After corporate foundation CEOs rang the opening bell at the New York Stock Exchange on Monday, February 22, the indexes barely moved. No matter, ringing the bell is a show of negligible interest to nonprofits whose concern is not the photo-op, but the prospects for philanthropic grantmaking from corporations.
Why the show? Monday was “International Corporate Philanthropy Day,” sponsored by the Committee Encouraging Corporate Philanthropy (CECP). It’s fashionable in the undertow of the Great Recession to condemn anything and everything connected to the corporate world, much of which has displayed a level of greed and self-interest in the past couple of years that would embarrass Gordon Gecko. But CECP was the brainchild not of corporate robber barons, but of the late actor Paul Newman who in 1988 created the organization collaborating with John C. Whitehead (then of Goldman Sachs), Peter L. Malkin (a wealthy investor in real estate, including the Empire State Building), and Walter V. Shipley (then the chair of Chase Manhattan Bank).
OK, Goldman Sachs and Chase (now JP Morgan Chase) have been up to their eyeballs in the current economic crisis and beneficiaries of the nation’s TARP bailout largesse. But these people were and are also big-time philanthropists who believed, like Newman at the outset of CECP, that corporations should devote more of their capital and philanthropy (an original CECP target was two percent of pretax profits):
- All of the profits from Newman’s Own products go to charity, now mostly through the Newman’s Own Foundation, which reports around $285 million in grants to charities such as the Safe Water Network, the United Nations Association (UNA-USA), and the International Rescue Committee (IRC).
- No surprise to see IRC and UNA-USA on the Newman grant list. Whitehead was the chair of the UNA board and served on the IRC board, in addition to charitable and philanthropy roles as chair of the Andrew Mellon Foundation, chairman emeritus of the Brookings Institution, and chairman emeritus and honorary life trustee of the Asia Society.
- Shipley has his own philanthropic interests, most notably chairing the Wallace Foundation, the Wallace-Reader’s Digest Funds, and Goodwill Industries of Greater New York & Northern New Jersey, Inc., and Wallace-Reader's Digest Funds.
Maybe you wouldn’t necessarily vote along the same lines as these guys (except for Newman, perhaps)—Shipley’s political history, for example, includes his board involvement in the Friends of Giuliani Exploratory Committee, Bush-Cheney 04, and Romney for President—but they are legitimate actors in corporate philanthropy, not much different than many of the lower profile corporate grantmakers who nonprofits eagerly solicit for support and thank for their default “generosity.”
Scheduled to ring the opening bell at the NYSE were top executives of the philanthropic arms of Alcoa, Bloomberg, Capital One, General Mills, Intel, Moody's, The McGraw-Hill Companies, and ITT (). Presidential advisor Melody Barnes will address CECP’s “Board of Boards CEO Conference” and CECP itself releases a new report on measuring the impact and value of corporate philanthropy (authored by Terence Lim of Goldman Sachs Asset Management).
Measurement, impact, outcomes are all the rage in philanthropy of all kinds, corporate and otherwise. But nonprofits may be less interested in this kind of investment pep talk aimed at skittish corporate CEOs and shareholders. They are more interested in what is happening to corporate philanthropy during this prolonged economic downturn.
So how’s the Great Recession treating corporate grantmaking?
CECP’s 2009 benchmarking report [PDF} on corporate grantmaking in 2008 examined the grantmaking of 137 corporations, including 55 in the Fortune 100. A little more than half of the surveyed corporations increased their grantmaking in 2008 over 2007 despite the beginning of the crash in the latter part of 2008. Was this news? Roughly the same proportion answered the previous year’s CECP benchmarking survey reporting increased giving, with no economic downturn in sight, but a booming record-high stock market.
Where was the increased giving? For the corporations reporting higher grantmaking totals, it was in non-cash giving—hugely.
This has to be a concern for the nonprofit sector. In-kind and donated staff contributions are fine, but they won’t help nonprofits meet payroll and pay the rent.
Among the 55 top corporations in the survey reporting on their 2008 giving the TARP-subsidized Bank of America (which we anticipate to be as likely as any of the financial sector firms to maintain its philanthropic grantmaking), Citigroup (which was on death’s door until its TARP bailout), Goldman Sachs (whose record post-TARP profits have required the firm to announce a major reputation-burnishing new corporate philanthropy program), JP Morgan Chase, and Morgan Stanley.
It is important to see that the reporting corporations are typically the survivors of economic shake-outs, and they might not be there with similar numbers the next time around. In CECP’s 2008 study [PDF] on 2007 grantmaking, among the top corporations (69 from the Fortune 100) that were nonrespondents in 2009 were Fannie Mae, American International Group, Washington Mutual, and Wachovia, among others. If you factor in the corporations that were missing in action in 2009, the report on corporate grantmaking as the recession got underway turns gloomier.
Let’s not kid ourselves about corporate philanthropy. Some observers may be concerned about accepting money from corporations that they hold responsible for various kinds of economic crimes, but most nonprofits will take the corporate largesse if it is made available.
But in terms of evaluating corporations, giving them a pass because of their philanthropy without looking at how they treat communities and their employees is extraordinarily myopic. Even then, most corporations have figured out the language of corporate social responsibility, generating enough glossies and programs to give themselves the veneer of being corporate good guys.
No matter how jaundiced the view of corporations in the U.S. economy, the CECP opening bell corporations tend to rank high on the good-guys list, particularly the latest 2009 edition of the “Annual CRO 100 Best Corporate Citizens List” published by Corporate Responsibility Officers Association. Four of the eight bell-ringers are in the top hundred [PDF]:
Overall Corporate CSR Rank
Ranking highest in philanthropy in the CRO ratings (looking at cash, noncash, and employee matching gifts, among other philanthropic possibilities were the following: Eaton Corporation (#1), Dow Chemical (#2), IBM (#3), Avon Products (#4), Northern Trust (#6), Mattel (#8), Verizon Corporations (#9), and Xerox (#10). In terms of overall corporate citizenship, the environmentally destructive (and climate change-luddite) Exxon ranks 11th, the sweatshop firms the Gap and Nike 24th and 26th respectively, and the surviving banking and financial services firms that led the nation’s economy down the tubes, Wells Fargo 64th, US Bancorp 68th, JP Morgan Chase 93rd, and Goldman Sachs at 100th.
Remember this: Nonprofits can and should solicit money from corporations. But they shouldn’t forget their own standards of behavior to fall prey to corporate reputation-cleansing philanthropic strategies. And they shouldn’t sacrifice their advocacy voices and become silent about financial and ethical misdeeds of the corporate sector, even if they are reprehensible actions of the corporations that gave the grants.