1. CASE STUDY
MEASURING THE BUSINESS VALUE OF CORPORATE PHILANTHROPY
STARBUCKS
FALL 2004
BACKGROUND
Starbucks opened its first café in 1971 and today operates more than 7,000 stores in 34
countries. The Starbucks Foundation was created in 1997 with proceeds from the sale of
founder Howard Schultz’s book, Pour Your Heart into It: How Starbucks Built a
Company One Cup at a Time. Starbucks makes charitable contributions through the
Foundation and/or a direct giving program in communities in which it operates and in
countries where its coffee is sourced. In 2003 contributions of cash and product exceeded
$11 million.
The foundation’s original focus was literacy, but as the company grew so did its giving—
organically and exponentially. By 2003 Lauren Moore, director of giving, realized it
would be wise to step back and make sure that the general direction and specific activities
of The Starbucks Foundation and giving program continued to make sense. As well,
Moore believed that Starbucks’ philanthropic work was contributing to the good of the
community and the company, but there was no tangible evidence for the latter. Starbucks
had long been interested in measurement and metrics, but Moore recognized their
elusiveness in corporate philanthropy. So her interest was piqued when she attended the
Council on Foundations’ 2003 Corporate Grantmaker Summit and heard Frank Walker,
chairman of Walker Information, describe the measurement process his company
developed for the Council. The process would enable Starbucks to measure stakeholder
perceptions and the business value of its own work and to benchmark results with others
in Walker Information’s database.
THE PROCESS
After consulting Walker, Moore decided to measure customer and employee perceptions
of The Starbucks Foundation and the corporate giving program. These stakeholder groups
were chosen because corporate focus groups conducted in 2000 revealed that customers
believed the company needed to be relevant in its own communities and in the larger
world and that employees knew little about what the company was doing outside of their
immediate neighborhoods. Both groups said communication was important but that
“patting-yourself-on-the-back, self-serving promotion” was unacceptable. It was time to
test whether—and how—knowledge and perceptions about Starbucks’ community
involvement activities had changed in the past three years.
Flexibility at Starbucks gave Moore the latitude she needed to move forward on the
measurement process without internal wrangling. Starbucks’ human resources and market
research teams joined her as key partners: market research assisted with the survey’s
customized questions, connecting with customers and presenting results; human
resources helped with the employee survey. The project leaders were Moore and Cathie
Bachy, Starbucks Foundation program manager.
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December 2004

2. Employees
The employee survey was conducted during a national meeting of store managers and
store operations teams. Employees completed the survey in a special booth set up in an
exhibit area. Incentives were offered, including t-shirts and raffles; the top prize was the
ability to sponsor a $5,000 Make Your Mark (Starbucks’employee volunteer program)
project. Employees who participated in the survey included store managers, district
managers, regional directors and headquarters executives and partners. A total of 6,500
employees attended the meeting, and almost 700 completed the survey.
Customers
A random selection of Starbucks customers was drawn from an online database
representing consumers in the top 100 U.S. markets. 2,696 panelists were invited to
answer the questionnaire; 587 qualifying customers (visited a Starbucks location within
the past month) did so. A subset of customers in the greater Seattle area was also
surveyed; 114 out of 218 qualifying customers completed the survey.
THE FINDINGS
Results were consistent with findings to date in other companies: customers and
employees with a high Corporate Philanthropy Index (CPI) score are more likely to have
attitudes and engage in behaviors that will benefit the company than are employees with a
low CPI score. For instance:
Employee Survey
High CPI Low CPI
• Recommend Starbucks to others 98% 77%
• Expect to be working at the 91% 85%
company in two years
Even more striking were some of the differences in customer opinion and behavior:
Customer Survey
High CPI Low CPI
• Recommend Starbucks to others 93% 61%
• Plan to continue to do business 98% 71%
with the company
Both groups were interested in Starbucks’ philanthropic activity and both still believed
that communicating its community involvement was important as long as the information
didn’t appear to be self-serving. Moore learned that store visibility is an important
communications venue as long as that communication is selective and restrained; neither
group wanted to be inundated with information. The survey also revealed that what
stakeholders know with respect to community involvement is not always what they
consider the best fit for the company. And they learned the importance of sticking with
some things over time. According to Moore, Starbucks would often abandon the old for
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3. the new and exciting, but they now realize it takes time for people to become familiar and
associate programs with the company.
Starbucks’ market research team used Walker’s report to prepare a PowerPoint
presentation of the survey results for foundation and corporate executives and Starbucks
employees. They translated it into “Starbucks language,” a tactic that added internal
credibility.
THE COMPANY’S RESPONSE
The survey results helped add validity to Starbucks’ philanthropic work. Because of these
findings, Starbucks is reworking the entire focus and programming of the foundation.
Components will be added and regional grant programs will be changed. Details will be
communicated during 2005. Moore said she expects increased funding for the foundation
in coming years, funding that because of the measurement process the foundation is
favorably positioned to receive—and the staff to invest.
WHAT STARBUCKS RECOMMONDS TO OTHERS CONSIDERING MEASURMENT
Recognize up front the time and work the process requires.1 A dedicated team on the
ground is essential. For Starbucks, it was a six- to eight-month process from start to
finish; Moore predicts that without strong leadership, it would have taken longer.
THE BOTTOM LINE
“In a landscape with few metrics, this measurement tool is tremendously helpful,” said
Moore. “It’s a multilayered process, and the depth of the results will make them valuable
for a long time.”
ACKNOWLEDGEMENTS
Thank you to Starbucks for allowing us this inside look at its measurement process.
Special thanks to Lauren Moore for her candor, time and assistance.
1 Editors note: Two delays common to this measurement process are finding a usable
database of stakeholders from which to draw the survey sample and getting the
permissions necessary to use the database after it has been identified.
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