September 15, 2020

Angels & Demons: ‘The demon is that it’s still acceptable to have profit without purpose’ - Leslie Johnston

The Laudes Foundation has huge ambitions – to transform the economic system to counteract climate change and inequality. And it plans to do this not by fighting big business, but by working hand in hand with it. In the second in a series exploring some of the advantages – as well as the risks and tensions – that come when philanthropists align their work with corporate interests, Laudes Foundation CEO Leslie Johnston tells us why a ‘venture philanthropy lens’ is key to her organisation, and why philanthropy's magic touch can drive change – if it can overcome its ego.


 

In January 2020, a new foundation was launched with a breathtakingly ambitious aim – to address the dual crises of climate breakdown and inequality that, the foundation says, endanger nature and jeopardise the safety and dignity of people in countless communities around the world.

Laudes Foundation developed out of the C&A Foundation, an influential mover and shaker in the fashion world which, since it began in 2013, aimed to transform the industry’s deep-seated unsustainable practices, including abusive labour conditions and huge negative environmental impact.

The C&A fashion chain was founded in 1841 by the Brenninkmeijer family, which, now in its seventh generation, runs several businesses encompassing retail, real estate and investment under the Switzerland-based holding company, Cofra.

Pioneers Post spoke to Laudes Foundation’s CEO (and previous executive director of the C&A Foundation), Leslie Johnston (pictured below), to explore the direction of the new foundation and its potential to achieve its goals.

Leslie Johnston Laudes Foundation web

Pioneers Post: Why was Laudes Foundation established, and what does it aim to achieve?

Leslie Johnston: It’s really hard to change an industry if you are not changing the underlying economic system. We accomplished a lot at the C&A Foundation, but we were looking at symptoms rather than the root causes. The fashion industry is unsustainable, but so is the system behind it – there is a race to the bottom. That was the impetus towards becoming Laudes Foundation.

With climate breakdown, we have ten years. At the same time, we have deepening inequality. These are big issues. And we want to look at these meta-issues with and through industry.

By 2030 we want to build an inclusive economy, where mindsets, rules and power have shifted to ensure that business and markets mitigate climate change and eliminate inequality.

PP: How will Laudes Foundation do this?

LJ: If you look at our history as the C&A Foundation and looking forward as Laudes Foundation, we are a grantmaker with a venture philanthropy lens. Sometimes, in addition to grants, we make investments or repayable grants.

The venture philanthropy method is to firstly choose a method that suits. So, for example, when we set up Fashion For Good [a platform to connect apparel industry members with sustainable innovations that can reimagine the fashion industry], it was a limited liability company and our money was a contribution to the shareholder capital. This meant it could become independent and we could eventually exit. Our grants can be used for influence and advocacy, for example, by giving a grant to an anti-slavery organisation.

Secondly, we include non-financial support. And, thirdly, we have a relentless focus on results that lead to impact.

Laudes Foundation: Fast facts

  • Founded: January 2020
  • Legal status: A Switzerland-based, independent charitable entity
  • Mission: “To support brave action to inspire and challenge industry to harness its power for good”
  • Grantees/investees: Organisations that will “work collaboratively on brave initiatives that can contribute to systemic industry change” in fashion and the built environment
  • Grantmaking/investment capacity: €50m-€55m a year in grants and occasionally repayable investments; this is expected to increase after the first few years
  • Funding source: Builds on the endowment of C&A Foundation that, in 2019, committed €47.5m to grantmaking; Laudes Foundation plans to grow this
  • Governance: The board is composed of three Brenninkmeijer family members; the foundation also has an investment committee and advisory council that include both family members and external experts

PP: What makes Laudes Foundation well placed to tackle the issues of climate breakdown and inequality?

LJ: The key is the lens that we choose to use, which is an industry lens. Not all foundations choose this lens. Despite the will of business to be sustainable – and there is a lot of goodwill out there – sometimes it’s hard. Philanthropy can de-risk things for business. So, for example, with innovation, it’s hard for companies to bring innovations to scale in a competitive space without a robust proof of concept.

Philanthropy can influence the environment for business. With Fashion for Good, I don’t think that any company would have set that up. Why would they invest in a platform for their competitors? We bring diverse stakeholders together in a way that none of them individually would have done.

That’s where the magic can happen. Philanthropy can take a risk. We play a different role to business, and we learn when we fail.

We bring diverse stakeholders together in a way that no business individually would have done

PP: How is Laudes Foundation working with industry to achieve its goals?

LJ: In the past, we have had many partnerships where we have brought businesses together. Our role has been a convenor, or a de-risker. Looking forward, we are moving into new areas, including the built environment [ie buildings, cities and neighbourhoods], so it’s going to be very important that we understand and bring together the key actors in that space.

Cand A Foundation child education project India

Above: School Monitoring Committee members in the village of Tigria in Kargone district, India, holding a meeting in the primary school, as part of a 2018 initiative by C&A Foundation and local partner Jan Sahas to fight forced and child labour through education

PP: What is the relationship between Laudes Foundation and the Brenninkmeijer family?

LJ: Laudes Foundation is a private foundation and it is part of the Brenninkmeijer family enterprise – a group of businesses and foundations that go back to 1841. There are family members in the foundation’s governance structures, but they are not involved in the day-to-day decisions. Our grantmaking strategy is in line with the overall mission of the family to be a force for good and the focus areas reflect the experiences of the family.

PP: How is Laudes Foundation responding to the coronavirus crisis?

LJ: Our top priority has been to keep our staff safe and comfortable. In the immediate aftermath of the Covid crisis we worked very hard to understand the needs of our partners and deliver support as quickly and effectively as possible.

We launched an emergency fund with streamlined requirements for both our partners and their beneficiaries. We took applications and got the money out in around three weeks, and 67% of them passed that funding through to their beneficiaries for protection equipment and food. Some of them had funding from other foundations pulled or reduced. We’re not pulling back on our budget.

Now, as many countries begin to re-open and the crisis enters a new phase, our focus is now pivoting to more medium-term actions that address some of the more structural issues associated with inequality and injustice. This includes providing core to support partners – old and new – to promote those policies and incentives that enable an inclusive recovery. Given the dual underlying crises of inequality and climate change, we are at an important crossroads as countries look to invest in “building back better”.

Lastly, we are developing a long-term approach that explores how Laudes Foundation can fund initiatives that accelerate the transition to a progressive new economy. Our long-term efforts include advocacy work and forging partnerships with influential platforms to – among other things – raise awareness and promote dialogue on new economic models, support efforts to enforce mandatory human rights due diligence, and ensure workers are at the centre of just transition policies.

PP: What potential do you think foundations like Laudes have in today’s society?

LJ: There is a movement among foundations to spend down. They are thinking that we are in a period of crisis, they have a duty to act and to spend their endowment now rather than do a small amount in perpetuity. This can be a useful and powerful tool.

But foundations need to work together. In philanthropy there is so much ego; foundations don’t play well together. The Covid crisis is pushing foundations to form coalitions and I think bodies like EVPA can play an important role in bringing us together – we are all trying to influence mindsets, rules and power structures.

In philanthropy there is so much ego; foundations don’t play well together. The Covid crisis is pushing them to form coalitions

PP: What ‘demon’ of industry would you like to see the back of?

LJ: Right now the demon is that it’s still acceptable to have profit without purpose. Profit alone shouldn’t be sufficient, but that is still incentivised. That is not going to get us where we need to go. Every dollar invested should think about its impact on people and nature.

PP: Who is your social change ‘angel’?

LJ: Mariana Mazzucato, the author of The Value of Everything. She has the foresight and ability to conceptualise the problem we are facing right now and think about the solutions that could be there. Paul Polman [former CEO of Unilever] has been very outspoken and inspirational. And Halla Tomasdottir, the CEO of The B Team [and former presidential candidate of Iceland] is to me a very inspirational figure. She gets it. She sees the power of CEOs coming together, but she also brings that gender lens that is often lacking.

To connect with more leading venture philanthropists and corporate social investors from around Europe, don’t miss the chance to attend the EVPA annual conference, this year focusing on ‘Building Alliances for Impact’, on 21-24 September. More info and tickets available here.

Article originally published by Pioneers Post (link)

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