Corporate Philanthropy in Indonesia: Potential Development and Challenges

Plaza Sinarmas Tower 2 lantai 39, Jl. MH Thamrin No. 51, Jakarta Pusat

Jakarta, 25^th of February 2016

Keynote speakers:

• Nor Hiqmah, PIRAC
• Restu Pratiwi, Yayasan Danamon Peduli
• Okty Damayanti, Yayasan Adaro Bangun Negeri
• Umar Fahmi, Pertamina Foundation

Moderator: Esther Sianipar, Microsoft Indonesia

On Thursday, February 25, Indonesia Philanthropy Association (PFI) held its fourth Philanthropy Learning Forum (PLF). The topic for this event was corporate philanthropy. PFI worked together with Eka Tjipta Foundation as the host to make this event possible. The event was opened by Timotheus Lesmana, Chair of PFI Executive Board and Hasan Karman, Executive Director of Eka Tjipta Foundation. The summary and closing statements were delivered by Ismid Hadad from Yayasan KEHATI, who was also one of PFI founders.

Based on the keynote speaker’s presentations about their corporate philanthropy activities and discussion with the participants, here are the key takeaways from PLF 4:

• Corporate philanthropic activities in Indonesia have been increasing. According to a research study undertaken by PIRAC and Dompet Dhuafa, in 2014, a total of 400 corporations have donated or given IDR 12 trillion. This increase shows that corporations in Indonesia believe that their activities have created positive impacts in the society. The most funded issues in corporate philanthropy are social services, education and research, environment, and health.
• In doing philanthropy activities, most companies establish their own foundations. This foundation is a separate legal entity and has its own governance board that consists of individuals from different backgrounds. The establishment of corporate foundations is undertaken to increase the effectiveness of CSR programs, to ease the surveillance and recording of programs, and to create a positive image of the company. The biggest funding source comes from the company itself.
• The awareness of having their own corporate foundation to do the corporate’s philanthropy work is high in Indonesia. But in reality, corporate foundations are only the CSR operator of the company, donating, but not addressing systemic problems. This shows that many companies are not able to differentiate between philanthropy activities and CSR programs. CSR funding often relates to product selling or customer satisfaction, meanwhile the funds for philanthropy work are purely charitable donations. Companies have to be able to balance philanthropy programs and marketing or promotions.
• The availability of high quality human resources is another challenge that often comes up in corporate foundations. The management team usually consists of the company’s own staff who are engaged elsewhere within the company for the majority of the time, limiting the performance of the foundation. Some corporate foundations also find it difficult to recruit professional talent because the best candidates are allocated to the company’s business operations.
• Corporate foundations have partnerships because they believe that their role is complementary to the government programs and CSR programs. The favourite partner of corporate foundation are universities, followed by non-governmental organizations and the government itself. This aligns with the fact that most foundations focus on education as their main program area.

Ismid Hadad closed PLF 4 by stating that corporate philanthropy nowadays is not limited to charity work or giving grants, but also community and economic empowerment. The monthly event was attended by 60 participants and was successfully held thanks to the contributions of many organizations. Stay tuned for the next Philanthropy Learning Forum with the topic: millennial philanthropy.