A Former Insider’s Crusade to Transform Thinking About Corporate Giving

Soon after he turned 55 last year, Curt Weeden realized that if he really believed in his work, he had to quit his job.

Mr. Weeden, who since 1990 had been vice-president for corporate giving at Johnson & Johnson, left his comfortable post last month. He has begun what he admits could be a difficult crusade to demonstrate that effective giving programs bolster companies’ bottom lines — and that America’s businesses should increase their giving by at least $3-billion a year.

“The challenge is to get businesses — especially large, megabusinesses — thinking differently so that they’re investing their dollars in the way that they can defend to a shareholder,” says Mr. Weeden, who was a corporate-giving consultant to several Fortune 500 companies before joining Johnson & Johnson. “If you’re giving buckets of money away to further your own personal charitable interests, rather than the company’s, that’s just not kosher.”

Mr. Weeden says that although his bosses at Johnson & Johnson understood the importance of philanthropy to business objectives, too few of his peers in corporate philanthropy have succeeded in making that case to company executives. He says that failure is why more and more shareholders have questioned the value of corporate giving — and why a proposal is pending in Congress that would give more control over donations to shareholders.

The problem, as Mr. Weeden sees it, is that while corporate philanthropy has given lip service to the idea of tying giving to business goals, it hasn’t succeeded in making the practice widespread. Nor, he believes, have corporate-giving executives done a very good job of demonstrating to chief executives, shareholders, or Wall Street analysts that their grants are not a form of charity but a real investment in American society that can also translate into bigger corporate profits.

To show business leaders how they can better align their giving with corporate goals, Mr. Weeden has written a handbook, Corporate Social Investment, which will be published by Berrett-Koehler Publishers in August. He has also founded a continuing-education institute for corporate-giving professionals, which is designed to equip them with the business skills he believes too many lack.

“This is something I wanted to do before I closed my career,” says Mr. Weeden. “I turned 55 last year and I thought, Jeez, I’ve got 10 years — knock on wood — to do something. If I don’t do it now, I never will.”

In his quest to improve corporate philanthropy, Mr. Weeden has injected himself into a contentious debate among Washington policy makers about how businesses should conduct their giving operations. The Securities and Exchange Commission is now reviewing Mr. Weeden’s book as it works on an analysis of legislation by Rep. Paul Gillmor, an Ohio Republican, that would force publicly held businesses to give shareholders a say in corporate-giving decisions. The commission has received numerous letters urging it to cite Mr. Weeden’s ideas in a report on the proposal that it will submit to Congress.

In his book, Mr. Weeden offers a 10-step prescription for curing what he says is wrong with corporate philanthropy.

Chief among the problems, he says, is that giving should be increasing faster — especially since many companies are seeing soaring profits and many non-profit groups have suffered from government cuts.

Last year companies gave just 1.1 per cent of their profits, or $8.2-billion, to charity, according to Giving USA, an annual report on philanthropy. That is a serious weakening in support for philanthropy from 1986, when businesses gave 2.3 per cent of their pre-tax profits to charity, Mr. Weeden says.

Mr. Weeden believes that companies should provide charities with at least 2.5 per cent of their pre-tax income, based on average income from the three preceding fiscal years. Manufacturing companies that give mostly product donations should make sure the value of the items they give away, plus cash gifts, equals at least 3.5 per cent.

That goal may seem ambitious, but Mr. Weeden says many companies are closer to that objective than they realize. Mr. Weeden argues that companies do themselves a disservice by underreporting the amount they give to non-profit groups through means other than charitable donations. He notes that many companies spend millions of dollars on marketing deals with charities, fees for research from non-profit science centers, salaries for their corporate-giving officers, and other expenses that help charities.

“We have so underestimated what companies are doing now in this field, it’s pathetic,” he says.

He says companies don’t report the other spending largely because businesses traditionally have only reported strict charitable gifts. “Companies are like sheep — they all follow each other,” says Mr. Weeden. “Unless some begin changing the way they report their support, none of them will.”

From what he has measured at Johnson & Johnson and what he has seen at other large companies, Mr. Weeden estimates that businesses spend up to 50 per cent more on charities than they report.

While some observers may question whether expenses such as salaries should count as corporate support of charity, Mr. Weeden points out that charitable foundations can count much of their spending on salaries and other administrative costs when they calculate whether they have complied with federal requirements to pay out at least 5 per cent of their assets each year. He says he doesn’t understand why businesses cannot do the same.

Even if companies adjust their calculations, however, Mr. Weeden still argues that corporate contributions to charities would fall short of his recommendation — by at least $3-billion a year.

Once companies have wrestled with the decision about how much to give, Mr. Weeden urges them to disclose that amount to the public. Shareholders, charities, and others should not be in the dark about how much is given away and how much they spend on salaries, marketing deals with charities, and other such items, he says. (By law, the only contributions that companies are required to disclose are those made through their charitable foundations.)

Not only should the amount spent be disclosed, but companies should make a public statement clearly explaining that business goals motivate their giving, he says. Being clear about how the decisions are made, says Mr. Weeden, will make it less likely that shareholders will question donations. What’s more, he says, charities will benefit because they will no longer have to guess about what kind of projects a company will support or how much it can give.

In his book, Mr. Weeden beseeches corporate leaders to realize that corporate giving can help do more than just attract new customers; it can also help in less obvious ways, such as aiding businesses in making their case to policy makers.

During his years at Johnson & Johnson, Mr. Weeden recalls, he helped create an award for public-health charities as part of a strategy to smooth the way for the pharmaceutical company’s lobbyists to gain access to U.S. representatives and senators.

Each year, Mr. Weeden says, the program selects regions of the United States that are home to key political leaders whom Johnson & Johnson hopes to influence. Then it encourages charities in that area to compete for awards that will provide each winner with $100,000 over two years.

The award recipients are chosen by an independent panel. “That’s important since the company doesn’t want the credibility of the award to be tarnished,” he writes in his book. The winners are offered a bonus $2,500 grant if they organize a local awards event. Those that do so receive an instruction booklet that encourages them to include legislative representatives in their ceremonies.

Since 1986, senators, representatives, mayors, and “even a politician named Bill Clinton,” Mr. Weeden writes, have attended ceremonies.

An American Medical Association official familiar with the awards program told Mr. Weeden that “it’s the most powerful example he’s ever seen of how an organization can score points in Washington.”

“The corporation knows that a Crystal Award ceremony won’t brainwash a legislator,” he writes. “But it has discovered that the local award ceremonies lessen the chances that the corporation is going to feel like Rodney Dangerfield when it visits a lawmaker.”

Few government officials or charity leaders have seen Mr. Weeden’s book yet, but many are likely to be troubled by his case for such self-interested philanthropy.

Mr. Weeden defends himself against potential charges, saying that many gifts can both help the company and help society.

“Why does an organization choose to make a gift to a specific organization? Why does an individual make that decision? Generally, there’s some relationship to you as an individual — your family or your college or whatever it is. In the case of a corporation, you have to make that corporation into an individual and start thinking about that corporation as a person who’s making those same kinds of judgments.”

To train more corporate-giving leaders to learn how to make those judgments, Mr. Weeden has high hopes that his newly created Corporate Contributions Management Academy, in Palm Coast, Fla., will provide a crash M.B.A. course.

“There’s a ‘learn by the seat of the pants’ approach now,” he says. “I want to create a new ‘professionalism’ for corporate giving, rather than the hodgepodge mix found now.”

The academy will offer four-day seminars, run over weekends, once a month beginning in October. Mr. Weeden will teach, along with Gerald Horton, former chairman of Ogilvy & Mather Public Relations Group. They will be joined by specialists in accounting, tax law, social policy, and business.

Mr. Weeden says students will be trained “to think about contributions as a business resource, not as a cash drain on their company. We’ll turn the whole mentality around.”

Companies, including General Mills, Glaxo Wellcome, and Toyota Motor Sales U.S.A., have already signed up to send managers to the seminar.

Mr. Weeden says he sees those companies’ interest as a sign that “there’s an enormous reservoir of pent-up energy that could be channeled in different ways through non-profit partnerships to really make a difference to society.”

“But,” he says, “if we try to tap into that reservoir and energy using the traditional means of philanthropy, we’re really only going to get bits and pieces of it. We won’t get the total flow.”