Corporate Foundations in Spain contribute significantly to boosting the economy

The PwC Foundation and the CEOE Foundation have prepared, within the framework of their collaboration agreement, the report ‘Corporate Foundations in Spain. Strategic reflection on its relevance and impact assessment ’. The objective of the study is to highlight this important set of foundations, to know their specific attributes and to build tools to measure the impact of their contribution to society.

Spanish foundations are a fragmented sector with more than 14,000 entities of different types and with very different sizes and objectives. After exhaustive analysis work, the report identifies 730 Corporate Foundations in Spain -Those that have a relationship with a company with which they generally share a name, and from which they obtain their main financing. In recent months, we have witnessed an increase in its prominence, establishing itself as an essential instrument for companies to channel their aid aimed at fighting the effects of COVID-19.

Although it may seem like a small sector given the number of entities, it is estimated that in 2018 the set of Corporate Foundations had a total budget of at least 1,200 million euros, 15% of the budget of all foundations in Spain. Likewise, the sector employed almost 3,000 people that same year and its activity accounts for 0.1% of GDP.

However, the contribution generated by Corporate Foundations goes far beyond the money they contribute and the employment they generate directly. How to assess these impacts is crucial to determine the fulfillment of the proposed objectives and has become even more important after the outbreak of the COVID-19 crisis. For this reason, the report aims to raise awareness about the importance of evaluation and measurement as a key tool for managing and enhancing the work of foundations, through various methodologies.

The Sector of Corporate Foundations in Spain

Corporate Foundations in Spain have specific characteristics that define them as a collective and make them a group differentiated from the rest. The report notes a diverse typology according to its legal regime; your source of funding; as well as according to their degree of integration with the company.

The Corporate Foundations sector is a heterogeneous sector in size, associated sectors and sources of financing, the report highlights. In Spain, it was in the 90s when its generalized birth took place. Regarding their geographical scope, in a great majority of cases, Business Foundations share their headquarters with that of the founding company. Therefore, it is not surprising that the Community of Madrid and Catalonia are the regions with the highest number of Corporate Foundations. However, if we analyze the foundations associated with Savings Banks separately, a great dispersion is observed.

On the other hand, the report highlights that the financial sector is the main creator of foundations, with 36% of the total; while the Pharma and Health sector ranks as the second with the greatest weight. Likewise, the document indicates that the average individual budget of the group of foundations analyzed is around € 11.1 million. In addition, he maintains that, despite the fact that some Foundations have reinforced their budget, the COVID-19 crisis is expected to impact the available budgets, especially those financed by dividends.

Challenges of corporate foundations

The report highlights how the sector has evolved positively in many respects in recent years, although it still faces many challenges, such as the one represented by the emergence of COVID-19. In the first place, it is essential that Corporate Foundations have their mission well defined and that they have a strategic plan to guide long-term activities. Second, they must find the optimal model that adapts to the characteristics and needs of each foundation, with corporate governance being the key to ensuring credibility. Finally, it is essential that foundations improve their external and internal communication tools to evaluate their impact.

For Santiago Barrenechea, President of the PwC Foundation, "Common understanding criteria in measuring impacts should facilitate greater efficiency and, ultimately, an expansion and consolidation of this type of activities of social interest"

For its part, Fátima Báñez, president of the board of the CEOE Foundation, “The societies that enjoy higher levels of well-being are those that have more dynamic, modern business sectors and, above all, more responsible management. For all these issues, let's bet on corporate foundations ”.

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