How Survey of Charitable Giving by Major U.S. Companies Was Conducted

The Chronicle’s corporate-giving survey is based on financial information provided by many of the nation’s top companies as ranked according to their annual revenue by Fortune magazine.

A total of 150 companies were asked to provide figures on their charitable giving for 1996, 1997, and 1998. In response, 111 of the companies either filled out a Chronicle questionnaire or submitted financial information, such as annual reports or informational tax returns from the charitable foundations they support.

Because companies are not required by law to provide information on how much they give, it is hard to paint a complete portrait of corporate giving among the nation’s top businesses. Companies that are more generous may be more likely to report their figures than those that are not.

The 39 companies that refused to provide information on their giving offered numerous reasons for doing so. Some said they were unable to participate because they did not have a centrally administered giving program.

TIAA-CREF, a pension company that lost its tax-exempt status last year, declined to provide information because it said it did not have a formal corporate-giving program. In a statement, the company said that it gives some money to United Ways to match employee gifts and makes modest donations to a few local New York charities. But, it says, all of its earnings go toward the company’s original, non-profit mission: to serve its clients — who are employees in higher education and related fields — at the lowest possible cost.

Other companies said that they have a policy that prohibits disclosing information about their charity. That may change. The Securities and Exchange Commission, the federal agency that monitors corporate transactions, is studying the feasibility of a Congressional proposal that would require companies to tell shareholders what charities the corporations support and how much is given to each. The agency is expected to complete its report this summer.

For now, corporations that make charitable contributions do not have to disclose anything about those gifts to shareholders. Companies that make gifts through foundations must list the recipient and amount of each grant on their federal informational tax returns, which they must make available to the public for 180 days after they publish a notice that they have filed the form with the Internal Revenue Service.

Companies that participated in The Chronicle’s survey were asked to include donations from the entire business, including subsidiaries, and for all gifts to domestic and foreign charities alike.

The companies were also asked to report separately their cash and non-cash gifts. The non-cash gifts were to include donations of company products only, and were to be valued according to their fair market price, not their production cost. In some cases, companies may have included the value of other in-kind gifts, such as used office equipment or the cost of printing materials for a charity, in its non-cash-giving totals.

Even though non-cash gifts other than company products were not included in company totals, some businesses reported substantial — and unusual — in-kind contributions.

In addition to the $814,000 worth of avionics equipment it donated last year, Allied Signal, an aerospace company in Morristown, N.J., reported giving away the rights to 17 patents owned by the company. The patents for high-performance metal alloys — which may prove to be marketable in the aerospace industry — could be worth more than $7-million, according to Allied Signal. It gave the patent rights to the University of Virginia’s engineering school.

Along with the food it plans to contribute this year, Sara Lee Corporation plans to give 20 museums works of art, valued at a total of $100-million, from its corporate collection.

Examining the figures that companies report for their cash and non-cash gifts may be tricky. Simply comparing a single company’s giving from year to year can even be misleading.

In some cases, a company’s philanthropy may appear to fluctuate when, in fact, an increase or decrease may be due to a company’s having failed to spend its entire budget one year and carrying forward dollars to the following year. In other cases, a company may make a big, multiple-year grant that it reports in its giving budget one year and not the next.

While observers of corporate giving typically measure a company’s generosity by comparing the business’s charity budget to its profits, the formula is often not so simple.

Dayton Hudson Corporation, for example, the department-store business known for its policy of giving 5 per cent of earnings annually, calculates its gifts based on the portion of its income that is subject to federal taxes. That figure is sometimes more and sometimes less than the company’s reported income figure.

Caution should also be taken when comparing the giving records of different companies. Some companies do not keep track of the giving of all their divisions through their corporate headquarters, for instance, or they do not include donations made to charities overseas. Some companies reported only the money donated by their foundations and not gifts that came directly from the company.

The following are the companies that declined to provide any financial information about their philanthropy to The Chronicle:

Albertson’s (Boise, Idaho) American Home Products Corporation (Madison, N.J.) American International Group (New York) American Stores Company (Salt Lake City) Anheuser-Busch Companies (St. Louis) Banc One Corporation (Columbus, Ohio) Bergen Brunswig Corporation (Orange, Cal.) Cardinal Health (Dublin, Ohio) Coca-Cola Enterprises (Atlanta) Columbia/HCA Healthcare Corporation (Nashville) Costco Companies (Issaquah, Wash.) CSX Corporation (Richmond, Va.) CVS Corporation (Woonsocket, R.I.) Dell Computer Corporation (Round Rock, Tex.) Walt Disney Company (Burbank, Cal.) Duke Energy Corporation (Charlotte, N.C.) Emerson Electric Company (St. Louis) FDX (Memphis) Fleming Companies (Oklahoma City) IBP (Dakota City, Neb.) Ingram Micro (Santa Ana, Cal.) Kimberly-Clark Corporation (Irving, Tex.) Lehman Brothers Holdings (New York) Morgan Stanley, Dean Witter, Discover & Company (New York) Nationsbank Corporation (Charlotte, N.C.) NGC Corporation (Houston) RJR Nabisco Holdings Corporation (New York) Safeway (Pleasanton, Cal.) SBC Communications (San Antonio) Southern Company (Atlanta) Sysco Corporation (Houston) TIAA-CREF (New York) Time Warner (New York) Tosco Corporation (Stamford, Conn.) Toys R Us (Rochelle Park, N.J.) United HealthCare Corporation (Minnetonka, Minn.) Viacom (New York) Walgreen Company (Deerfield, Ill.) Winn-Dixie Stores (Jacksonville, Fla.)