The Funding Arms Race: Looking Back, Looking Ahead
The Funding Arms Race
Looking Back, Looking Ahead
It is Future 500’s 30th year of impact and our CEO, Erik Wohlgemuth, had the privilege of reconnecting with our founder, Bill Shireman, to reflect on our legacy of impact, assess the relevance of Future 500’s mission today, and look forward to where we should focus.
Looking back
Future 500 was founded out of helping resolve a conflict between an NGO network campaigning against Mitsubishi Corporation, seeking to change the company’s deforestation practices in Southeast Asia. The outcome was a commitment by the company to avoid sourcing forest commodity products from old-growth and endangered forests. This led to several different marketplace changes, including increasing demand for 3rd-party certified forest commodities, as the NGO campaigners then turned to other companies, pressuring them to meet or exceed the standard set by Mitisubishi, encouraging, cultivating a virtuous race to the top among companies (See Stanford Case Study).
This marked the beginning of the corporate campaign movement, in which NGO advocates and their funders sought to harness grassroots power to channel the rising corporate influence as a potential force for good. At that time, the global economy was becoming increasingly integrated, and corporate value chains were expanding globally; corporate economic, political, and technological power began to surpass that of nation-states, and the socially responsible business movement typified by Ben & Jerry’s, Interface Carpets, the Body Shop and others was emerging.
Theory of Change
One of the Mitsubishi Executives, Tachi Kiuchi, the CEO of Mitsubishi Electric USA, and Bill recognized that while they had resolved one conflict, more would follow. They recognized that as corporate power grew globally, making it harder for governments to regulate their actions, civil society would fill the gap, guiding and challenging companies to address social and environmental externalities caused by their practices. So, they launched Future 500 to help proactively build bridges between companies and civil society, seeking to mitigate potential conflict on social and environmental issues by nurturing the constructive conditions that enable finding shared truths and common ground solutions.
This is something Bill refers to as “Pro-Activism,” specializing in stakeholder engagement that aligns civil society and corporate decision makers seeking to advance positive marketplace change. Together, they can achieve far more than they can in isolation. The effect of Future 500’s bridge-building work is that the Future 500 team serves as a depolarizer, recognizing that companies and civil society can only work at the speed of trust. We could play a unique role in engaging the most challenged companies and sectors by accelerating the trust-building process that is essential for advancing more enduring solutions.
Our Relevance Today?
Thirty years ago, Bill and Tachi had the foresight to embrace stakeholder engagement, pioneering methodologies that many dismissed as touchy-feely, believing that a corporate sustainability focus was not an aberration isolated to a select few upstart companies like Interface Carpet. Equally prescient, but more unfortunate, they correctly anticipated the rise of polarization and conflict. Corporate power grew, as did their need to compete for influence with policymakers. Commensurately in response, the breadth and sophistication of philanthropic networks funding corporate campaign movements grew, aligning diverse grassroots community, shareholder, and associated political power to erect guardrails that guide corporate practices to address social and environmental problems.
Today, Future 500’s mission and theory of change are no longer woo-woo, but essential. Stakeholder engagement is now mainstream, integrated into numerous corporate accountability standards and frameworks, and terms like “stakeholder capitalism” are part of the mainstream lexicon. Likewise, corporate responsibility is integral to shareholder value rather than an aberration. The two are complementary, and in completing a recent historical assessment of our impact, five key themes emerged.
Culture Change: Educating corporate leaders to enable culture and process change within their companies, where they regularly seek out and integrate stakeholder feedback into their business planning.
Sourcing Policies: Implementing supply chain policies that drive positive economic, social, and environmental progress.
Policy Alignment: Companies and issue advocates aligning around local, state, or federal policies that drive positive returns for business and society.
Avoided Campaigns: Agreements that help avert corporate or shareholder campaigns so those resources can be deployed elsewhere.
Cultivating constructive, collaborative spaces that grow increasingly rare in a polarized world.
Looking ahead
As corporate and civil society power has grown, so has the power of philanthropy. Until recently, funding committed to influencing corporate practices was predominantly, but not exclusively, the domain of more progressive philanthropic networks. This manifested in a diversified strategy, pressuring companies to address financially material social and environmental issues as companies proved more nimble and innovative than governments in advancing positive marketplace change. In effect, companies were “first movers” in creatively addressing issues; governments then followed with investment and regulation to set standards for companies.
Beginning in 2010, following the U.S. Supreme Court ruling Citizens United, unlimited, often undisclosed, outside spending on political causes was legalized. Funding for conservative causes was common before the ruling, but after, we saw a dramatic rise in funding overall, and the emergence of conservative causes using tactics—brand boycotts, shareholder resolutions, and litigation— that progressive funders had deployed successfully to influence companies.
Companies now find themselves increasingly facing diametrically opposing stakeholder demands on social issues like DEI, and environmental issues like Energy Procurement, and Advance Recycling. Just as campaigns by groups like, Engine No 1 for transitioning from fossil fuel energy, and Human Rights Campaign encouraging increased corporate focus on DEI, we saw rising conservative campaigns from groups like Consumers Research against DEI, and Americans for Prosperity opposing renewable energy development. Similarly, progressive state attorneys general filed several climate accountability lawsuits against fossil fuel companies, while conservative state attorneys general countered, filing lawsuits against those states seeking to overturn them.
As political scrutiny and associated legal risks increase for companies, they are also rising for a host of stakeholders, including civil society, academia, and the media. Interestingly, for the Future 500 team, this dynamic is creating new opportunities for companies and their stakeholders to find common cause. We proactively help seed these opportunities in our ongoing engagements with companies and civil society, such as in the diverse speakers we curate for our multistakeholder meetings, and via direct engagements we facilitate for our partners. Our efforts help counter polarization by getting companies and their stakeholders out of their echo chambers and engaging each other directly. By doing so, we foster the human connection essential for overcoming skepticism and moving toward solutions.
30 years ago, Future 500’s stakeholder engagement work was considered too touchy-feely. Today, it is essential, and it is with great humility that the Future 500 team seeks to honor and build upon Bill and Tachi’s legacy in pursuit of a vision where depolarizers are rarely, if ever, needed. Tachi now rests in peace, but if he’s watching, he will rest easier if we succeed in realizing this vision someday. Onward.
“The purpose of Propaganda is to make one set of people forget that other sets of people are humans.” - Aldous Huxley
Future 500 is a non-profit consultancy that builds trust between companies, advocates, investors, and philanthropists to advance business as a force for good. We specialize in stakeholder engagement, sustainability strategy, and responsible communication. From stakeholder mapping to materiality assessments, partnership development to activist engagement, target setting to CSR reporting strategy, we empower our partners with the skills and relationships needed to systemically tackle today's most pressing environmental, social, and governance (ESG) challenges.
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