Japanese Firms Use Philanthropy To Build Image
Companies try to address bad feelings stemming from trade friction. CORPORATE GIVING
JAPANESE corporations such as Toyota have become firm converts over the past few years to the rewards of philanthropy. A key to their newfound pursuit has been the belief that charity begins in the United States.
Japanese companies pledged an estimated $300 million to American nonprofit groups in 1990, the latest figure available, and the greatest amount of foreign giving ever in the US.
But now the depressed Japanese stock and property markets, along with lackluster performance from US subsidiaries, are causing many Japanese companies to reconsider their generosity.
Gone are the dazzling one-shot donations of the late 1980s. Shiseido Corporation's $85 million gift to Harvard University (spread over 10 years beginning in 1989) for a biology research center and Hitachi's $16 million pledge, also in 1989, to the University of California at Irvine for a biotechnology laboratory are relics of a more freewheeling time.
"It is more difficult for them to give that kind of money," says Yoko Suzuki, in charge of Japanese corporate membership at the Japan Society in New York. "They are having budget cuts, and when they cut their budgets, they decrease the amount of contributions." Giving will continue
But Japanese philanthropy in the US is hardly about to disappear. What is being maintained are donations from Japanese companies with endowed foundations. For example, the Hitachi Foundation, with an endowment of $29 million, pledged about $2 million to US recipients in 1991 and plans to commit about the same amount this year.
Mitsubishi Electric launched a foundation in February with $15 million. It expects to give $500,000 this year, and to increase the endowment to $50 million by 1996.
Perhaps most significant is how Japanese giving itself is changing. More time and money is being donated to community- development organizations and causes at the grass-roots level.
Of diminished importance are top US universities and broad-based charities like the United Way, although such organizations remain by far the major recipients of Japanese largesse.
Peter Kamura, executive director of the Japan Center for International Exchange in New York, criticizes Japanese companies for not fully appreciating "the fine distinction between public relations and philanthropy." But he points out that once-common checkbook diplomacy is rapidly falling out of favor, signaling a maturation of Japanese giving in America.
Katherine Jankowski, editor of a seminal publication, Inside Japanese Support, is more sanguine. Japanese companies, she says, "really have gotten the message that community-based activity and involvement is the most effective form of corporate giving."
Indeed, after the destructive riots in Los Angeles in April, four Japanese-owned banks - Bank of California, UnionBank, Sumitomo Bank of California, and Sanwa Bank of California - pitched in $500,000 between them to the "Rebuild Los Angeles" program. Community grants
The IBJ Foundation, the US giving arm of the Industrial Bank of Japan, this year made contributions to three New York-based community agencies: the Local Initiatives Support Corporation, which promotes social services and low-income housing; Neighborhood Housing Services of New York City, also an advocate of affordable housing; and the Fund for New York City Public Education, which has developed a program to teach geography to local high school students.
Meanwhile, Japanese corporations are using their charitable efforts to score public-relations points in the US. Companies have purchased full-page advertisements in leading US magazines and newspapers.
Toyota Motor Company places ads in publications such as Time, Newsweek, and Forbes. The ads highlight Americans who have been helped by charities and community groups that have received contributions from Toyota or its endowed Toyota USA Foundation. Toyota's name appears discreetly in a lower corner of these "advertorials" above the line: "Investing in the Individual." Creating a softer image
One Toyota ad highlights the Chesapeake Bay Foundation, which takes school children out into the Bay to promote environmental awareness. Another promotes the Chi Chi Rodriguez Youth Foundation, founded by the professional golfer, which guides troubled youngsters.
The series also features more well-known organizations such as Special Olympics International and the United Negro College Fund, both of which have had Toyota's support. Toyota gave about $10.1 million to US charities in 1991, including about $2 million from the Toyota USA Foundation.
"There's very little corporate chest-beating going on," says Timothy Andree, a representative of the Toyota subsidiary based in New York that produced the ads.
"We're trying to show beyond the product a little bit of the corporate personality, and also the fact that we're trying to live up to our obligation in the community," he says.
The strategy is subtle, but specific. Not only do the ads draw attention to worthy causes, but they also identify Toyota as a good corporate citizen, something more than a faceless entity interested only in the bottom line.
US and European companies, especially giant oil, energy, and automobile concerns often use similar forms of print and television advertising to tout their sensitivity to environmental and social issues.