Corporate giving: greater care in extending care
The face of corporate good citizenship is changing. There is a new professionalism among contributions officers, and businesses are beginning to see philanthropy as an investment, not a handout
Corporate philanthropy has a new agenda these days.
Businesses are becoming more careful about where they put their charitable dollars. The last few years have seen increased professionalism on the part of many corporate contributions officers.
''I don't know that we had a strategy three years ago,'' says Phyllis Quan, associate director of the Atlantic Richfield Foundation in Los Angeles. ''Three years ago we didn't really have professional program officers.'' Now there are three.
Atlantic Richfield and others recognized as enlightened givers are becoming more ''pro-active,'' seeking out areas in which to contribute. They are less inclined to wait for requests to fall into their laps.
''We get one request every two minutes,'' Ms. Quan says. ''But you've got to spend part of your time out on the streets; you've got to know what's going on.''
Surprising as it may sound to some, though, there is a school of thought that maintains that charity not only begins at home, but properly stays there.
Hard-nosed economists like Nobel Prize-winner Milton Friedman argue that corporations have a moral responsibility to turn profits over to their individual stockholders rather than give them away.
Doug Bandow, a former Reagan administration official who is now editor of Inquiry Magazine, says he does not espouse that strict view, but observes that ''business activity is a service to the community, whose members fill the jobs created, use the goods produced, and enjoy the services offered. Were it not for the material prosperity resulting from business activity, private philanthropic institutions would not exist.''
Others question how well equipped smaller companies, in particular, are to make sensible donations to charity.
A foundation officer in the Midwest puts it this way: ''If a trucking company , say, has an extra $100,000 kicking around, who's to say they shouldn't buy another rig? Someone would have to build it, and so they would help create a job in Detroit, and then they've got to hire somebody to drive it, and then they make a profit and do the whole thing again.''
In any case, corporate philanthropy is only a small proportion of total charitable giving in this country - despite all the publicity surrounding corporate sponsorship of art exhibitions and public television programs. Most major companies give to charity. But corporate philanthropy last year came to about $3.1 billion, or some 5 percent of the nation's total charitable giving.
Most companies do feel that they should give to charities - or ''nonprofits, '' as they are often called. But many observers question how effectively this philanthropy is administered. ''I don't see business carrying the same informed decisions into their charitable giving as into their business,'' the foundation officer says.
Jan Dauman, chairman of the Intermatrix Group, a consulting firm in Westport, Conn., says: ''One has to separate state-of-the-art companies from the rest. I get the impression that when Reagan came in and made his great push for the 'New Federalism,' a number of companies had a fresh look at the whole range of their corporate responsibility activities.
''A very tiny minority have always done it right, bringing the same degree of professionalism and management to their philanthropy as to their other business operations. I would say some 50 of the Fortune 500 are doing a good job. And that is appalling.''
Companies are developing their own philanthropic identities, just as they have developed market niches and distinctive product lines. Mary Pickard, corporate contributions officer at the St. Paul Companies, of St. Paul, Minn., says, ''We try to be courageous and innovative as an insurance company, and we try to express that in our philanthropy, too.''
Developing an agenda helps a company say yes more constructively. ''And it also makes it easier to say, 'No, we can't help you, and here's why,' '' observes Alex Plinio, president of the Prudential Foundation and vice-president of the Prudential Insurance Company of America.
Companies have a number of criteria for their philanthropic agendas. These often grow out of a natural connection to the business, as in the case of a food company becoming active in nutrition-related charity. Many companies support colleges from which they recruit employees.
Insurance companies, which have a particular '' 'connectedness' to their communities,'' as Ms. Pickard puts it, tend to go in for community economic development, health-care cost containment, and other nitty-gritty kinds of social issues.
Some companies, such as fast-food chains, have such a broad customer base that they can justify taking money for charitable gifts out of their advertising budget; they can get the same publicity with a gift as with an ad.
Companies with a high visibility in their headquarters communities tend to tailor their giving to the needs of those communities; this is the case with Atlantic Richfield, says Ms. Quan.
Corporate philanthropy has come into the limelight because of President Reagan's much-publicized plea for corporate philanthropy and volunteerism to fill the gap opened by budgetary cutbacks. But studies by the Conference Board and others have indicated that major companies are not responding in a big way.
More important to many observers than the debate over ''closing the gap'' is the concern that corporations are being pressured into certain ways of giving.'' Mr. Bandow, of Inquiry Magazine, argues against the focus on a philanthropic ''establishment'' and decries what he sees as an attitude of ''Give us your conscience money and we'll spend it.''
He adds, ''Philanthropy is done best at a very local level. What bothers me is the idea of companies getting together to set some kind of uniform standard'' for corporate giving, such as the ''5 percent goal'' subscribed to by many.
Observers in and out of corporations argue that numbers alone don't give the whole story of a company's philanthropy.
And it may sound almost facetious to say so, but it takes time and effort to give away money constructively. Ms. Pickard of the St. Paul Companies, which gives 2 percent of its pretax profits to charity, says, ''It's not just the amount of money, it's the quality of giving. Assuming we had 5 percent before profits to give, we'd have trouble giving it responsibly.''
If a corporation's contributions office or foundation is understaffed, it hasn't time to investigate new and potentially controversial organizations; the temptation is to go with the tried and true - the Boy Scouts, the symphony league, and the like, whose financial needs must be reviewed but whose basic worthiness is accepted as given. There is also a tendency to support ''glamour'' causes, especially the arts, rather than human services.
Some advocates of ''nontraditional'' social agencies, such as those serving minorities or the handicapped, lament the amount of corporate giving that goes to the United Way, which these critics view as ossified into a pattern of serving the same old ''establishment'' agencies. The United Way disputes this assessment, though, and Prudential's Mr. Plinio maintains, ''The United Way has opened up tremendously.''
''Corporations, to give them their due,'' says Robert Bothwell, director of the National Committee on Responsive Philanthropy in Washington, ''have clearly been becoming more conscientious and thoughtful in their grantmaking. However, you still have a tremendous difficulty with corporations getting out of the bounds of their corporate offices to meet smaller groups.'' In other words, it is sometimes difficult for company officials to get themselves out of the executive suite to research neighborhood charities.