Corporate Crusaders

Dec. 21, 2004
Employees with a cause help curtail crime, foster culture, and improve communities worldwide.
"Not everything that can be counted counts, and not everything that counts can be counted." When Albert Einstein crafted this aphorism, he probably wasn't thinking about business, but his words capture the challenge of today's corporate crusaders. Good citizenship by business would cease to exist without its unsung heroes. While their boards and bosses bellow for better returns, human-resources managers, plant engineers, marketing directors, and CEOs make time to train teachers, help local theater groups balance their books, find ways to reduce crime, and try to come up with money to fund all of these initiatives. Along the way they face hurdles: mergers and acquisitions, legal issues, and apathy among busy, overworked employees. Sometimes the challenges are as simple as where to allocate their citizenship dollars. "What are the right financial-support levels? What hours should people spend on these kinds of activities? These are the common areas that we all face," observes Curtis (Hank) Barnette, chairman and CEO of Bethlehem Steel Corp., Bethlehem, Pa. Of course, business reasons exist for companies to be good citizens. They include improved reputation, increased sales, and a workforce morale boost, but behind all of these benefits are the corporate crusaders. "They are the engines that make philanthropy happen, and companies are finding that causes unlock the power association between employees and their corporations," observes Reynold Levy, former AT&T Foundation president and author of Give and Take: A Candid Account of Corporate Philanthropy (1999, Harvard Business School Press). In an effort to address the conundrum first articulated by Einstein, employees with a cause have devised handy new tools. They include sophisticated surveys and other measurement techniques to help to show the value of civic projects. They turn to technology to garner resources. For example, during the resettlement of the Bosnian refugees, many of AT&T's 100,000 employees learned about volunteer opportunities and a need for clothing and cash donations through the corporation's daily electronic news bulletin, "AT&T Today." Crusaders also promote links between charitable projects and critical corporate functions. A desire to retain employees prompted several manufacturers headquartered in economically troubled and often crime-ridden areas to improve their communities instead of fleeing, relates Steve Rochlin, director of research and policy development at the Boston College Center for Corporate Community Relations, which studies corporate citizenship. "These companies realize they'll ultimately face the same issues wherever they move, so they've responded with grass-roots efforts to improve the situation," he explains. Such reasoning fostered Eaton Corp.'s Navy Controls Div. F-NET initiative. The division introduced the unpaid, 14-week program designed to bring welfare recipients and others into meaningful jobs because it wanted to positively impact the largely minority community in which the division is located in Milwaukee. Every merger or acquisition announcement sends chills through nonprofit communities. These corporate combinations portend poorly for the schools, museums, crime-prevention projects, and other charitable causes to which companies donate time, money, and equipment. Usually mergers and acquisitions result in smaller cash or equipment gifts to communities. Shortly after Gillette Co. acquired Duracell in 1996, for example, Gillette slashed the battery manufacturer's contributions-program budget by more than half. A few exceptions exist to the rule that M&A activity curbs citizenship. When Minneapolis-based Honeywell Inc. announced that it planned to merge with AlliedSignal Inc., Morristown, N.J., Honeywell CEO Michael Bonsignore made a pledge to the Twin Cities. His company would not abandon its support of Minnesota HEALS -- a partnership of some 60 companies, government agencies, and community groups aimed at combating crime and improving the area's quality of life. Other forces make life hard for corporate citizens. With its focus on short-term improved earnings, Wall Street considers anything that doesn't measurably contribute to buoyed returns a drain. For the growing number of CEOs with pay linked to stock options, little short-term incentive exists to, say, adopt a classroom or sponsor an art exhibition. "There definitely is a drive to make companies more profitable, and one consequence could be less attention paid and less money given to philanthropy," suggests James E. Heard, CEO of research and advisory services at the Proxy Monitor Inc. Legal considerations are forcing certain companies to change the way they promote their relationships with charities. In April more than a dozen attorneys general issued a statement of concern about alleged false advertising and other legal issues involving marketing arrangements between corporations and nonprofit organizations. Particularly disturbed by recent advertising agreements covering prescription drugs, the officials called for full disclosure of the nature of licensing deals. The attorneys general also would like to curtail what they see as misleading exclusive endorsements. Already leading companies are distancing themselves from such confusing deals, believes Mark Feldman, a senior vice president for Cone Inc., the Boston market research firm that in March released a five-year study on cause marketing. "What we see happening is that companies are moving away from licensing agreements to cause branding as a reflection of their deep, integrated commitment to a cause or nonprofit over a long period of time," he explains. One such example is Bethlehem Steel's multiyear commitment to build a museum celebrating an era in American manufacturing. Inside companies, corporate crusaders face reluctance from busy employees who want to spend their own time and money on projects of their choice. David Osowiski, director of community relations for United Technologies Corp.'s Research Center in East Hartford, Conn., easily signed up junior employees as volunteers for projects, but failed to interest their bosses. He decided that if he couldn't garner support from middle management, he would target the top. He aimed for John Cassidy, the head of the research division, who refused to meet with Osowiski before seeing proof of the success of the citizenship initiatives. Osowiski organized a survey of the local community to show the goodwill generated by the research division's 38 civic projects, including training 500 public-school teachers and administrators to use the Internet. It took two years, but finally the growing numbers of employee volunteers -- a 150% increase from 1995 to 1998 -- caught Cassidy's attention. "Once I got his interest, a few middle managers noticed and began to participate, and they bring their colleagues," explains Osowiski. Thanks to passion and determination of corporate crusaders such as Osowiski, business contributions are climbing, despite hurdles. Business giving, which includes cash and product donations, increased 9% to $8.97 billion in 1998 from $8.2 billion a year earlier, finds Giving USA, an annual survey by the AAFRC Trust for Philanthropy, New York. The 1998 figure represents 1% of corporate pretax income. Outside the U.S., corporate crusaders are pushing their companies into good works. In Europe, employee involvement has taken off faster than cash involvement, reports David Logan, who heads the Corporate Citizenship Company in London. In the UK, beverage manufacturer Diageo PLC is lauded for initiatives to promote responsible drinking and for its community-assignments program, which pairs senior staff with local organizations for a year's worth of intensive collaboration. In Hitachi City, Japan, current and former executives of Hitachi Ltd. continue to subsidize two family education centers despite the company's record losses in 1998. And in So Paulo, Brazil, cosmetics manufacturer Natura Cosmticos SA has stepped into an especially controversial issue. The "Jornadas Pedaggica" project focuses on training teachers in start-up schools in resettlement areas. From So Paulo to Hitachi City to Milwaukee and Minneapolis/St. Paul, corporate crusaders are working to improve society. Their missions may differ, but their projects share common themes. Each requires vision, creativity, and-most important in the fast-changing business world of mergers and acquisitions and relentless focus on profits-perseverance.

Popular Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!