Corporate giving programs constitute good citizenship and good business

NONPROFITS INC.

December 20, 1993|By LESTER A. PICKER

Passion isn't normally a word we associate with corporate charitable giving programs.

Yet, I had no sooner taped a commentary on corporate charity for the program "Marketplace" on National Public Radio when I received calls taking positions on either side of mine. Some callers favored a more vigorous corporate giving program; others were opposed.

But it was more than two months later when a most interesting, and passionate, letter arrived at my door.

It had been routed to me through The Sun (my editor, obviously taking his cue from the U.S. Postal Service, keeps them in a pile for maybe six months before forwarding).

The letter writer, a prominent Los Angeles attorney, agreed to allow me to reprint part of it. As you will see, corporate philanthropy is far from universally accepted.

"Of course," the letter writer states, "it's much easier for charitable organizations to get their hands on big bucks if they can get them from the corporate treasury, rather than waiting until after they've been distributed as wages and dividends. So, I understand charities' enthusiasm for corporate gifts."

After pointing out that management is only one constituent of a corporation, the attorney goes on to say, "corporate giving represents an allocation by management of a portion of the assets of the corporation away from all other constituencies to whatever charities may be selected by management. A management whose judgment . . . may or may not be good, and may well be swayed by subtle bribes, ranging from entertainment to ego-stroking."

But, it is in the writer's final volley that the passion of his argument really emerges:

"By what right does the management of a business entity divert a portion of the assets away from all those who contribute to the business to organized mendicants and sycophants? The real effect of corporate contributions is simple. They promote cozy relationships between professional fund-raisers and professional managers. I cannot see that as a desirable social objective."

Bear in mind that this attorney asked me to not use his name, since he is the legal counsel to several corporations. In my telephone conversation with him, he also railed against excessive executive compensation and perks such as art in the executive suite, art that shareholders and clients wouldn't have been able to fight their way up to see.

I also faxed a copy of the letter to Peter Morrow, manager of corporate contributions for E. I. Du Pont de Nemours in Wilmington, Del., to gauge his reaction. As one entrusted to manage the allocation of about $33 million in contributions each year, I felt Morrow would bring some balance to the issue.

All corporate people involved in giving get this issue raised. What we do is closely connected to the business and adds shareholder value, Morrow responds. It is an expectation in our society to act charitably. But, beyond that, is the social responsibility aspect of business.

I asked Morrow if corporate philanthropy helps the core business. Corporate image is another issue. With a good corporate-giving program, people think better of you, may buy your products, and hold your stock. They view the business as a socially responsible citizen. That translates onto the bottom line.

"I also share the view that employees benefit," Morrow adds. "I can't say that I've had one call from a disgruntled employee. We have maintained a consistent giving program in the face of severe cutbacks at Du Pont. Employees know that we are investing in the communities in which we work, live and play."

One area of agreement between Morrow and my letter-writing attorney is in the all-too-common situation where a CEO makes all the corporate giving decisions, without a well-thought-out plan. That practice has been a major contributor to the negative image of corporate giving.

One final note: A mendicant is a beggar, according to Webster's Third International Dictionary. Look up "sycophant" yourself.

(Les Picker is a philanthropy consultant. Write to him at 71 Bathon Circle, Elkton, Md., 21921; [410] 392-3160.)

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