development and corporate community relations; the data collected, analysed and findings from the interviews in dialogue with the literature; and the limitations and main contributions of the research.

The concept can be characterized as a multifaceted, multi-stakeholder phenomenon whose drivers and outcomes are difficult to measure (Wood & Jones, 1995). CP is also described as voluntary donations of corporate resources to charitable causes (Gautier & Pache, 2013). Another interpretation explains CP as a non-obligatory and voluntary transfer of wealth or resources from the firm to outside entities (Saiia et al., 2003), or a common business practice involving voluntary, nonreciprocal transfer of goods (such as money, services etc.) from a corporation to another entity (Hadani & Coombes, 2015).

CP is considered an important aspect of CSR (Hadani & Coombes, 2015). Research has been exploring CP from various approaches, for instance: (i) the impact of CP on financial performance (Hadani & Coombes, 2015; Hogarth et al., 2016); (ii) the impact of CP on reputation for corporate social performance (Gardberg et al., 2017); (iii) corporate motivations for and consumer/public perceptions of corporate giving (Edwards, 2015); (iv) external pressures that drive corporate conduct (Brammer & Millington, 2005); (v) CP as a crucial element in corporate citizenship (Saiia et al., 2003).

CP is generally oriented by three main rationales, ranging from most altruistic to most profit-oriented (Gautier & Pache, 2013). Firstly, CP can be explained as a voluntary expression of the company’s commitment to the common good. Secondly, CP may be a long-term community-oriented investment through which companies ensure their competitiveness while fostering their business environment. Thirdly, CP relates to a marketing strategy, where the philanthropic act of giving is used as a commercial tool (Gautier & Pache, 2013; Hadani & Coombes, 2015; Sasse & Trahan, 2007).

Strategic philanthropy (SP) gained strength from the 2000s on based on a dual objective: benefiting social welfare and financial profitability (Brammer et al. 2006; Bruch & Walter, 2005; Hemphill, 1999; Porter & Kramer, 2002; Saiia et al., 2003; Vveinhardt & Zygmantaite, 2015). Thus, as opposed to an altruistic behaviour, SP seeks to benefit the community but also the firm (Gautier & Pache, 2013; Saiia et al., 2003). In short, SP projects are strategically motivated giving that they produce a more specific, more measurable benefit in a relatively short-time period, and are focused on motivation, outcomes, implementation strategies, measuring benefit and impact and professional management (Liket & Maas, 2015; Saiia et al., 2003; Vveinhardt & Zygmantaite, 2015).

Since the 1970s, the concept of territory has gained ground in the areas of Geography, Anthropology, International Relations and Political Science. Some fields, such as Sociology and Public Administration, affirm the territorial approach to development to be one of the main innovations in public policy in the 2000s in Brazil and Latin America (Favareto & Lotta, 2017). From a Human Geography perspective, territorialization implies the rooting and identification of a group, organization or individual with a territory, both in political, economic, more material terms, and in cultural and symbolic terms, strongly immaterial (Haesbaert, 2007). More than political-administrative divisions, a territory is a result of the many power relations, considering both material and symbolic power, as well as of space-time interaction. In this way, a territory is configured by the historical, cultural, political and economic actions of the many actors that live, transit in, make sense of and transform the space (Santos, 1996; 2000).

The concept of territorial development is often associated with the potentialities, resources and institutional arrangements created in specific places and regions and with horizontal relations regarding local production and the relations of productive solidarity between agents and cities that make up a region (Fuini, 2014). While local development concerns what happens at a specific location in small scale (municipalities or communities), territorial development pertains to a process of construction of territorialities by local populations in interrelation between themselves and in relation with institutions and organizations that operate in different scales (Torre & Wallet, 2015) through which greater value is assigned to local features and territorial capital, as well as the common wellbeing.

The territorial approach to CP could be understood as the investment that enters this system, establishing new balances of power and changing the processes of territorialization and the course of territorial development (Sack, 1986 apud Haesbaert, 2007). Hence, the efforts to identify and understand the perspectives that, at the same time, rule and make sense of CP influence over territorial development is intrinsically tied to the reflection on how large companies, and their institutes and foundations, enter the territorial governance and incur in the collective process of definition, transformation and benefiting from the territorial dynamics.

This paper adopts the narrative analysis as the method to qualitatively (Chase, 2005) apprehend the interrelations between person (managers interviewed), stories (about CP and territorial development) and organizations (companies, foundations and institutes), placing the speaker in an organizational context (Czarniawska, 1998). Based on a two-fold strategy — a focus group and semi-structured interviews —we elaborate narrative models convening the main elements of the CP in Brazil (Anastasiadis, 2014).

Narrative is considered as a story containing a plot and coherence between the incidents and events (Boje, 2001). It can also be understood as a “logical, and sometimes causal, chaining of discontinuous unities” (Todorov, 1980 apud Alves & Blikstein, 2010:5). The discourse (or the sequence of phrases that makes sense upon the combination of linguistic elements) is the narrative basis, the means by which the content is transmitted. In its turn, the narrative is the way through which the past events are combined between themselves and to the present ones (Alves & Blikstein, 2010). The narrative analysis builds upon the “inscriptions of past performances and scripts and staging instructions for future performances” (Czarniawska, 1998:20).

Based on this approach, CP’s territorial dimension is the research focus to be developed through the stories stitched by narrators sitting in corporate positions. They replicate the organizations’ strategic communication (Alves & Blikstein, 2010; Boje 2001; Bryman, 2012; Czarniawska 1998) and, at the same time, reflect on the narratives, inserting elements, selecting the excerpts that deserve to be told, synthesizing meanings and transforming some intermediary messages in a dialogue between structure and agency, organizational culture and individual repertory.

The interviewers fostered a retrospective sense-making (Chase, 2005), starting from the conception of the CP, covering the organizational transformations, practices, stakeholders involved, results achieved, and current initiatives. We worked on the functions (actions) present in the narratives and on the indications of feelings, philosophies, beliefs that support the stories as they were told.

4.1 Data collection

We collected data following a two-fold strategy: focus group and semi-structured interviews. The unit of analysis is the corporate social managers responsible for implementing projects focused on territorial and/or local development in Brazil.

First, we conducted a focus group with 13 Brazilian corporate social managers from ten companies belonging to seven different sectors (Table 1). According to Bloor and colleagues, “focus groups can be used for the generation of information on collective views”, but also “will provide rich data on the group meanings associated with a given issue” (2002:4). Focus groups emphasize a specific theme or topic and the ways in which individuals discuss a certain issue as members of a group (Bryman, 2012). We facilitated the discussion that lasted three hours and 30 minutes.

Table 1
Detailed overview of the focus group’s participants

* A representative of one of the largest Brazilian associations bringing together corporate social managers was invited to the focus group given his prior knowledge and a comprehensive vision of the sector

We based the focus group’s facilitation on the Iceberg model as a methodological procedure, which provides the emergence of systemic thinking by looking at four dimensions: events, patterns and trends, structures and mental models. The model is used to visualize what is happening about a phenomenon, as well as the different institutions and influences that led to the situation (Goodman, 2002).

We considered the Iceberg model as a suitable procedure for the focus group due its capacity to incorporate a systems perspective, which is important to frame questions and make sense out of qualitative data (Patton, 2001). In total, 13 one-to-one semi-structured interviews were carried out with corporate social managers (Table 2). The interviews lasted between 40 minutes and one hour and 26 minutes and were conducted in Portuguese, audio-recorded and transcribed.

Table 2
Detailed overview of the semi structured interviews’ participants

For both the focus group and the semi-structured interviews, the participants were invited based on the identification of companies that publicly declare to develop corporate social investment of territorial type on the following Brazilian databases: (i) Corporate Sustainability Index (ISE); (ii) Exame Sustainability Guide; and (iii) Group of Institutes, Foundations and Enterprises (GIFE) (a non-profit organization that is the major Brazilian reference in the field of corporate social investment). For participating in the focus group, 46 invitations were sent and the authors received 13 acceptances. As for the semi-structured interviews, 22 invitations were sent and the authors received 13 acceptances. Two participants were present at both events.

4.2 Data analysis procedures

The results obtained in the focus group guided the semi-structured interviews’ questionnaire development. By drawing on the group’s responses to the events, patterns and trends, structures, and mental models (focus group guidelines) related to CP’s territorial dimension, questions were elaborated to further investigate this kind of corporate social investment features in Brazil through the interviews. Thus, the semi-structured interviews guidelines reflect the issues that emerged as determinant for understanding the CP in Brazil and its relation to territorial development and should be explored based on each corporate social manager experience. The interviewees’ answers, in turn, derived the categories of analysis used to identify the narratives used by corporate social managers to make sense of their CP’s territorial strategies. Thus, the categories of analysis were formulated and revised through an iterative process as the results of the focus group and interviews were interpreted. Table 3 synthesizes the components of the Iceberg model, explored in the focus group, the elements further investigated in the semi-structured interviews and the resulting categories of analysis.

Table 3
Synthesis of focus group and semistructured interviews’ guidelines and categories of analysis

Nine analytical categories were identified based on central ideas that emerged from the narratives extracted from both the focus group and the interviews: either because they are common to various speeches, or because they present central ideas that stand out in relation to the topic explored here. Accordingly, the narratives drawn in this research resound individual-collective understandings of the involved corporate social managers on strategy of action, territorial development, objectives and motivations, decision-making criteria and public interest.

This section starts by discussing the corporate social managers’ view on territorial development. It then turns to assembling their three major perspectives to make sense of their practices considering the territorial dimension of philanthropy in Brazil.

Territorial development - as a trend itself - relates to the other trends previously indicated in this article (the alignment between corporate social investment and business practices, and the alignment of this type of investments with public policies) since it mobilizes a public outlook on the part of the social corporate manager, but still from a private perspective given the trend to align social actions with core business and corporate practices. Taking this into account, this article articulates conceptual and empirical contributions (as presented below).

Overall, it can be said that the empirical phenomenon of territorial approach to corporate social investment in Brazil evokes conceptual aspects mobilized for this article’s development, as shown in Figure 1.

Figure 1: Conceptual and empirical definitions of the territorial approach to corporate philanthropy

The territorial development approach is the expression of two trends of the CP in Brazil: the alignment between CP and public policies, and the alignment between CP and business practices (Comunitas, 2019; Oliva, 2016; Pagotto et al., 2016). And how come the territorial type of CP has established itself as a trend? Firstly, it takes place in the territories where companies operate and this guarantees the sustainability of corporate institutes and foundations in Brazil, as it is easier to justify to the business as strategic philanthropy (Brammer et al. 2006; Bruch & Walter, 2005; Hemphill, 1999; Porter & Kramer, 2002; Saiia et al., 2003; Vveinhardt & Zygmantaite, 2015). It is worth noting that CP is the predominant agenda of Brazilian philanthropy in terms of the type of social managers and the amount of investments (GIFE, 2018). Secondly, the territorial approach has become a buzzword after decades of its incorporation in early decades in development projects (from the 1970s on), then in public policies (from the 1990s on), until it reaches CP in Brazil in the 21^st century (Favareto & Lotta, 2017). Thirdly, CP of territorial type reflects an attempt to advance development practices in Brazil, looking at rural-urban realities in a more coordinated way based on multi-level and multi-stakeholder governance (Favareto & Lotta, 2017). Fourthly, it reflects a series of gaps in the reach of the State at the municipal level in Brazil and the institutional weaknesses that the country has in terms of implementing public policies at this administrative level. Nationally, there are many regions still characterized by basic services’ deprivation, especially in remote regions, which is mostly where large companies operate.

At the same time, the territorial approach of CP also reflects the Brazilian political process in the last decades, characterized by the re-democratization begun in the late 1980s. It was based, among other aspects, on political decentralization, participatory democracy, citizen inclusion and political innovation considering reality and local potential (Abrucio, 2007). In parallel, the notion of territorial governance is intensified in the country, based on the assumption of a territorial development vision, interpreted as a spatially coordinated local development that requires the interaction of actors operating at multiple planning and administration scales (Romeo, 2013). It is also used in the context of initiatives or actions that express the capacity of a territorially organized society to manage public affairs from cooperative involvement of social, economic, and institutional actors (Dallabrida, 2011). This multiplicity of relationships and interests is connected to common planning vision, or a shared territorial vision, based on the recognition and valorisation of territorial capital and cohesion at different levels (Davoudi et al., 2008).

The social managers’ perspectives also trigger a set of reflections about the next wave of CP focused on territorial development. If the corporate social managers consulted refer to a scenario of historical change in the way they relate to communities and territories (from the assistentialist approach to the need of strengthening of local institutional capacities and participation), we perceive the importance of going beyond the clichés such as “There is no silver bullet.” and “Give a man a fish, he eats for a day. Teach a man how to fish, he eats for a lifetime.” and to structure a qualified debate in Brazil on CP and territorial development.

In the spirit of the territorial approach to development, it makes sense for corporate social managers to participate and support the development path of the localities in which the respective holding companies operate, even reducing the dependence of such localities on the resources of corporate social managers, in the figure of the sponsor companies or their institutes and foundations. In this context, the manifestation of corporate citizenship and the commitment to the common good (Gautier & Pache, 2013; Matten & Crane, 2005; Saiia et al., 2003) are favourable.

In this sense, the inclusion of the territorial notion into the practices of CP brings advances to the field. One of them is the intention, on the part of social managers, to improve their practices when they relate to communities. Acting territorially requires a greater level of sophistication in terms of the social interventions’ processes and results in territories throughout Brazil. And this leads, in general, to a process of collective learning and maturation of the CP practices.

Another advance concerns the complexity of today's social challenges and the demand for joint and multidimensional actions. If companies, their institutes and foundations can contribute to the implementation of social projects, especially in needy regions, this may represent a hope that other actors can join forces and make actions gain scale by, for example, public policies.

However, a constant critique of CP’s limitations of the CP contribution to the local trajectories of territorial development that require autonomy and local participation is necessary. For example, there is no homogeneous understanding of what a territorial approach to development is (Harrow & Jung, 2016). This means that there can be a misuse of what is truly territorial development by means of rhetorically incorporating this concept into corporate ideological discourse, and that it is easily confused with more simplistic community relations practices (Fuini, 2014; Haesbaert, 2007).

Another limitation is related to the fact that companies, corporate institutes and foundations place themselves as facilitators of the process of territorial development, with possible implications: to generate dependence on the community (even if there is the underlying premise that the company is only a facilitator) whether financial or paternalistically; to have the corporate social investments stopped at any time if the company decides to leave the territory, even if this has not been identified as a risk by the interviewees and the focal group participants carried out for this research; and/or to dictate the paths of the local development due historical and stiffened power relations, for instance based on organizational position, social class or education level, which tend to be replicated in pretended collaborative processes if not explicit considered and addressed by the facilitators.

This article provides conceptual and empirical contributions to advancing the understanding of the incorporation of territorial development approach into the social investment strategies of large companies in Brazil. By identifying the perspectives through which the corporate social managers give sense to this approach, this research spots light into some of their potentialities and concerns regarding the territorial development as collective process mediated by power relations, community dependence and social participation, strengthening of public administration and alignment of CP to public policies and creation of shared value and obtaining social license for the business to operate.

Thus, this article reconciles the literature about corporate philanthropy and corporate community relations, and the territorial development agenda in Brazil. A specific look at this country’s perspective on the role of corporate social managers in territorial development exposes the reality faced by an emerging economy in terms of fragilities and gaps of local institutions and governance, but also in terms of the need to improve corporate philanthropy practices and conceptualization.

Researching about CP is a challenging choice within the Brazilian context. The lack of consistent and rigorous research on the strategies and practices of corporate social managers and the current dynamism of corporate giving in the country are some examples of the challenges. At the same time, some recent trends, such as the alignment of CP focused on territorial development between, on one side, to the core business, and, on the other, to public policies, are introducing a favourable and fertile environment for advancing the knowledge available about the meaning and practices of social managers.

The results raise questions about the roles and responsibilities of businesses and its impacts on territorial development and, on the other hand, of the corporate social manager and its contribution to the development of the localities where a company operates. In this sense, the question about the limits of the performance of this type of corporate investment in the field of public policies is also relevant. If, on one hand, it can be positive for the improvement of corporate philanthropy actions and support the long-term initiative (as highlighted by the literature on territorial development), on the other hand, there is a possible confusion between the public and private dimensions.

In this context, further research could add fruitful insights to the role of CP in Brazil in terms of fostering territorial development. An interesting topic that would benefit researchers and policymakers understanding on this role includes an in-depth sector analysis of the main raw material industry (forest-based, metal, mineral and non-energy extractive industries, and non-metallic minerals industries), in order to comprehend specifics about the relationship between these type of industries and local communities. Moreover, it would be of great value a comprehensive analysis on the risks, opportunities and effects of the alignment of CP focused on territorial development to (i) core business, and (ii) local public policies as regards to the public interest. Finally, a broader understanding on the meanings of territorial development fostered by corporate social managers would demand a qualitative research approach to local actors, including interviews with civil society, local public administration and company’s representatives.

The research was funded by GVpesquisa.