Philanthropy and Corporate Social Responsibility are getting more sophisticated. Donors and grantees spend ample time developing metrics and analysis to help determine if programs are successful in achieving the expected outcomes.

The key to measuring impact is to do this in partnership – to have a dialogue between donor and grantee about the goals of the program and how measurement is done. To that end, Alcoa Foundation will continue to strive for progress by asking ourselves:

  • Where we can have the most impact, leveraging not only Foundation dollars but also the knowledge of our employees?
  • How can we best quantify and report the impacts of our environmental and education programs?
  • Are we able to increase the impact of our investments and programs year over year?

Similar to the previous year, the outcomes we will track in 2013 include:

  • Reduce emissions and the use of natural resources
  • Develop and set standards around lifecycle and GHG emissions measurement
  • Promote environmental awareness and create environmental community ambassadors
  • Increase aluminum recycling, moving towards the aluminum industry’s goal of 75% by 2015
  • Replenish the land, primarily through effective tree planting
  • Develop solutions that make mass transportation and buildings more sustainable

  • Develop and partner on promoting science, technology, engineering and math (STEM) education
  • Prepare college students and young professionals to improve their skills or pursue a career in Environment, Health and Safety
  • Provide education and training opportunities to gain employment in engineering and manufacturing
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Six decades ago, Alcoa’s leaders established and endowed Alcoa Foundation to extend our company’s values to the communities where we operate around the world. Long before “sustainability” or “corporate social responsibility” became business terms, Alcoans understood the importance for Alcoa to earn a social license to operate. Without the trust, dialogue and collaboration of successful public-private partnerships, Alcoa would not be the thriving global company we are today.

Today we are engaged with our communities and contributing to society like never before. Alcoa Foundation has created robust partnerships that improve the environment and educate and prepare individuals for careers in science, technology, engineering, math (STEM) and manufacturing. Going far beyond dollars, we strengthen nonprofits and communities by contributing our time, expertise and products. In 2012, I am proud that Alcoa:

  • contributed $21.5 million to more than 3,000 nonprofits around the world;
  • engaged an astounding 60 percent of our employees in our worldwide Month of Service;
  • supported 12,000 Alcoans in group volunteering events that they organized for smaller, community-based organizations;
  • directed over $9 million towards environmental programs that recycled millions of pounds of aluminum, greened communities with a million trees, and taught individuals to reduce their environmental footprint by using less water and energy; and
  • dedicated $4.5 million towards STEM and Workforce Development initiatives that reached 200,000 students and teachers.

Even with all of this progress, we know that that there is still much to be done. Alcoa Foundation, together with our employees and nonprofit partners, is ready to take on the next environmental and educational challenges faced by our communities. We remain committed to plant 10 million trees, to increase recycling rates and to help prepare the young men and women who will be next generation of leaders and manufacturers. Alcoa has thrived for 125 years while fulfilling our commitments to society; we intend to build on that success by helping to shape the future of our communities. It’s part of the Alcoa DNA and it’s the driving force of our company’s vision – Alcoa: Advancing Each Generation.
Klaus Kleinfeld
Klaus Kleinfeld, Chairman of the Board and CEO, Alcoa

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If someone asked me to express Alcoa’s vision – advancing each generation – with a picture, I think this photo would be a strong contender. Taken by Claudia Mifano, it conveys how Alcoa Foundation engages our partners and employees to improve the environment and educate tomorrow’s leaders for independence and success. As Klaus Kleinfeld mentions in his letter, 2012 marked a very special occasion for Alcoa Foundation: we celebrated our 60th anniversary.

We have invested $570 million since the Foundation opened its doors and expanded how we think about philanthropy to evolve with the needs of the communities we serve. A few examples of how we’ve strengthened the way we operate:

  • We leverage all of our resources – financial contributions, products , assets, people and networks;
  • We’ve narrowed our focus to make a bigger impact in the areas where we believe we can make a difference with our resources – environment and education;
  • We think in terms of building relationships, not making transactions, to add sustainable value to our partners and stakeholders;
  • We clearly define success and measure the impacts of every investment we make.

In the following pages, we let the words and images of our people and partners bring to life how we are executing on these fundamentals. From planting breadfruit trees in Jamaica to recycling aluminum on U.S. university campuses to teaching students about science in Russia, we hope you will see a common thread that does not change with the times: our passion for giving back and making a difference. Wherever you look around the world, Alcoans are eager to apply to their communities the same enthusiasm they have for their work – whether it’s during Month of Service, Green Works environmental weeks, or Alcoa “dollars for doers” programs like ACTION, Bravo! and Alcoans in Motion.

Albert Einstein once said, “The best way to predict the future is to invent it.” Alcoa Foundation, along with Alcoa’s 60,000 employees and our many partners around the world will build upon our accomplishments of the last six decades to continue our pursuit of a healthier environment and stronger communities. We can picture it!


Paula Davis

Paula Davis, President, Alcoa Foundation

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Alcoa Foundation’s assets are considered to be a perpetual pool of capital. The objective of the investment strategy is to preserve the real (inflation-adjusted) value of the assets to maintain the real value of its program spending over the long term to support the goal of contributing 5 percent of the value of its assets each year. The Alcoa Foundation’s assets were $460 million at year-end 2012.

The portfolio's investment strategy has been revised over the last few years to reduce and diversify the investment risk taken to achieve our long-term objective via increasing both asset class and risk factor diversification. The strategy revisions are expected to increase the probability of achieving our long-term investment objectives while reducing the risk of experiencing large short term portfolio draw downs. Specifically, we meaningfully reduced the allocation to public equities and increased the allocation to macro and equity long/short hedge fund strategies, US inflation protected securities and long duration US Treasury securities.

The revised investment strategy helped us to generate a strong 2012 investment return of 9.7% which outperformed our internal performance benchmark by 0.8%. We generated strong returns across all asset classes. Over the past two years, the investment strategy changes have enhanced our investment return by 2.7% which preserved $14 million of the Foundation's total corpus.

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