US Corporate Giving Stagnates in America But Increases Abroad
BOSTON — UNITED States corporations with global operations are feeling generous. Their charitable contributions to nonprofit institutions overseas are on the rise.
Within the US, however, charitable giving by American companies is expected to remain stagnant through 1994, according to an annual survey on corporate contributions.
The survey of 371 large and medium-sized firms in manufacturing and service industries was sponsored by the Conference Board, a business research organization, and the Council for Aid to Education, both in New York.
Analysts say the recession, coupled with extensive corporate restructuring, is a drag on corporate giving. Fewer corporations are being established today than 10 years ago, which also hampers donations, says Maria Buenaventura, a research analyst at The Conference Board and author of the report.
Heightened sales and profits overseas, however, have led US companies to increase contributions to nonprofit organizations abroad. Overseas contributions increased by 36 percent from $431,500 in 1991 to $588,516 in 1992, the survey found.
``More companies are becoming global in their business scope, so they're getting an increasingly large share of their revenues and profits from abroad,'' Ms. Buenaventura says. ``That's encouraging them to be involved in these countries and communities where they have their operations.''
Most international corporate giving is concentrated in Western Europe and Canada, according to ``Giving USA,'' a report on philanthropy by the American Association for Fund-Raising Council Trust for Philanthropy in New York. US companies also make considerable contributions to Japanese philanthropies, notably those involved in the arts, scientific research, human service activities, and sporting events, the report says.
IBM's Japanese subsidiary gave $14 million to Japanese charitable causes in 1990; American Express gives more than $1 million a year in Japan; Coca-Cola gives $5 million annually; Eastman Kodak Company and Du Pont are also active donors in Japan, the report says.
Foreign companies that do business in the US contribute to American charities as well. Japanese companies, for instance, gave more than $300 million in 1991; and Japanese giving in the US was 10 times greater in that year than in 1987, the report says.
The majority of nonprofit organizations in the US have not been affected by the stagnant rate of corporate donations, since corporate giving constitutes only 4.8 percent ($6 billion in 1992) of all charitable contributions, says Ann Kaplan, editor of ``Giving USA.'' ``Where I would expect [there] to be some impact would be in higher education, because [universities] are very dependent on corporate giving,'' Ms. Kaplan says. The largest portion (34.9 percent) of corporate donations are allotted to institutions of higher education, according to ``Giving USA.'' Hospitals and arts programs also depend heavily on corporate donors, she says.
About 300 of the top US corporations account for almost one-half of corporate charitable contributions in the US, Kaplan says. Since 1987, companies have given about 1.6 percent of their pre-tax profits to charities a year. Giving, however, is not inextricably linked to company profits, she says. IBM, for example, contributes more to nonprofits than any other company in the US despite financial trouble, Kaplan says.
Future projections are driven by the economy. ``There will probably be a slight increase [in corporate contributions] in the later '90s if the economy continues to improve,'' Buenaventura says. ``It's all relative to how the companies perform.''