At the CECP conference on June 5, I was asked to speak about Alcoa Foundation’s international giving practices to discuss the challenges and opportunities of large, macro grantmaking vs. localized community-based engagement. I was joined by Carmen Perez from CECP and Sheila Warren from NGOSource. Carmen started the panel by laying out four primary ways that organizations can give globally:
- From headquarters to U.S. 501c3 and intermediaries which move money abroad
- From headquarters directly to local NGO partners
- Establish foundations in other countries
- Autonomous contribution programs of regions and subsidiaries.
Alcoa and Alcoa Foundation currently practice each of these four ways of giving. Most corporate philanthropy professions want to know about the second one - how to give directly to local nonprofits around the globe.
Each Alcoa operating location has someone who oversees Alcoa Foundation programs managing the Community Framework to maintain an open dialogue with community leaders, and working with local nonprofits to develop partnerships based on the themes and subthemes related to environment, education and community enhancement. In fact, half of Alcoa Foundation’s budget every year goes to our locations to develop local partnerships. These partnerships are formed at the local level and then the application and approval process is managed by Alcoa Foundation headquarters in the U.S.
This “micro grantmaking approach” has its challenges. In the U.S., the IRS gives nonprofits a 501c3 status and there are resources such as Charity Navigator and Guidestar that substantiate the legitimacy of organizations. In many other countries government classifications and third party verifications do not exist. To verify that our international grantees are equivalent to a U.S. 501c3, we perform vetting internally and require all applications and supporting materials be submitted in English. For small nonprofits that operate in countries where English is not the native language, this application process is time consuming. Our colleagues on the ground often work closely with the grantees to ensure all the required materials are translated and submitted correctly – a time consuming process for Alcoa staff.
We strongly believe it is worth the extra administrative work to be able to offer localized programs and support smaller nonprofits in the regions where we operate, as opposed to just working with large multinational nonprofits with 501c3 status. The primary upsides include:
- Programs that are culturally relevant in each of our 24 countries
- The ability for locations to choose the focus areas, within education and environment, that are most relevant to their community
- Flexibility to partner with organizations that do not have a global presence
- Local stakeholder engagement
- Helps develop environmental, educational and social organizations and expertise in the communities where we operate