How The Chronicle’s Annual Survey on Corporate Giving Was Conducted

The Chronicle‘s survey of corporate giving offers a glimpse into the state of philanthropy at many of the nation’s largest businesses. The survey is based on information provided by companies ranked according to their annual revenue in Fortune magazine’s annual Fortune 500.

The 150 largest companies in the Fortune 500 were asked to provide figures on their charitable giving in 1999, 2000, and 2001. Information was ultimately obtained from 96 companies in that group: Either the company filled out a Chronicle questionnaire or the Chronicle obtained a copy of the company foundation’s fiscal year 2000 Form 990-PF, the publicly available informational tax return filed with the Internal Revenue Service.

While federal law makes the foundation tax returns open to the public, businesses are not otherwise legally required to disclose details about their corporate philanthropy. The unwillingness of many companies to provide this information makes it difficult to get a complete picture of corporate giving at the nation’s top companies.

The 54 businesses that refused to provide information offered a variety of reasons for not participating. Goldman Sachs Group said it was working on its reporting methods and did not think that it could provide comparable data from year to year. Kmart Corporation said it would not participate because it could not gather all the information requested. The company, which in the past has made contributions from both a corporate-giving program and from the Kmart Family Foundation, said it is in the process of closing its foundation. Rite Aid Corporation has suspended giving while it deals with financial difficulties.

Others said that they were unable to pull together data because they do not have a centralized giving program, with charitable donations instead being handled independently by each local business unit. Several companies said that company policy prohibits them from disclosing information about their giving or that they receive too many requests for data and don’t have time to fill them all. Some companies simply refused to respond to repeated requests and did not give a reason for declining to participate.

Not included in this year’s survey was AOL Time Warner, which was formed by the merger of America Online and Time Warner. Because the merger occurred after the close of the companies’ 2000 fiscal years, the combined company was not included among Fortune magazine’s 150 largest companies.

Donations of Products

In the Chronicle survey, companies were asked to include donations of cash and products from the entire business, including subsidiaries, and for all gifts to charities in the United States and abroad.

The survey represents only a portion of corporate charity. For example, the survey does not take into account paid time off that some companies give their employees so they may volunteer at charities, or money raised by the employees themselves. Neither does the survey reflect donations of in-kind gifts other than products a company manufactures and sells. For example, Washington Mutual, a financial institution in Seattle, donated $19.8-million in office supplies and other in-kind gifts in 2000, but because those products are not manufactured by the company itself, the survey does not take those gifts into account.

Year-to-Year View

Readers should be cautious about making comparisons between companies and from year to year. In some cases, a company’s philanthropy may appear to fluctuate when, in fact, an increase may be due to a company’s failure to spend its entire charity budget one year and carrying those dollars forward to the following year. In other cases, a company’s giving may decrease because it made a big, multiple-year grant that it reports in its giving budget one year and not the next. Some companies may not have reported complete giving numbers because they cannot track how much their affiliates give or how much they give in products or cash, which can make it difficult to compare one company to another.

A change in how giving budgets are reported may also cause a fluctuation. Mergers and acquisitions can also make year-to-year comparisons difficult as the new company reconciles two formerly independent giving programs.

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. Some companies base their giving on an average of profits over several years. Others have had wild fluctuations in profitability from year to year — sometimes because of business conditions and sometimes because of the costs associated with mergers — while trying to keep charitable donations stable.

In addition, businesses support charities through a variety of means other than tax-deductible gifts of cash and products. Some companies may offer low-interest loans, for example. Others may give money to nonprofit groups through the companies’ marketing or research divisions, negotiating deals that may help the companies test new products or gain endorsements from charities. Those deals are not counted in a company’s charity budget.

Following are the companies that declined to provide any financial information about their philanthropy to The Chronicle: Abbott Laboratories (Abbott Park, Ill.)
Albertson’s (Boise, Idaho)
American Home Products Corporation (Madison, N.J.)
American International Group (New York)
Bergen Brunswig Corporation (Orange, Calif.)
Berkshire Hathaway (Omaha)
Cardinal Health (Dublin, Ohio)
Cisco Systems (San Jose, Calif.)
Costco Wholesale Corporation (Issaquah, Wash.)
CVS Corporation (Woonsocket, R.I.)
Deere & Company (Moline, Ill.)
Delphi Automotive Systems Corporation (Troy, Mich.)
Delta Air Lines (Atlanta)
El Paso Energy Corporation (Houston)
FedEx Corporation (Memphis)
Fleming Companies (Lewisville, Tex.)
Gap Inc. (San Francisco)
Goldman Sachs Group (New York)
Halliburton Company (Dallas)
Hartford Financial Services Group (Hartford, Conn.)
HCAThe Healthcare Company (Nashville)
Honeywell International Inc. (Morristown, N.J.)
IBP Inc. (Dakota Dunes, S.D.)
Ingram Micro (Santa Ana, Calif.)
Kmart Corporation (Troy, Mich.)
Lear Corporation (Southfield, Mich.)
Lehman Brothers Holdings Inc. (New York)
Liberty Mutual Insurance Company (Boston)
Loews Corporation (New York)
May Department Stores Company (St. Louis)
McDonald’s Corporation (Oak Brook, Ill.)
Motorola (Schaumburg, Ill.)
PepsiCo (Purchase, N.Y.)
Pharmacia Corporation (Peapack, N.J.)
Publix Super Markets (Lakeland, Fla.)
Reliant Energy Inc. (Houston)
Rite Aid Corporation (Camp Hill, Pa.)
Safeway Inc. (Pleasanton, Calif.)
Solectron Corporation (Milpitas, Calif.)
Supervalu (Eden Prairie, Minn.)
Sysco Corporation (Houston)
Teachers Insurance and Annuity AssociationCollege Retirement Equities Fund (New York)
Tech Data Corporation (Clearwater, Fla.)
Tosco Corporation (Old Greenwich, Conn.)
TXU Corporation (Dallas)
Ultramar Diamond Shamrock Corporation (San Antonio)
United Technologies Corporation (Hartford, Conn.)
UnitedHealth Group (Minnetonka, Minn.)
UtiliCorp United Inc. (Kansas City, Mo.)
Valero Energy Corporation (San Antonio)
Viacom Inc. (New York)
Walgreen Company (Deerfield, Ill.)
Walt Disney Company (Burbank, Calif.)
Winn-Dixie Stores Inc. (Jacksonville, Fla.)

The Chronicle‘s survey was conducted under the direction of Martha Voelz, with help from Debra E. Blum and Marni D. Larose.