Companies’ Charitable Gifts Follow Their Revenue and Go Overseas

Before 1996, less than 1 per cent of the Eastman Kodak Company’s charitable gifts went to organizations overseas.

ALSO SEE:

Charitable Giving at 91 Major Corporations: View list, additional charts, and related articles

This year, the Rochester, N.Y., company, which sells film worldwide, expects to give away as much as $1.4-million in other countries, or 12 per cent of its $12-million gifts budget.

Two years ago, the oil-producer Texaco spent $3.2-million on philanthropy abroad, representing about 18 per cent of its total giving budget. This year, the company plans to spend as much as $7-million on international grants, or more than one-quarter of its charity budget.

In devoting a growing portion of their charitable dollars to organizations abroad, Eastman Kodak and Texaco are representative of many of America’s biggest companies. International giving is flourishing, observers say, because companies are tailoring their giving programs to more closely fit their business operations, which are increasingly likely to include plants, offices, employees, and customers overseas.

“As revenue streams shift internationally, so does philanthropy,” says Kiernan Murray, manager of the Texaco Foundation. Mr. Murray notes that Texaco operates in more than 150 countries and has many joint ventures with companies around the world. Last year, at least half of the company’s revenue came from outside the United States.

Other companies in the Chronicle survey of the nation’s biggest corporations are significantly increasing their commitment to overseas giving, and some are giving internationally for the first time. Among them:

Microsoft. The Seattle computer-software company is making its first-ever overseas grants this year, setting aside $2.5-million for such gifts out of a total cash giving budget of $26-million. Among the grants: $150,000 to a non-profit group in Brazil that helps people in poor neighborhoods gain access to computers. In addition, Microsoft’s subsidiary in Brazil is donating software valued at $4.5-million to the charity and is arranging for employees to volunteer their time to help train computer teachers.

Pfizer. The pharmaceutical giant last fall made its largest-ever overseas gift — $60-million worth of medication over two years to treat and prevent eye disease in five countries. Pfizer also pledged $3-million in cash to help fight the disease trachoma, which has blinded six million people in developing countries.

TRW. The Cleveland company, which manufactures parts for the automotive, space, defense, and telecommunications industries, is stepping up its international gifts as the company continues to expand abroad. TRW, which this year bought a British car-parts company, plans to give away $250,000 overseas — more than three times what it did last year.

In addition to the money earmarked for international grants, the company spends money abroad through some of its domestic grant programs. For example, this year the company is taking to Mexico its arts-education program, called Start Smart, which trains teachers to use arts in the classroom.

Linda B. Gornitsky, a consultant to corporations who has studied businesses’ contributions overseas, says that while more and more companies are sending some of their charitable dollars abroad, she expects international-giving programs to grow slowly.

Corporations that give abroad, she says, can run into a multitude of challenges and dilemmas.

“You have to communicate through different time zones, deal with local currencies versus U.S. currency, decide if things will be managed locally or internationally, make sure you’re not violating cultural norms, and do the paperwork to get the tax deduction,” she says.

A recent gift from Bristol-Myers Squibb Company, a New York drug maker, to help African women and children afflicted with the AIDS virus was snubbed by officials in the South African government who said that the company’s plans for the gift weren’t in line with national health policies.

In May, Bristol-Myers announced that it would spend $100-million over five years — in Botswana, Lesotho, Namibia, South Africa, and Swaziland — on research, medical training, and education and support for women and children infected with the AIDS virus.

But South Africa’s health minister — who last month became the country’s foreign-affairs minister — expressed concern that the company’s program did not meet the country’s needs and said it was unacceptable to the government. Among other problems, according to the minister: It did not make sense for South African doctors to be sent to the United States for training — as Bristol-Myers’s plan calls for — when they could gain more-relevant experience by visiting other African nations.

Jon Weisberg, director of international public affairs for Bristol-Myers, says that since the concerns were raised, the company has shifted its plans to allow for more African physicians to be trained in Africa. Forty-five of the 55 doctors to begin training next month, he says, will stay in Africa. The company and government officials also are planning a two-day workshop this month to discuss how the program might be run.

To avoid some of the hassles of grant making abroad, some companies donate to American charities that work overseas and suggest that the money be used for specific projects in areas of the world where the company does business. A growing number of businesses are also turning to organizations that act as a sort of gifts broker.

United Way International, for example, has what it calls its Donor Advised Gift Program. Companies give money to the program and make recommendations for the money’s use. United Way International works closely with the donor companies but makes the final decision on all donations and takes care of all the logistics.

In 1997, United Way International managed $30,000 in its donor-advised program. This year, it expects to manage $1.4-million.

“We are working with a lot more companies because they are pushing the idea of giving abroad,” says Gregory Berzonsky, program director at United Way International. “Companies are looking at their programs and seeing that they should be thinking as globally with their philanthropy as they do with the rest of their business.”