The Strategic Role of a Corporate Foundation in the Social Sector

Editors Note: This post was co-authored by Carlos Hurtado, Manager of Sustainable Management of Water, and Priscilla Treviño, Head of Evaluation, Strategic Planning and Research, at FEMSA Foundation. FEMSA Foundation is the corporate foundation of FEMSA, a conglomerate that operates throughout Latin America, the Caribbean, and the Philippines and is the largest independent bottler of Coca Cola in the world, the owner of a fast-growing convenience store chain in Latin American, and a shareholder of Heineken.For over five years, FEMSA Foundation’s approach to corporate social investment has supported projects and research in the water and nutrition sector.

Investing in the social and environmental sector is not only a responsibility of the business sector; it is also strategic. This guiding principle provides the basis for FEMSA Foundation’s approach towards social investment.

Decision-making for increased effectiveness and efficiency

During a field visit as part of the design evaluation for Water Links in Honduras. In the photograph: Priscilla Treviño and Gabriela Torres (FEMSA Foundation), Iris Pineda (Auditor from KPMG Honduras) and Gisela Contreras (Water For People Honduras). Credit: Elias Assaf (Water For People Honduras)

During a field visit as part of the design evaluation for Water Links in Honduras. In the photograph: Priscilla Treviño and Gabriela Torres (FEMSA Foundation), Iris Pineda (Auditor from KPMG Honduras) and Gisela Contreras (Water For People Honduras). Credit: Elias Assaf (Water For People Honduras)

A corporate foundation has an interesting asset: familiarity with business-based practices and skills. Many of these skills and practices are useful for reducing uncertainty, increasing the likelihood of success, and identifying risks and opportunities for improvement for project design. Drawing on these strengths of the business sector, over the last year FEMSA Foundation has developed and piloted various tools to improve the decision-making processes related to its work in the social sector. One of the most useful has been an outcome and impact forecast methodology that the Foundation has developed for WASH projects.

In the WASH sector, as well as in many other social sectors, anticipating and quantifying the effects of a project is challenging. Diverse intervention strategies are deployed in different and evolving contexts which makes comparisons difficult. However, by making use of forecasting techniques similar to those employed by the business sector, FEMSA Foundation has found that the expected effects of WASH interventions over time can be described and quantified.

FEMSA's conceptual framework for WASH

The conceptual framework developed by FEMSA Foundation as the basis for health effect forecasting. Data drawn from empirical literature and fieldwork research is used for estimating effect sizes on various expected outcomes. Using forecasting techniques, depending on the characteristics of an intervention planned (in red and blue), the expected effect size will vary. Combined with economic valuation techniques, forecasts enable cost-benefit analysis.

As a result of this methodology, FEMSA Foundation has identified triggers of success and social value for WASH projects. One of those is the social insertion component of a project which, based on data, impacts the sustainability of an intervention in the field. Specifically, community participation in decision-making processes, economic contributions from water users to install and sustain water access and infrastructure, and the training of water committees are now part of FEMSA Foundation’s strategy. Over 75% of the Foundation’s total investment in 2013 — channeled towards various partners such as the Millennium Water Alliance (MWA), Habitat for Humanity and the Avina Foundation — is now backed up by a strong social insertion component. This has led to important efficiency gains. Under the enhanced social insertion strategy, average costs associated with community fieldwork have increased by 23%, but economically valuated benefits have increased by more than 60%.

Collaboration within the social sector

The gap between NGOs, with experience getting things done on the ground, and institutions with technical expertise useful for planning, implementing, and assessing an intervention can be wide. The Foundation is working towards narrowing this gap between the social sector and other actors interested in tackling social and environmental problems.

Over the past year, FEMSA Foundation has worked closely with social sector organizations, academic partners and business leaders to unify visions and to leverage strengths and expertise for the improved design and management of social projects. One of these projects is Water Links, FEMSA Foundation’s flagship program for WASH service delivery. Water Links is co-financed by MWA and Coca Cola Latin America and operates in México, Guatemala, Honduras, Colombia and Nicaragua, where it will benefit more than 110,000 people by 2015.

A hygiene promotion exercise in La Guajira, Colombia conducted together with beneficiaries meant to create awareness regarding waste disposal practices. Credit: Francesca Moschini (Aguayuda)

A hygiene promotion exercise in La Guajira, Colombia conducted together with beneficiaries meant to create awareness regarding waste disposal practices. Credit: Francesca Moschini (Aguayuda)

As a regional and inter-institutional program, Water Links is an outstanding opportunity for exploring various approaches towards WASH-related challenges. Initially, the evaluation strategy for Water Links was set around traditional reporting back to the donor. However, because FEMSA Foundation is committed to improving its decision-making processes, there was strong support for the translation of the initial evaluation model into a framework that was sufficiently sound to identify solutions for WASH-related challenges and yet appropriate to deploy in the field. FEMSA Foundation facilitated this change of vision by mapping information needs for comprehensive learning, providing guidelines for data analysis based in business-oriented practices, and offering technical expertise to enrich the evaluation model. Water Links also engaged with academia to address the benefits to the WASH sector and redesign instruments for data gathering. Finally, technical insight from MWA, the organization that works most closely on project implementation, ensured that the strategy proposed considered the challenges and realities faced in the field.

As a result of this collaboration, Water Links now has a sound monitoring, evaluation and learning model (MEL Framework). The Framework aims to capture relevant findings from the ground during the lifetime of the program through a continuous cycle of activities and instruments that will document the effectiveness of various WASH models of interventions, revealing good practices and pointing out implementation challenges.

The MEL Framework

Figure above exhibits the different stages that shape the continuous cycle of monitoring, evaluation and learning for Water Links meant to capture and translate data into a change of practice.

The MEL Framework, which is set to begin its activities on the ground in May, 2014, has turned Water Links into much more than the materials and activities paid for and implemented on field. It is now a program that is able to evolve to ensure sustainable benefits as well as an instrument to learn from and transform the way FEMSA Foundation and other interested actors work for the better.