Corporate funders retool giving strategies

Julia Vail

Bucking the tide in the bleak economy, corporate giving at some of the largest U.S. companies is prospering, with some expecting to increase their giving.

Increasingly aware of heightened community needs, some companies are looking beyond writing checks to help solve community problems with other resources.

“We’ve continued to invest as a company and continued to grow the foundation,” says Jim Whaley, president and CEO of the Siemens Foundation in Iselin, N.J.

San Jose-based Cisco Systems also plans to increase its giving in the wake of higher earnings.

“We are constantly working on new projects with various organizations,” says Michael Yutrzenka, executive director of the Cisco Foundation.

But the economic downturn also is prompting some companies to re-assess their philanthropic strategies.

Charlotte-based Bank of America, for example, is taking a closer look at the effectiveness of its corporate giving, says Nicole Nastacie, a bank spokeswoman.

“We’re not looking to invest more, but we are trying to be more impactful and thoughtful in our giving,” she says.

And at the Siemens Foundation, says Whaley, the slump “makes all of us sit back and make objectives that are long-term rather than immediate.”

The bright side

In the third quarter ended June 30, Siemens’ revenue increased to $27.2 billion from $24.9 billion in the same period last year.

This year, the Siemens Foundation has provided $4.5 million in scholarships and awards, up from just over $2 million in 2007, says Whaley.

The foundation also continues to expand its programs, recently announcing a multi-million-dollar partnership with the Discovery Channel and the National Science Teachers’ Association, he says.

At Cisco, net income in the fourth quarter ended July 26 grew by 4.4 percent from the same period last year.

So the Cisco Foundation plans to increase its giving, says Yutrzenka.

One new project is the National Center for Learning Disabilities, which works to help children with learning disabilities achieve their full potential.

At Bank of America, however, net income fell to $3.41 billion in the second quarter ended June 30, compared to $5.76 billion in the same period last year.

Still, the Bank of America Foundation does not plan to change its charitable-giving program.

“In 2007, we gave $200 million in charitable donations,” says Nastacie, the spokeswoman. “Despite the uncertain economic climate, we hope to repeat that $200 million this year.”

But in 2009, she says, Bank of America will embark on a 10-year, $2 billion initiative to benefit nonprofits that address immediate needs in communities.

Kerry Sullivan, national philanthropic executive at the bank, says that, because of the economic downturn and housing crisis, the company is launching a $35 million neighborhood-preservation initiative that includes $10 million in grants to nonprofits offering foreclosure-prevention counseling.

As a rule, the bank provides unrestricted funds that nonprofits can invest as they see fit, Sullivan says.

“Particularly when things are tough with the economy, we try to build capacity and support leadership development,” she says.

Rising needs

Some executives say that, while the economic slump has been tough on their corporate-giving programs, it has been tougher on the community initiatives they serve.

“We’ve seen an increase in need by schools across the country,” Whaley says. “That’s why we find it so important to continue to do what we’re doing.”

In response to greater community needs, Progress Energy in Raleigh, N.C., has doubled its donations to the Energy Neighbor Fund, which helps low-income families stay warm in the winter.

The company has increased its donations to $1 million from $500,000 last year.

“We are questioning, ‘Do we need to be doing more?'” says Woody Dicus, corporate community relations manager for the utility company. “The vitality of our communities is very important to our company.”

Employee volunteers

Corporations looking for alternatives to cash giving are finding that people are a valuable resource.

Progress Energy, for example, recently celebrated its 100th anniversary with a “Summer of Service” initiative for which employees volunteered nearly 10,000 hours to local charities over 100 days.

And Cisco is putting emphasis on volunteer efforts that utilize the company’s specific strengths, Yutrzenka says.

Cisco recently used its expertise, for example, to help the Grameen Foundation launch a web-based platform for its micro-financing program.

“I see more of the core competence of the organization being injected into the program,” Yutrzenka says. “We’re helping them get these projects off the ground while helping them think about sustainability in the long-term.”

Aiming for sustainability

With the economic future uncertain, some corporations are looking for ways to increase their own sustainability.

At the Siemens Foundation, for example, Whaley advocates increased collaboration among corporate foundations.

“If we can share knowledge, and the financial burden, it would reduce costs because we wouldn’t have to go outside to figure things out,” he says. “We have to be open to the idea of changing paradigms.”

While they might sacrifice independence by joining forces, Whaley says, corporations could enhance both their scope and their effectiveness.

“Corporate foundations are better served when there is a diversity of ideas,” Whaley says.

Yutrzenka says the economic downturn may even be a boon to corporate giving by forcing foundations to assess what they’re doing well and what they could do better.

“I think we’re going to see an increase in visibility and knowledge,” he says. “This is a way to think more strategically about how you give.”

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