Giving back is part of company’s culture, competitive advantage.
By Ret Boney
Almost 150 years ago, Levi Strauss, who had just started his dry-goods business in San Francisco, donated $5 to a local orphanage.
That gift, the equivalent of about $100 now, began a legacy of community support that continues today, and even defines the $4.1 billion clothing manufacturer.
“From the very beginning it was developed with a mindset of giving back to the community,” says Theresa Fay-Bustillos, executive director of the Levi Strauss Foundation and vice president for the corporation’s worldwide community affairs.
“And that belief that you should share your success with the community is still part of the family,” she says.
The company, which is still privately owned, primarily by Strauss descendants, employs about 8,850 people across the world, and last year funneled more than $10 million into the communities in which it works.
“When family members are young, they are instructed to start contributing to the local community, even when they are kids,” says Fay-Bustillos. “What is remarkable is that they’ve been able to instill that in the company and the employees of the company.”
Those values are now imbedded in the company, says Julie Manga, assistant director of research at the Center for Corporate Citizenship at Boston College.
“They think about philanthropy in the way they think about any other part of their business. It’s not an add-on,” she says.
In 1952, Levi Strauss & Co. formed its corporate foundation to begin building a reserve in anticipation of the inevitable down cycles in business, ensuring the company could still give during hard times.
The foundation now has about $70 million in assets and awards about $10.4 million each year to further its anti-poverty focus, using a staff of 13 people worldwide, all of whom also work with the corporation.
It does that through three main strategies, Fay-Bustillos says, including preventing the spread of HIV/AIDS by helping provide access to clean syringes and fighting the stigma and discrimination that prevent many HIV sufferers from seeking help.
For the last decade, the foundation has invested in helping poor people build assets by supporting micro-enterprise programs and matching savings programs such as individual development accounts.
“You can’t spend your way out of poverty, you’ve got to save your way out,” Fay-Bustillos says.
Outside the U.S., where the company employs contract manufacturers, primarily in the developing world, the foundation also provides grants supporting workers’ rights programs, and educates factory workers on health issues, financial literacy and economic security.
The company’s corporate-giving program, which also makes grants supporting workers’ rights, gives about $1.5 million each year, and individual brands each have sponsorship budgets, which totaled more than $500,000 last year.
Employees are the real drivers of Levi’s corporate giving, and the company has developed several mechanisms to encourage participation.
That includes five hours of paid time each month to volunteer, a payroll-deduction program that one in three employees use, and a dollar-for-dollar matching program that raised a total of $410,000 last year.
And one in 10 employees participate in Community Involvement Teams, company-sponsored groups that organize themselves to volunteer in their communities throughout the year.
For every 25 hours of community service, the team gets a grant that goes to the organization they have supported, and the company’s 72 teams worldwide earned 87 grants last year totaling $188,300 for local nonprofits in 40 countries, Fay-Bustillos says.
Individuals are encouraged to volunteer too, and the company provides grants to the nonprofits where employees work, ranging from $150 for 10 hours volunteered to $1,200 for 80 hours, a program that directed a total of $327,600 in grants to nonprofits in 2004.
Once a year, Levi’s holds Community Day, an event in which all business units encourage employees to participate in community service efforts organized by the company, including projects like building a playground at a housing project and painting a domestic violence shelter.
About 2,300 employees will join the effort this year, contributing 10,000 service hours in 17 countries, with the participation rates at various offices running from 60 percent to 100 percent.
“It’s helped a lot of employees who have never volunteered understand more about being a volunteer,” says Fay-Bustillos. “And we have seen a spike in our other volunteer programs since then.”
That employee commitment took a different turn in 1981 when Jerry O’Shea, who was retiring after 42 years with the company, invested $100,000 of his own money to start the Red Tab Foundation to provide emergency assistance to employees and retirees in need.
The foundation, a separate entity with assets of $15.5 million, last year awarded $600,000 in grants and spent another $600,000 on educational programs, including a money school for current and laid-off employees.
“This is a multi-national corporation,” Fay-Bustillos says. “For these values to live today is really the testament to how much this spirit of wanting to give back has become imbedded.”
With a facility in Canton, Miss., Levi Strauss was quick to respond to Hurricane Katrina, pledging more than $2 million in support, including new clothes with a wholesale value of $1.5 million, more than $450,000 in grants to relief groups, and dollar-for-dollar matching of employee donations.
And the company plans to donate $5.01 for each hour employees volunteer during the company’s Community Day this year, which should total about $60,000.
Levi Strauss & Co. gives back because it’s the right thing to do, Fay-Bustillos says, but the corporate culture that attitude has created has become a big part of keeping employees happy and productive.
“Our employees think this is a great place to work,” she says, “a company that gets it.”