Michele Sullivan, President of the Caterpillar Foundation, on Business and Philanthropy

by Rahim Kanani | rahimkanani | Rahim Kanani Media Group, Inc
Wednesday, 24 September 2014 22:39 GMT

The Caterpillar Foundation strategy is to turn the spiral of poverty in impoverished communities into a path to prosperity by investing in those proven to yield the best results - girls and women.

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In an interview with Michele Sullivan, President of the Caterpillar Foundation, we discussed the founding and evolution of Caterpillar’s philanthropic efforts, how they shifted from a donation model to a corporate social innovation model, why many of their investments are aimed at empowering and educating girls, the proper role of business in tackling tough societal challenges, and much more. 

Tell me a little bit about the founding of the Caterpillar Foundation. What sparked its creation, and what have been some of the organization's major milestones up until today? 

Started in 1952, the Caterpillar Foundation was a natural extension of our values and culture. Caterpillar employees have long been proactive members of communities where they live and work. Over the last 62 years, the Foundation has invested more than $600 million in organizations and programs. Today, it ranks in the top 15 global corporate foundations in terms of total investments according to the Foundation Center. 

Since its beginning, Foundation giving has evolved from a Peoria, Illinois, focus (home to Caterpillar's worldwide headquarters) to a worldwide focus, reflecting our global business. In fact, today more than half of the Foundations' investments are dedicated to organizations outside the U.S. Over time, the Foundation has also shifted from simply giving donations to a corporate social innovation model, with an acute focus on disrupting the spiral of poverty and placing people (particularly girls and women) on the path to prosperity.

A few highlights from our more six decades include:

  • The Caterpillar Foundation has been a partner with the United Way since 1950s. It is Caterpillar's only approved employee solicitation. There's a reason for that – the United Way is the most efficient and effective way to invest in communities across U.S.
  • For several decades, the Caterpillar Foundation has been investing in the Red Cross. The world needs builders and, unfortunately, during times of tragedy the world needs rebuilders. That's at core of what we do.
  • For more than 20 years, the Foundation has invested in Opportunity International, which provides micro loans to women entrepreneurs worldwide.
  • In 2005, the Foundation and The Nature Conservancy created the Great Rivers Partnership (GRP). GRP ensures the world’s great rivers—the Upper Mississippi River (US), the Paraguay/Parana River (Brasil) and the Upper Yangtze River (China)—are healthy and can have a direct impact on growing economies. For example, when a farmer understands how to farm sustainably without polluting the river, the fisherman who depends on that river for his livelihood has more fish to bring to market, resulting in a rising income and healthier economy.
  • In 2008, the Foundation switched from giving donations to an outcomes-based investment model.
  • 2013 marked the year the Foundation began an intense focus on investing in programs to address the root cause of poverty. For us, that meant often focusing on programs that benefit women and girls who don't have a level playing field compared to boys and men. Instead of going to school, they're carrying water all day. If we help educate a girl, we help give her and her village the chance to prosper - ultimately growing economies.
  • 2013 also marked our first investment in the ONE campaign, and therefore our first significant investment in advocacy and public policy. The investment was in the Year of Ag for Africa. ONE's goal was to have 600,000 African citizens connect with their leadership and ultimately achieve 2.2 million citizens telling their government why investing in agriculture works to significantly decrease poverty. Just look at the countries of Ethiopia, Ghana, and Burkina Faso - they've all increased investments in agriculture, and poverty levels have dropped by 50% in recent years.

This week, the Caterpillar Foundation and Caterpillar Inc. are making a $2.5 million investment in The Global Poverty Project. The investment will support growing the Global Citizen grassroots movement around the world to end extreme poverty by 2030. The Caterpillar Foundation investment will support advocacy and public policy work around the world to enable entrepreneurship, especially for women, by removing barriers caused by poor and inequitable access to sanitation – such as places to hand wash or use the toilet – and lack of access to basic education. Caterpillar is sponsoring the festival, while Cat® generator sets will provide power.

How did it come about to focus the foundation's attention on education, environment and emergency relief? 

The Foundation's primary goal is to help alleviate poverty at the root by focusing on environmental programs that grow economies, education programs that focus on literacy, numeracy, STEM, workforce readiness, leadership and mentoring, and ensuring people have their basic human needs met (water, food, shelter and disaster relief). Focusing on the root cause of poverty—and not the symptoms—is the most efficient and effective way to invest and address these areas. 

The Caterpillar Foundation also supports entrepreneurship. Our history is rooted in entrepreneurship, built by two industry pioneers—C.L. Best and Benjamin Holt—whose longstanding tradition of innovation and invention has endured for generations at Caterpillar. We consider our investments in global development "catalytic philanthropy," which means we understand holistically that fostering entrepreneurship means fostering opportunities across the entire life cycle of an individual. 

Honing in a little more on your strategy and programs, why focus specifically on empowering and educating girls? 

Did you know 70 percent of the 1 billion poorest people on our planet are female? Ensuring girls and women have a clear path to prosperity means we are ensuring the best opportunity to build sustainable outcomes. The girl is a key to the Global Development Agenda. The life of a girl represents basic human rights, basic human need and everything in between. She also represents everyone around her. The focus on the girl, her access to water and sanitation, her ability to attend school, and ultimately the ability to create a meaningful source of income is in no way a diminishment of the need for boys to have this same right, it is instead to focus on the one who for years has been invisible.

Female entrepreneurs re-invest 90 percent of their earnings back into their families and communities, so we know our investments are seeing a strong return. Since 2012, we have invested just under $80 million in girls and women through programs that address access to clean water, energy and micro finance, education and food and shelter support. That includes our first ever public-private partnership with the State Department and implementing partner StartUp Cup to support the development and empowerment of women entrepreneurs first in Africa and then globally. 

As the Sustainable Development Goals are being finalized, what do you see as the proper role of business in tackling societal ills worldwide? 

At the heart of anything you do, regardless of which sector you work in, collaboration is the key to success. At Caterpillar, that means the collaboration of our global team of employees and dealers that totals more than 250,000, in addition to our global supply network. The private sector has a responsibility to engage its resources, knowledge set and diversity in networks with initiatives in the public and nonprofit sectors. 

It's not up to one sector, one government or one funding source. The initial global agenda anchored by Millennium Development Goals was an important and essential framework for global development, albeit one that didn't include the corporate sector from the outset. We believe the only way to scale global social and economic issues is to create solutions that engage all three sectors - private, public and NGO sectors. The post-2015 agenda's success will hinge on this integration.

As President of the Foundation, what are some of the leadership lessons you've learned along the way when it comes to the intersection of business, philanthropy, and social progress?

For me, the key to leadership is sharing the vision and strategy with my team and our partners so we can execute together. That was important when we wanted to take the Foundation in the Corporate Social Innovation (CSI) direction—a big change from Corporate Social Responsibility. We are looking at the world in a different way. CSI means starting with the human issue first. Instead of making product, gaining profit and being obligated to give back, we start with the issues in the world, determine how we can use our products or invest in new  products to make the world progress, and we succeed as a company at the same time by putting the human need first. 

The other thing I’ve learned is to bring people along with me on the journey—whatever you are trying to accomplish, you need help. You need people to understand your vision and to help you get there. I’ve done just that with CSI at Caterpillar. 

Looking ahead 5 or 10 years, how do you see Caterpillar Foundation's efforts evolving, and what kinds of new or innovative partnerships or programs do you foresee taking shape in the future? 

I don't know that I could have predicted five or ten years ago the exciting journey the Caterpillar and the Foundation would be on today. The Foundation has always been dedicated to the advancement of people and economies worldwide, and the ways in which we invest have evolved through the decades.

What are our future partnerships? I don't know for sure but I know we have to constantly evolve and adapt to the world needs. What I do know is that we will continue on the CSI path. People, economies, business and philanthropy are all connected more than they ever have been. Caterpillar business leaders increasingly need Foundation investment information so they can be better advocates of the company rather than just the product they’re trying to sell. We are more than our world-class products. By educating our own leaders, we can better educate our customers, our potential partners and governments of countries where we operate.