- REUTERS/Neil Hall
LONDON – In 2013, Japanese manufacturing giant Toyota made a decision. It was a major donor to The Food Bank For New York City, the largest anti-hunger charity in the US.
But rather than offering money, it decided instead to offer “kaizen,” the Japanese word for “continuous improvement.” Put simply, it offered its time and expertise in a bid to speed up and improve the charity’s performance of basic tasks.
The results of Toyota’s efficiency drive were dramatic. The New York Times reported that the wait time for dinner at the charity’s soup kitchens was cut from 90 minutes to 18; the time volunteers spent packing boxes of food in some warehouses was cut from 3 minutes to 11 seconds.
The move formed part of a growing trend towards private companies offering their time and consultancy skills to support their financial donations, and four years on US bank JP Morgan has adopted a similar approach in the UK.
For three weeks in June, it sent 16 of its top-performing employees from offices as far-flung as Taguig City, Taipei, and Sydney to spend three weeks consulting on non-profit projects in east London as part of the bank’s “Service Corps,” a project it initially launched in Detroit, Michigan.
- JP Morgan
The non-profits which were selected included Fair Finance, which gives low-interest loans to people in financial trouble, and anti-poverty organisation Toynbee Hall.
So what did the JPM team do? Ryan O’Grady, co-head of JPMorgan’s Global Fixed Income Syndicate business, acted as a mentor on the Fair Finance scheme. He told Business Insider that the charities selected are already well-run and successful.
“We’re certainly not coming in to fix anything or simply consult,” he said. “It’s more a case of trying to understand what they’re trying to accomplish, and the best way for us to assist them.”
In the case of Hackney-based Fair Finance, the majority of work focused on helping them improve their annual report and marketing materials to make it more catchy and “impactful”, which is particularly important for the charity as it is trying to roll out the scheme across the country.
O’Grady said: “There’s the process of selecting the information that you want to put forward and then there’s the way in which you put it forward – how you marry the two together is quote a technical skill. In the case of Fair Finance, these people make loans. That involves product design, underwriting,a tech platform, people interacting with clients, managing a client relationship. All of those things you would conventionally see in a bank.”
“But then there’s also the presentation and execution of that business plan which has to take place in the context of what the company’s stated as their social goals. So really it’s about refining and presenting that information in the most effective way possible,” he said.
In that sense, it doesn’t feel unfamiliar from the routine consulting work that the bank performs. “Working with reports, working with investor presentations, looking at the various ways in which a business and its various objectives can be represented to prospective stakeholders – that’s our bread and butter,” O’Grady said.
Another task was helping charities with issues related to new revenue streams. The need for charities to do so is increasingly pressing. From a height of £6 billion in 2003, the annual value of public sector grants to the charity sector plummeted to £2.2 billion in 2013, and there is little sign of that changing as austerity continues to constrain the public purse.
Eva Rapp, usually works for JP Morgan as a commercial banker in Los Angeles, was based at Toynbee Hall, where the team where she and her colleagues to “align the charity to a more commercialised approach which is “appropriate for their sector.”
In the case of Toynbee Hall, the charity had already created some “very interesting [revenue] models. There have sold some consultancy services to housing authorities and they’ve commissioned research based on that which is starting to generate a little bit of income.”
After a week interviewing around 25 Toynbee Hall staff, Rapp and her team consulted with project managers and sector to try and make the charity’s operations more focused and its squeezed resources more efficient.
“It’s completely acceptable for charities to want to make a profit as long as they have the proper mechanisms for reabsorption into the business,” Rapp said. “The issue for them is twofold. One is being able to make sure their that are completely in line with their core mission: That they do not sell out, don’t stray into partnerships that are non-core to their mission.
“Secondly, from a cultural perspective, not-all non-profits are naturally adept to thinking in that way. That’s why a programme like JP Morgan Service Corps can be helpful: To take a private-sector business lens to their public sector talents.”