Firms dig deeper for good causes

Hurricanes Katrina and Rita and the Indian Ocean tsunami brought such a surge in corporate philanthropy that a sharp decline seemed likely to follow.

In fact, the world's largest corporations raised their charitable giving by 4.8 percent last year, according to a report by the Committee Encouraging Corporate Philanthropy.

"Corporate philanthropy had a terrific year in 2005 in terms of companies stretching beyond their budgets to reach out to victims of natural disasters around the world," said Margaret Coady, who wrote the report. In 2006, she added, more companies "went beyond their stretch year than didn't".

Comparing charitable giving among a group of 97 companies, the New York-based CECP found that the median total last year was $32.6 million, up from $29.5 million in 2005. The report noted that increased donations by financial and computer-services companies helped offset cuts by manufacturers.

The report is a snapshot of the top tier of corporate giving. The committee is made up of 168 chief executive officers and chairmen representing large corporations, most of them US-based, and the companies that completed its survey in 2006 and 2005 include seven of the 10 biggest US companies by revenue: Wal-Mart Stores, Exxon Mobil, Chevron, General Electric, Citigroup, Bank of America and American International Group.

Companies in service fields accounted for much of the increased philanthropy in 2006 among top corporations, while many manufacturing companies reduced their giving, the report says. Among the service companies, Wall Street and other financial firms led the surge, Coady said.

Strong profits

"A lot of finance companies have had several years now of very strong profits and have seen their charitable contributions go up," she said.

The report also found continued growth in corporate giving to causes outside the United States.

"Companies overall are doing more internationally than they were a few years ago," Coady said. "A greater percentage of their budgets are going to international recipients."

In this trend, manufacturing companies are out front. The report singles out Dow Chemical Co, whose CEO is a CECP member, for making expanded international philanthropy "a key element" of its global growth strategy.

In choosing where to contribute money, Dow "focuses on the future presence it seeks to secure in a region", the report says.

Bloomberg News

(China Daily 10/19/2007 page16)