Philanthropy includes U.S. non-profits


March 02, 1992

You know what I like about my friend, Brett Schoolnick?

Among other things, he's a pretty fair guy. He's also passionate about his work. His company, Baywood Design-Build Group in Columbia, has won more awards

and recognition in the past few years than most firms will ever see -- if they survive this recession.

Lately, Brett has been angry. After painstakingly building a thriving business, he has been forced to deal with the results of a difficult economy. Some of that anger is directed against the Japanese government and Japanese-owned corporations, the result of what he feels are blatantly unfair trade practices.

A couple of months ago, we were shooting the breeze about Japanese corporate practices, which spurred me to investigate their charitable practices further. Japanese corporate philanthropy to American non-profits is not only enormous, it is the fastest-growing form of American philanthropy, period.

In 1990, Japanese companies donated more than $300 million, 10 times what they gave just four years prior. Experts estimate that the figure will quickly grow to more than $1 billion a year.

So, isn't that great? Not according to Pat Choate, the Washington-based author of a book about Japanese lobbying.

According to Mr. Choate, the money Japanese companies spend on American charities is a deceptive practice designed to influence legislators and stymie opposition to its unfair trade practices. Mr. Choate makes a persuasive argument, linking his carefully documented case histories of Japanese lobbying efforts to their charitable activities, too.

The problem with arguments like Mr. Choate's, as I see it, is that they falter under closer scrutiny.

Take the issue of Japanese corporations trading charity for influence. So what else is new? Welcome, Japan, to the world of American (or Russian, or French, or . . .) business. Sure, a high percentage of American corporate charity is driven by good people doing good deeds. But, you're not going to tell me that at least some of the $145 million given by IBM last year to charity was not done so for completely altruistic reasons.

Nor should corporate charity be driven by those seeking sainthood. A for-profit corporation is in existence to make profits for its shareholders.

As a consultant to corporate giving programs, my job is to make sure that corporate goals are advanced through giving programs. I just happen to believe that excellence in charitable giving is entirely consistent with excellence in all other aspects of running a business. How is IBM to stay competitive, if it doesn't support quality science and math instruction in our schools?

So, our Japanese colleagues are doing nothing more than what any good business should be doing. In fact, my research has shown that many of their giving programs are actually more effective than their American competitors. I wonder if that could have anything to do with the recent criticism being leveled at them?

Take the American Honda Foundation, for example. When they started their foundation many years ago, they pledged to treat people with respect, return phone calls within 24 hours and employ other quality management tools for which they are known in their main businesses. These practices are heretical to many corporate givers, where the first thing they require from requesters are bloodied knees.

Next week, I'll look at two excellent resources for non-profit organizations seeking funding from Japanese companies in America, as well as some success stories and failures in making the Japanese money connection. And, there are some caveats for the unwary.

Les Picker, a consultant in the field of philanthropy, works with charitable organizations and for-profit companies.


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