NEWS STORY: Big companies increasing their charitable giving

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c. 1998 Religion News Service

UNDATED _ Bouyed by the booming economy and public expectations, the nation’s richest companies say their charitable giving will grow 11 percent this year, according to a new survey by the Chronicle of Philanthropy.

The new figures reflect a continuing trend among large corporations.

Previous surveys by the Chronicle found giving by major corporations rose by 3 percent in 1996 and 8 percent last year.

But the survey also found what appears to be a new trend _ companies increasingly are following their workers’ charitable concerns by expanding programs matching employee contributions.

Individual employees, who are also benefiting from the booming economy, are also giving more. Last year, for example, Wal-Mart Store employees raised more than $17 million and the company matched the entire amount.

The 111 companies that responded to the survey reported an 11 percent growth in profits, on average, between 1996 and 1997. Though giving and profits are both rising (coincidentally at the same rate), this doesn’t necessarily mean companies are becoming more generous. Giving in dollar amounts is up, but it’s still only a small percentage of income _ 0.8 percent of the previous year’s pre-tax income in both 1997 and 1998.

Traditionally, IBM has been the most generous corporation, and that holds true for 1997, when the company donated $96.8 million to various nonprofit groups. That amount was in addition to donations of computers and other products with a market value of $51.3 million.

But IBM didn’t provide its 1998 projections to the Chronicle. Among the companies reporting 1998 giving, Philip Morris Companies Inc., the beleaguered tobacco company, is the biggest giver with planned donations of $60 million. After a rough year that saw a slew of suits implicating tobacco in disease, and possible increased government regulation of the tobacco industry, Philip Morris stressed the food side of its holdings by giving $20 million to charities that help the homeless and hungry.

Second Harvest, the nation’s largest charitable hunger-relief organization, for example, will receive $13 million in Philip Morris food products this year _ including tons of Kraft macaroni and cheese, and thousands of Taco Bell dinners.

When gifts of company products are included, Merck & Co. Inc., the New Jersey-based pharmaceutical company, is first. This year the company plans to donate drugs valued at $175 million, in addition to its $32.5 million in cash donations. Merck’s giving overall will rise by nearly 20 percent in 1998, in large measure because of an increase in donations of a drug to eradicate the river blindness disease in central Africa.

The country’s biggest companies like to have the word out they have a grantmaking department, but, according to Chronicle editor Stacy Palmer, they don’t always like to give the details.

There has always been a tension in corporate philanthropy between strategic giving _ what’s obviously in the company’s interest _ and doing good for the community in general. The Exxon Corp. fund, for example, continues to give generously to colleges and universities with first-class departments in geology and chemistry, with an eye toward increasing the pool of future petroleum industry employees.

Similarly, a large part of the Hewlett-Packard Co.’s giving _ $14.9 million in 1997, along with $43 million in products _ goes to math and science education. “We’re all competing for a limited number of technical graduates,” said Hewlett-Packard spokeswoman Nancy Thomas.

The Boeing Company, which merged last year with another aerospace giant, McDonnell-Douglas, gives a lot to key schools with large numbers of engineering majors. But, says Amanda Landers, increasingly the company is giving to smaller, nonprofit groups in the places where Boeing has plants,believing, she says, “You can’t attract good employees if you don’t have a healthy community.”

Sara Lee Corp.’s strategy is to direct much of its $14.9 million in cash contributions and $12 million in company product donations toward charities that benefit women, who make up 89 percent of their customers. “Nearly half of our charity goes to programs that serve disadvantaged people, mainly to improve the lives of women,” said company spokesman Jeffrey Smith.

Surveys have shown that identification with a charity tends to increase customer loyalty. Bill Reinhard, editor of the Corporate Philanthropy Report, said a company’s philanthropy has to be intertwined with marketing. “If the grant-giving department of a company can’t show the CEO that they’re getting some corporate benefit out of the philanthropy,” Reinhard said, “then they’re not going to get much money next year.”


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