Cisco Corporate Philanthropy

Academic Case Study by:
Laura K. Arrillaga, David Hoyt
Published: 2003
[photo - Laura K. Arrillaga]

Cisco Systems was founded in 1984 by Stanford University husband-and-wife team Leonard Bosack and Sandra Lerner. The company developed and commercialized products that enabled computers to communicate with one another. As networking took off, Cisco’s sales grew rapidly and the company went public in 1990. By 2001, Cisco had achieved $22 billion in revenue. Although a subsequent downturn in the technology industry prompted the workforce reduction and reorganization, Cisco’s commitment to its customers and community remained a priority.

Corporate philanthropy constituted an important element of Cisco’s culture and strategy from its earliest days. Cofounder Lerner set the tone, believing that a company should support the people and community that ensured its success, in addition to achieving profitability for shareholders.

Beginning with small-scale activities focused on community relations, Cisco’s philanthropic involvement grew into a substantial program that leveraged employees’ technical and intellectual capabilities in tandem with the company’s philanthropic investments. In 1997, Cisco created the Cisco Systems Foundation with $65 million to formally establish the company’s philanthropic efforts.

By 2002, Cisco’s corporate philanthropy was based on a clear strategy of leveraging Cisco’s unique internet competencies to effect positive, global change. To this end, Cisco contributed more than $205 million from the Foundation and other corporate sources. As of 2002, Cisco had three primary philanthropic efforts: (1) the Community Investment Fund (CIF), which predated the Foundation and allocated $1 million per year available for philanthropic spending; (2) Global Partnerships, which oversaw the Cisco Community Fellowships and relationships with organizations like Habitat for Humanity and the United Nations; and (3) the Cisco Foundation.

As the Foundation moved beyond its start-up stage, Cisco’s director of corporate philanthropy, Tae Yoo, wanted to assess the philanthropic program’s results. She hoped to evaluate whether the Foundation was effectively utilizing the company’s core strengths to maximize its impact. Yoo also wished to demonstrate that the Foundation’s short-term costs to shareholders had yielded long-term benefits for both Cisco and its grantees.

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Case No: SI58