Over the last several years, the philanthropy teams in major corporations have seen their jobs change dramatically.

Some of the changes were already underway when, in 2019, the Business Roundtable published a new statement of the purpose of a corporation. Signed by 181 CEOs, the statement added that companies should ‘support the communities in which they work.’ Events in 2020, including the murder of George Floyd and the global COVID-19 pandemic, reinforced an emerging consensus—particularly among consumers and younger employees—that corporations needed to actively address societal challenges beyond their role in creating jobs and contributing to economic growth.

Over the last year, my colleagues and I at the Milken Institute, a nonprofit think tank, explored how these new expectations are changing corporate philanthropy across the globe. Through over 35 interviews with heads of corporate foundations, CEOs, and social impact executives, we identified common challenges facing leaders in corporate philanthropy, as well as strategies corporate foundations are adopting to respond to heightened expectations. We recently released a report that captures the key insights from this project.

So what has changed? ‘We’ve never been busier,’ one corporate foundation president told us. She explained that corporate philanthropy used to have a predictable annual cycle, but now the pace has accelerated. Philanthropy teams within corporations are feeling pressure to respond to major news events, including political flashpoints, such as controversial Supreme Court decisions. More and more often, philanthropy teams are also acting as strategic advisors to the for-profit C-suite on long-term sustainability issues and more holistically blending purpose-driven work within the profit-generating aspects of the business.

‘Increasingly, philanthropy teams need to code-switch seamlessly between the skills required for nonprofit work and the for-profit business world. They also need to communicate to for-profit executives in a way that clearly outlines what is required for philanthropic change’

As our report outlines, corporate philanthropies deploy several emerging strategies for greater impact. For example, companies are increasingly pairing corporate investment and philanthropic grantmaking to expand opportunities in underserved markets, as Comcast has done through its Project Up initiative. Another example is changing the grantmaking model to more fully empower grantees and address the power imbalances between funders and beneficiaries. Lloyds Bank Foundation, for instance, focuses on organization capacity-building within grantees, including through skills-based volunteering, to strengthen the organizations directly serving communities.

What the most successful strategies have in common is that they leverage the connections the corporate foundation has with its company to contribute to a positive impact. Corporations have the capital, the talent, and the ability to operate at scale. Corporate philanthropy is more frequently integrating these business capabilities with their social impact work to create long-term value for communities and contribute to a more sustainable business environment.

But much of this is new, and there are serious challenges.

One is being spread too thin. Even as some corporate foundations have annual budgets ranging from $40 million to $300 million, the evolving demands on them can quickly exhaust their resources. For multinational corporations, whose customers and employees are located worldwide, the decisions about what projects to say ‘No’ to can be difficult. As one head of a corporate foundation told us, ‘We have to make a dollar more than a dollar.’

The approach of more closely aligning philanthropic and company strategies is also revealing the need for a new kind of talent at many corporate foundations. Increasingly, philanthropy teams need to code-switch seamlessly between the skills required for nonprofit work and the for-profit business world. They also need to communicate to for-profit executives in a way that clearly outlines what is required for philanthropic change (including how long it can take), how they track progress rigorously, and how the philanthropic efforts contribute to a better business environment.

And this leads to an additional challenge: demonstrating impact. A perennial problem for the nonprofit sector, demonstrating impact requires a clear theory of change and a methodology to delineate the additive effects of philanthropy’s interventions. All of this needs to be done in a way that is not too burdensome for grantees, who should spend most of their energy on serving communities, not filling out impact surveys. Corporate philanthropies are increasingly wrestling with this challenge as well, as showing real impact is becoming critical to their relationship with consumers and their employees.

Overall, corporate philanthropy is starting to move away from PR-driven activities disconnected from the core capacities of the company to a new model that leverages company assets, talent, and scale to deliver more robust philanthropic initiatives. Whether this approach succeeds will largely depend on how corporate philanthropy leaders address the challenges outlined above. If they can create targeted initiatives that meet stakeholder expectations, build talented teams, and demonstrate genuine impact, corporate philanthropy could dramatically alter the philanthropic landscape for the better.

John Schellhase is the director of environmental & social impact philanthropy at the Milken Institute.