The Corporate Citizen

• Interview with Secretary of Education Rod Paige
• Partnership Conference Analyzes Business and Education Partnerships

• Senate Finance Committee Studying IRS Form 990 Reform
• CCC to Host Forum on Capitol Hill September 29

• Call for Nominations for Corporate Citizenship Awards
• CCC and BC-CCC Conduct a Workshop in New Orleans
• Profile: The American Chamber of Commerce of the Philippines Foundation

• Businesses rally voters to the polls
• AmChams and Companies Respond to Flood Disaster in Haiti and the Dominican Republic

FEATURE

Interview with Secretary of Education Rod Paige

The seventh secretary of the U.S. Education Department, the honorable Rod Paige, graciously agreed to talk with the CCC about some of the issues affecting business and education partnerships.  In this wide-ranging and candid interview, Secretary Paige discusses No Child Left Behind, the role of business in education, and his thoughts on the future of education in the U.S.

CCC: At the Educational Partnership Conference, held on May 21, 2004, you challenged the business community to think of education like a $500 billion industry.  What did you mean by that? 

Paige: Education is a vast, expensive, and vital enterprise.  Because most of us only encounter our local or state efforts, it is easy to misunderstand its size.  It is as large, or larger, than any other industry in our country – telecommunications, defense, agriculture, transportation, or health care.  So let's look at education as an industry and ask some basic questions.  Is it accountable to its shareholders?  Is it transparent?  Is it efficient?  Do we have quality control?  How would we assess its outcome or product?  Do we have the data to answer such questions?

An honest assessment reveals that the old ways of doing things in education have not worked.  Often we don't know if children are learning.  We have varying standards for teacher quality, or sometimes virtually no standards.  We invest more in K-12 education than any country except Switzerland.  But our students rank as just average among industrial countries.  Millions of our students are unprepared for a global marketplace.  And those same students are often low income or disadvantaged, in other words those least able to overcome such educational deficiencies.  Parents have little choice, often because education is a monopoly. 

We have to transform education, making it more successful, inclusive, and equitable.  We must tear down the bureaucratic walls that secure unchallenged monopoly.   Monopolies aren't good for consumers in general, and they are not good for the consumers of education – parents and children.  We must unleash the market power, innovation, and genius of the free market system.

Many parents are not waiting for the monopoly to break.  They demand choice through multiple delivery systems like opportunity scholarships in the state of Florida and in cities like Milwaukee and now Washington, D.C., home schooling, cyber schools, charter schools, or private schools. Unfortunately, many of these options are not available to low-income families.  We must give low-income parents access to the same choices that are available to their wealthier peers.  The poor are the real victims of the educational monopoly.

In addition, we must create schools that are accountable for their results.  Educating our children is one of our nation's largest and most expensive undertakings.  Yet, the majority of children cannot read or understand mathematics on grade level.  Is it too much to ask that a third-grader read on the third-grade level? I think not.

As Jim Collins suggested in his book, "Good to Great," we must face the "brutal facts" about the quality of our schools.  Then, we must use that information to make needed changes.

CCC: What are the greatest challenges facing the U.S. education system today and how can business help address them? 

Paige: Perhaps the greatest challenge is to overcome the belief that not all children can learn and achieve.  We cannot fall into the trap of believing that some children just aren't cut out for rigorous academic work.  We also have to make education inclusive.  Millions of our children are ignored, under-educated.  Then they are passed on and passed out.  Social promotion leaves them in a kind of intellectual and economic darkness, less able to find employment, economic security, or future opportunities.

We have to get serious about reforming the system.  Now school is just one part of the equation: I often hear the nay-sayers talk about how schools can't fix all of society's problems.  That's true, they can't.  But once those children walk through the school hallways, we have a responsibility to do our best for them.  If we give students a good education, then they have better abilities to tackle other problems in life.

CCC: Given that almost 70% of schools are engaged in some kind of partnerships with businesses, this must be a model that is working.  Can you share with us some partnership models that stand out as unique, for either the results achieved or the nature of the partnership? 

Paige: Successful partnerships are an important part of preparing students who are able to enter college or the workforce with the skills they need for success.  Some programs that have been successful bring corporate leaders go into classrooms to talk to middle school students about the skills or knowledge they'll need to be successful when they graduate.  Students are then encouraged to sign up for rigorous coursework in high school.  They have a more meaningful understanding of the world around them and how they'll need to be prepared to compete.

CCC: What are the areas where you would like to see more business and education partnerships?

Paige: We must become a nation of readers.  Reading is the one subject upon which all others depend.  So I would strongly urge businesses and schools to target reading as a top priority.  Partnerships can establish reading programs.  Businesses can purchase books and other materials.  Businesses can also demonstrate the power of reading on the job and in personal/professional growth.
 
CCC: If you were to give advice to a business leader considering getting involved in supporting education, what would you say? 

Paige: Invest your time, talents, and resources like you would anywhere else: be concerned with the return on that investment.  Demand transparency in public expenditures for education.  Demand excellence as an outcome.  Prize quality in teaching and in performance.  Give of yourself.  Be a mentor to students and a friend to education.

CCC:  How is the education system preparing students today to meet the needs of businesses of the future?  How can businesses best support the development of a qualified and competitive workforce? 

Paige: Students need a solid foundation in reading, mathematics, writing, critical thinking, communication, history, and computer skills.  When they receive this from our educational system, they have the skills necessary to learn and grow.  This is what educational programs strive to provide worldwide.  Success in doing this job is a predictor of success in acquiring others skills, meaningful employment, and career choices.

The greatest job growth in the past three years has been in professional occupations.  Professional occupations tend to pay more and they require more education. Net employment growth for college degree holders totaled over 15 million over the last decade.   Employment growth for individuals with no more than a high school diploma was almost zero.  The current college graduation rate will produce over 23 million new graduates over the next decade -- that's over 7 million short of the projected need. According to The Business Roundtable, about 60% of employers say high school graduates lack necessary skills.

Our education system has forced employers to become the educators of last resort, which isn't fair to them nor is it good for the macroeconomy.  Remediation costs the economy.  The best way to solve that problem is to make our K-12 system do its job.  Other countries will catch up and surpass us if we don't.  According to the latest OECD report, they already are.  The U.S. needs to wake up.   

CCC: What is the first step for any business interested in supporting educational achievement?

Paige: Get involved!  Contact local schools and school districts.  Set up programs for employees to mentor students.  Support schools financially.

Many corporations realize that the best investment in business is an investment in education.  A recent study by the CCC and Boston College found that education was the number one social issue to which businesses felt they were in the best position to contribute.

CCC: What resources does the Department of Education offer to businesses interested in getting involved in supporting education?

Paige: The President's Fiscal Year 2005 budget contains programs to develop a closer partnership between business and education.  These programs can be used to generate much more business involvement in schools.  One program is the New Teacher Project, which asks top professionals in business or other areas to teach.  More than 6,500 enthusiastic new teachers have been prepared so far, launching 39 programs in 19 states.  And there is the Transition to Teaching program, which encourages mid-career professionals, paraprofessionals, and recent college graduates to become teachers.  Under No Child Left Behind and state-certification programs, qualified individuals with experience in their field are eligible for teacher certification within a reduced period of time.  There is also a request for $40 million for an "Adjunct Teachers Corps Initiative."  It will support between 60 and 100 awards to help well-qualified professionals in business, technology or other industries become teachers in secondary schools on an adjunct basis.

CCC: What's next after No Child Left Behind?

Paige: In a way, No Child Left Behind is the future.  It reforms the educational system, making it more effective.  We may look for more ways to improve education.  But No Child Left Behind is the law that will improve all other efforts to educate our children.  In that sense, it is foundational and allows for all other efforts to work better in the future.

CCC: Ten years from now, what do you hope our education system looks like? What do you hope your legacy will be?

Paige: No Child Left Behind is a good, visionary, and workable step into the future.  If we stay true to ourselves and to our children, within a generation we will see the benefits.  Our country will be more inclusive.  Education levels will soar while poverty will decline.  Our children will be employed and globally competitive.  Greater educational achievement is a direct answer to broken homes, crime, poor health, and unemployment.   I believe that as schools become more fair, racism will diminish and multicultural respect will become more prevalent.  If we can accomplish all of this, that is legacy enough to mark our efforts.\

CCC Conference Analyzes Business and Education Partnerships

On May 20-21, 200 business, government, and education leaders gathered together in the U.S. Chamber of Commerce building to discuss the current state of business and education partnerships.  U.S. Chamber President Tom Donohue, Education Secretary Rod Paige (by video), and Deputy Secretary of Education, Eugene Hickok opened the conference, which also featured commentaries by Senator Lamar Alexander, Representative John Boehner, former Secretary of Education Bill Bennett, Melaleuca CEO Frank VanderSloot, and GlaxoSmithKline Vice Chair Bob Ingram.

Speakers said that policies like No Child Left Behind, partnerships like the North Carolina business and education partnerships convened by Governor James Hunt, and individual initiatives sponsored by organizations and companies like the KIPP Academy, Junior Achievement, Communities in Schools, Toyota, Westinghouse, State Farm, and Bayer are having an impact, but that the current system still needs to be significantly improved.

Troubling factors included:

• The U.S. spends the second most on education in the world on a per capita basis ($6,500 per student) and yet ranks 18th in math and science.
• It is estimated that only two-thirds of current ninth graders will graduate from high school. 
• Fifty-one percent of African-American students graduate from high school but only 20% are prepared for college. 
• Only 16% of Hispanic high school graduates are adequately prepared for college. 
• According to U.S. manufacturers, 40% of all 17-year-olds do not have the math skills and 60% lack the reading skills to hold down a production job at a manufacturing company.  
• By 2010, as many as 10 million jobs generated by the American economy will go unfilled by U.S. workers because the U.S. education system is not teaching students the necessary skills to take advantage of job opportunities created by American business.

Business leaders expressed frustration with the current system and the lack of progress, and from the evidence it seems clear that at least 17 other countries are developing more effective education systems than the United States. 

In terms of next steps, the CCC will support a working group to help corporate education leaders communicate, coordinate, and collaborate more effectively.  Issues currently on the agenda include:

• An initiative to publish business and educational partnership opportunities in a single place.  This would take the form of an easily accessible Internet portal that can be accessed by business and education leaders. 
• Identifying ways to work with the people within the education systems that are willing and interested in changing.
• Identifying ways to empower teachers and make them more effective.
• Identifying ways to motivate students, parents, and employers to demand more and better education services. 

The CCC will release a full conference report detailing additional findings and recommendations in the fall.

POLICY

Senate Finance Committee Studying IRS Form 990 Reform

On June 22, the Senate Finance Committee convened a hearing to discuss the improvement of IRS Form 990, the primary reporting mechanism for tax-exempt organizations, as part of an effort to reform the tax-exempt structure.  Along with the hearing, the committee released a staff white paper with recommended courses of action for better oversight.

The white paper places the federal government squarely in charge of nonprofits, minimizing the role of the states, although cooperation between states and the IRS is stressed in enforcing the law.  Additionally, many of the rules concerning private foundation governance will now apply to public charities and trusts.  Uniform standards for completing the 990 form are requested so that charities can be compared with similar organizations; currently, there is no such common standard, making it much harder to compare different nonprofits with parallel missions.  Finally, changes to increase board transparency and accountability are suggested, many of which are modeled on the recent Sarbanes-Oxley Act.

Business can expect several modifications with regards to nonprofits if the proposed white paper changes are adopted.  Greater transparency will certainly be one of these changes, as nonprofits boards will have to disclose more information about their activities and expenses with strict penalties for noncompliance.  Most importantly, the sets of benchmarks developed for filing the 990 form should bring greater uniformity to the process, making it easier for companies to assess the relative efficiency of their social investments.  While the legislative future of these alterations is uncertain, if made into law they would have a significant effect on nonprofit accountability and transparency. 

CCC Hosts Forum on Capitol Hill September 29

On September 29, U.S. Secretary of Commerce Don Evans will join the President's Export Council (PEC) to discuss the release of the PEC's Report on Corporate Stewardship at a forum hosted by the CCC in the Rayburn House Office Building on Capitol Hill. 

On the same day, the CCC will also host a policy forum in the same location for companies to hear members of Congress and key staff members discuss their views on business contributions in the United States and in other countries. 

For more information on the Policy Forum, please contact the CCC at Insert ccc@uschamber.com email link.

RECOGNITION, RESEARCH, AND BEST PRACTICES

Call for Nominations for Corporate Citizenship Awards

The U.S. Chamber of Commerce Center for Corporate Citizenship is calling for nominations for the 2004 Corporate Citizenship Awards.  These awards recognize businesses and chambers of commerce that have demonstrated ethical leadership and corporate stewardship, made a difference in their communities, and contributed to the advancement of important economic and social goals.  On December 2, 2004, Secretary of Commerce Don Evans and President and CEO of the U.S. Chamber Tom Donohue will present the awards at the Annual Corporate Citizenship Awards Dinner in Washington, D.C.  The seven awards to be presented are:

• The Citizenship in Action Award
• The U.S. Chamber Community Service Award
• The International American Chamber Community Service Award
• The Corporate Stewardship Small Business Award
• The Corporate Stewardship Mid-Size Business Award
• The Corporate Stewardship Large Business Award
• The Kenan Award for Business Leadership (see http://www.kenan.org/ for information)

Award candidates must be an accredited chamber of commerce or a registered U.S. company and/or a member of the U.S. Chamber of Commerce via a local, metro, state, or international member chamber of commerce.  Nomination submissions must be postmarked by October 1, 2004.

To view the nomination criteria and selection process, please visit the CCC home page or call 202-463-3133.

CCC and the Center for Corporate Citizenship at Boston College Conduct State of Corporate Citizenship Workshop in New Orleans

Stephen Jordan, executive director of the CCC, and Steve Rochlin, research director of the Center for Corporate Citizenship at Boston College, conducted a workshop with members of the New Orleans Chamber of Commerce on June 24, thanks to the generous support of the Hitachi Foundation.  The collaborators presented the findings of the State of Corporate Citizenship Report, and engaged in an interactive discussion with U.S. Chamber members about corporate responsibility in the New Orleans region. 

The number one issue in New Orleans is jobs creation; indeed the old New Orleans Chamber underwent a strategic review and turned itself into Greater New Orleans Inc., an economic development organization whose mission is to generate 30,000 new jobs and $1 billion in new payroll over the next five years.  The new New Orleans Chamber held the corporate citizenship workshop before even moving into its new offices because members felt that corporate social responsibility issues were playing a key role in shaping the business dynamic in the city.  Workshop participants talked about ways to make corporate philanthropy more strategic, how to work with local nonprofit organizations, and how to provide services and meet needs that government agencies were not filling.   Participants also welcomed the opportunity to share their stories with each other, and to get ideas for their own programs.  If you are interested in hosting a State of Corporate Citizenship Workshop in your community, please contact Kathryn Williams for more information.

Profile: The American Chamber of Commerce of the Philippines Foundation

The AmCham Foundation serves as the socio-civic arm of the American Chamber of Commerce of the Philippines, Inc. (ACCP).  Its objective is to inspire, promote, and facilitate good corporate citizenship among its members.

The Foundation began in 1985 as a committee of the ACCP, formed to address two areas of need – youth development and disaster response.  In 1992 it was incorporated as an independent organization.

At present, it supports more than 300 former street children and urban poor youth.  It provides educational assistance and conduct developmental activities.  It also inaugurated its Leonard Benjamin Development Center last January 2004 and acts as a one-stop resource center, providing comprehensive services to AmCham scholars and their families.  The program provides medical and dental and basic education assistance – including computer literacy and skills training, and reproductive health awareness instruction.  Through this program children will have the opportunity to develop skills which will lead them towards a productive life with dignity and a sense of their true worth.  The members of the ACCP are supporting these programs, and because the Foundation is a U.S.-registered 501(c)(3) organization, U.S.-based companies and individuals have also contributed grants to support the work of the foundation.

Also in 2004, the AmCham Foundation strengthened its Corporate Citizenship Program, which aims to inspire and promote U.S. business in the Philippines to demonstrate Corporate Social Responsibilities (CSR) in communities.  Aside from the promotion of CSR, the program also provides technical assistance for development of company-specific CSR programs.  AmCham Philippines supported the work of the foundation by organizing a forum on CSR in April 2004 titled: Corporate Leadership: A Call for Business Ethics and Social Responsibility.  It also marked the launching of Beyond Profit: Profiles of Success in Corporate Citizenship in the American Chamber of Commerce of the Philippines, a compilation of the best CSR practices among 28 selected AmCham member companies.  For more information, contact Hilda T. Cleofe, Executive Director, 4554 Casino St., Palanan, Makati City, Philippines, T: 632-834-0184, E: Hilda@amchamphilippines.com

PARTNERSHIPS

Businesses rally voters to the polls

As the 2004 election season heats up, businesses are committing to a variety of get-out-the-vote efforts.  From media advertisements to payroll stuffers to issue Web sites, corporate America is employing a variety of media to motivate its workforce to participate in the political process.

Mobilized by trade groups, such as the U.S. Chamber of Commerce, businesses have been conducting internal vote-related campaigns. The U.S. Chamber's voteforbusiness.com provides a free service, requiring only a basic registration, with information about candidate stances and absentee ballot materials. Companies, including ExxonMobil, DaimlerChrysler, and Caterpillar, are all contacting current employees and retirees with a get-out-the-vote message that Bill Miller of the U.S. Chamber believes will have an impact that will "certainly be in the millions."

One of the more visible corporate efforts to get out the vote is Rock the Vote, primarily sponsored by MTV and its parent Viacom, along with significant donations from other corporations. It works to register young people to vote through guerilla marketing efforts and public service announcements.  Another voter-turnout effort for young people is the WWE's Smackdown Your Vote!, where WWE superstars make appearances at events promoting voter registration. Rap mogul Russell Simmons, along with PlayStation 2, have created the Hip-Hop Action Summit, an effort to bring the hip-hop generation out to vote. All of these efforts are non-partisan.

For more information on the vote for business coalition, contact Chad Mitchell at link to cmitchell@uschamber.com.

Partnerships in Action: Donations from OAS, PADF, Citigroup, ChevronTexaco, ExxonMobil, Cargill, and American Chambers of Commerce Reach $400,000

On June 4th the Association of American Chambers of Commerce in Latin America announced that the Organization of American States (OAS) and the Pan American Development Foundation (PADF) joined forces with the American Chambers of Commerce in Haiti and the Dominican Republic to mobilize $396,000 in emergency relief funds for disaster areas in those two countries, where heavy rains and flooding caused more than 1,000 deaths and destroyed several communities along the two countries' border, leaving nearly 10,000 individuals homeless.

Citibank/Citigroup, ChevronTexaco, and ExxonMobil together contributed $96,000, and Cargill donated $10,000 in food supplies.  Most remarkably, the American Chamber of Commerce and Industry in Haiti organized a telethon that raised $230,000.  The total amount of funds raised for relief operations has reached nearly $400,000 and is still climbing.

 "The partnership between Association of American Chambers of Commerce in Latin America (AACCLA) www.aaccla.org/ and PADF has made our efforts much easier from an administrative point of view.  It provides a rapid, efficient, accountable and credible means for our members to translate their desire to help into concrete action.  PADF's leaders and staff are true professionals, and have been a pleasure to work with," said William Malamud, Executive Vice President of the American Chamber of Commerce of the Dominican Republic.

"PADF's efforts are providing much needed assistance and bring relief to the hundreds of flood victims," added Nadine Gaston, Executive Director of the American Chamber of Commerce and Industry in Haiti.

EDITORIAL

Connecting the Dots
By Stephen Jordan 

The CCC's May 20-21 Partnership Conference raised a lot of questions, perhaps none more troubling than figuring out why the U.S. spends the second most on education in the world, and yet ranks 18th in math and science.  Clearly something is wrong with the current system. 

Businesses are deeply concerned.  Business partnerships exist in 70% of the nation's school districts.  Over $2.5 billion in resources are provided through these partnerships to over 35 million students.  Businesses rank education as the number one social issue that they can contribute to, and the third most important affecting long-term business competitiveness after health care and terrorism.  As a result, business and education partnerships have exploded over the last thirty years.

As U.S. Chamber President and CEO, Tom Donohue and David Chernow, the president of Junior Achievement, and many others have pointed out, there are organizations, tools, technologies, curricula, and other resources for every education issue under the sun.    But success varies greatly from state to state, region to region, and even school to school within individual districts.

Funding and resources don't seem to be connecting as effectively as possible to the people that need them.   This is due to policy choices, information access, strategic decisions, and other factors, so examples abound of discontinuities, inefficiencies and strange resource allocations.

In the Washington area, around $11,000 is spent per capita on students, and yet student scores dramatically lag behind their peers in Maryland and Virginia where education spending is far less.  With case studies like this, Is it any wonder that companies are pushing back on calls for more resources, and focusing more on making sure that the right resources get to the schools and students and are used productively?

Conversely, sometimes students, teachers, and principals don't know what resources are available, so they don't know what to ask for.  Sometimes they also don't know how a particular resource will benefit them directly.  So another question businesses are asking is how can useful information be distributed and applied at the grass roots level so that students can get the help they need?

Likewise, some business leaders are expressing frustration about what educators are asking them to do.  They may be great at selling hardware or cars, or coffee, or whatever it is that their business is about, but they don't have time to immerse themselves in educational issues.   Sure, they recognize that education is important for their community and the future of their business.  Although, they don't necessarily know all of the right questions to ask or the appropriate ways to respond; and sometimes they need help understanding how a particular issue affects them directly.  The question is whether educators can effectively engage business leaders in ways that make sense for them and their business?

Sometimes, specific issues can obscure the big picture.  No Child Left Behind was a huge positive contribution because it marked the government's commitment to higher standards for every child, but it did not represent a silver bullet to solve every education ill.  Clearly, student achievement, teacher excellence, college preparation, and workforce development all fit together, but complex, multi-dimensional issues can be difficult to address systematically and holistically.  How can the debate be changed to encompass the complexity of the issues involved?

The U.S. became a "nation at risk," not because of any single decision or act, but because of a series of complex decisions, actions, and policies.  The business community has been deeply committed to working on education issues for a long time, but it is clear that if it is to help the nation respond to the problems facing the U.S. education system, policymakers and education experts need to do a better job of organizing the issue in terms of goals, strategies, policies, operations, and resources.  Even though education is the number one issue that companies support philanthropically, this is an issue that is going to require not just business, but leaders across the education spectrum, doing a better job connecting with each other.  

There are no easy answers, to these questions, but at least there is broad-based recognition in the business community that the U.S. education system needs to improve and many companies want to step forward to make a difference.  That's a first step that should not be underestimated.   The next step is figuring out how to connect the dots.

BOOK REVIEW

The Naked Corporation, How the Age of Transparency Will Revolutionize Business, by Don Tapscott and Jerry Ticoll
Review by Stephen Jordan

If you are interested in the connection between ethics and transparency, and economic productivity and business competitiveness, this is the book for you.  The authors have done a tremendous amount of theoretical and practical research, and have combined theory with concrete examples to illustrate the relationship between bottom-line profits and company values.

This book would definitely make my top 10 list of recommendations for ethics, contributions, and community relations managers interested in showing how their work supports and contributes to the core functions of their business.  Some of the concepts that Tapscott and Ticoll help to clarify include:

• How a company builds social capital internally
• The importance of managing a corporate stakeholder network
• The implications of an increasingly networked society
• The importance of transparency
• When and when not to protect information

If you are struggling with any of these issues or would like a clear exposition and analysis of what is at stake, I would strongly encourage you to get this book.  The biggest downside of the book is that the authors have a tendency to focus on the positive aspects of their argument, and don't really dwell on the negative possibilities.  For example, just a handful of lawbreakers can destroy social capital and undermine trust.  As we have seen recently, the ethical misconduct of just a few companies (which, at the height of the business scandals, the business magazines were only tracking 22 cases out of 17,000 publicly traded companies) can cause significant damage to the rest of the market.  Not everyone does the right thing at the right time, and coping with the downsides of the new information paradigm might make for an excellent sequel. 

Every officer who deals with corporate citizenship at a strategic level, should have this book on their book shelf.

DID YOU KNOW?

According to the State of Corporate Citizenship survey, 59% of businesses believe that they should play an active role in addressing education.  Businesses also rank education as the top priority when it comes to investing in the community.  Source: The State of Corporate Citizenship in the U.S.: A View From Inside 2003-2004.

CCC Newsletter

Editorial:
Stephen Jordan
Kathryn Williams
Daniel Ennis

Production:
Rebecca Freyvogel
Melanie Phung