Previously Posted News

Bank of America Posts Major Income Drop

Bank of America Posts Income Drop

October 18, 2007: We're not in the habit of posting business losses and upswings on this webpage, but Bank of America, the second largest bank in the US, and one of the most capable and generous corporate givers in the US, recently posted a 32% drop in quarterly earnings and reported that credit-loss provisions nearly doubled from last year to this year.

What will this mean for the bank's corporate and foundation giving? The real answer: We don't know for sure.

But we do know something about the business side effects. Typically, losses of this size send tremors throughout the bank (or any major business entity) that affects everyone from the CEO to vendors to tellers.

Since loss reports like this negatively effect the company's stock value and since a CEO's business value is generally tied to the company's share price, this news will make Bank of America CEO and Chair Kenneth Lewis very squeamish. And in major corporations, when the CEO ain't happy, ain't nobody happy.

Expansions that aren't already in deep in the pipeline will stall or be pulled back for several years. Entry into new markets will be delayed or cut back in scale, and any new initiatives -- no matter where in the bank -- that are not directly related to sales, will be stopped, sliced or just put on hold for the time being.

The Philanthropy Angle The Bank of America Foundation is partially endowed ($41 million in assets, $103 million in giving during the last reporting period), so standing grants, and regular grants probably won't be substantially effected.

However, new grants, increases in standing grants, and philanthropic expansions into new markets will probably be put on hold. After all, it looks bad to employees when companies increase giving, but curtail raises and bonuses.

The Good News. Although it's late in the day, this may be the time to approach Bank of America's various marketing and sponsorship departments.

In manufacturing, a downturn generally results in cutting back the production staff and increasing the sales staff. Although banks haven't quite picked up on this equation yet, most bank managers do know that it behooves them to increase sales (new deposits, new loans etc).

If you have a REAL opportunity to increase exposure and sales for Bank of America, this is the time to pitch it to the bank manager or local marketing folks. But you might want to slip that request for an increased annual giving amount back in your bottom desk drawer for now.

Carnegie Corporation Realigns... Again

Carnegie Corporation Realigns... Again

October, 2007…The venerable Carnegie Corporation of New York announced that it is shifting its funding areas again, the fourth configuration in seven years. While the changes are primarily in how the foundation organizes its work and staff responsibilities, a few funding areas from the past will be eliminated and others will be down-graded to “other interests.”

Since its last major realignment in 2002, the Corporation has had six primary interests areas: 1) Education (especially higher education, adolescent literacy and urban education reform), 2) International Development (especially in Sub-Sahara Africa), 3) International Peace and Security (especially nuclear/biological weapons and US-Russian cooperation, 4) Strengthening US Democracy (especially nonprofit development, voting rights, civil rights and campaign finance reform), 5) Carnegie Scholars (especially new academics specializing in Islamic studies) and 6) Strengthening African Universities.

The Corporation’s new interests will be simplified into two areas: 1) International and 2) National.

According to the Corporation’s press release “International Program grants will focus on reducing direct threats to international peace and security while also investing in international development by supporting institutions and individuals in sub-Saharan Africa and Eurasia, two regions of long-standing Corporation involvement”.

The fund will end its support for nonproliferation efforts for biological weapons and Russian higher education. One new area the foundation plans to support in a larger way is efforts to understand the Islamic religion, Muslim nations, and American Muslims.

On the other side, “The National Program will support the revitalization of democracy by funding new pathways both to educational and economic opportunity; and to citizenship, civic participation and integration in a pluralistic society. The Fund will focus on integrating immigrants into U.S. culture and society.”

However, the Corporation will end its program in campaign finance reform and will refocus its program in adolescent literacy.

The Corporation is also adding a new initiative in journalism education “to help reporters build specialized expertise that will enhance coverage of complex subjects, understand the languages and cultures of distant parts of the world and appreciate the ethical dimensions of their work.”

Carnegie is also adding a new position to its staff ”to manage the foundation's continuous assessment of its programs and to further instill a culture of accountability across the organization.”. In other words, ongoing program and interest area changes will be the full-time job of one of the Corporation’s senior officers.

This is the third major realignment in seven years for Carnegie. The Corporation announced major program changes in 1999, and then again just prior to the September 11, 2001 catastrophe. After 9-11, the Corporation discarded its 2001 initiative plans and established a new set of initiatives, developing more focus on the Islamic world and on international security.

During the last five years, the grantmaker’s initiatives have remained fairly stable with some interesting new initiatives in U.S. nonprofit infrastructure, especially in the areas of increasing nonprofit accountability, transparency, and coalition-building.

The Big Picture: Foundation program, procedure, and interest area changes are a constant in the grantmaking world. During tough economic times, endowed grantmakers must realign their priorities to shelter their long-term partnerships and at the same time, address the economic fallout on economically and socially disadvantaged people.

During strong economic times, foundations take the opportunity to experiment with new funding strategies, incorporate new grantmaking procedures, and incorporate new funding priorities.

Because of changes in corporate management, business interests, business structures, and a corporate model that encourages rapid changes in unsuccessful ventures; corporate grantmaking is even more prone to shifting grantmaking initiatives than private independent foundations.

Since both corporate and independent grantmakers are supposed to be on the research and development end of their respective fields, experimenting with new solutions, creating new partnerships, and mounting new grantmaking procedures are typically welcomed by other foundations and foundation observers.

However, for some grantseekers, especially those without the financial or personnel resources to quickly shift their program areas or development areas to address grantmakers’ new interests and procedures, grantmakers’ changes can be fatiguing, and sometimes detrimental to long-standing program interests.

Whether a necessary evil or a sign of a healthy industry, grantmaking changes are a constant.

Trendspotting: The Carnegie changes are by no means unique. Both the Rockefeller and Gates foundations also shifted program areas during the past year and the Ford Foundation's new CEO is expected to announce major changes at his foundation by the end of 2008.

Helen Walton Dies, Leaving $16 billion to Walton Family Foundation

April 30 2007 -- Helen Walton dies, leaving an anticipated $16 billion to the Walton Family Foundation

With this anticipated gift, the Walton Family Foundation will have more than $18 billion in assets and become the second largest foundation in America.

Helen Walton Dies, Leaving $16 billion to Walton Family Foundation

April 30 2007 -- Helen Walton dies, leaving an anticipated $16 billion to the Walton Family Foundation

Sixty-five years ago, Sam and Helen Walton met in a bowling alley in Claremore, Oklahoma; a few months later, they were married -- on Valentine’s Day in 1943. Sam, the founder of the Wal-Mart empire died fifteen years ago and last week, Helen died, leaving behind $16.4 billion gift to the Walton Family Foundation that may forever change Arkansas and public education in America.

With this anticipated gift, the Walton Family Foundation will have more than $18 billion in assets and become the second largest foundation in America, well behind the $60 billion in assets held by Bill and Melinda Gates Foundation; slightly ahead of the Howard Hughes Medical Institute’s $16 billion in assets; and well ahead of the Ford Foundation’s $12 billion; and the Getty Trust, Robert Wood Johnson Foundation and Shriners Hospital Trust’s $10 billion in assets.

Currently the foundation annually awards nearly 1,000 grants worth $158 million, three fourths of which is directed to education and education reform. Nearly one-fourth goes directly to K-12 schools (mostly charter and private schools); one-fourth to colleges and scholarship programs; and one-fourth to a variety of school reform programs, such as school choice and school voucher programs, public policy institutes (e.g., Manhattan Institute and the Goldwater Institute), and other K-12 reform programs, such as American Education Reform Council, the Center for Education Reform, Children's Scholarship Fund, Colorado League of Charter Schools, and the Florida School Choice Fund.

Helen and Sam’s surviving children, Rob, Alice, and Jim (John died in an airplane crash a couple years back) will have control of the foundation and could alter the grantmaking focus of the Walton Family Foundation. Some heirs of wealthy foundation founders do -- for example, the Annenberg, Koret, and James R. Thorpe foundations.

Odds are the Walton heirs will continue their parents’ legacy of supporting college scholarship programs, environmental efforts, mainstream charities in the Arkansas/ Mississippi Delta area, and most significantly, support for public education “reform.”

However, even before their mother's death, the heirs were moving the foundation in a different direction – they are much more nationally-focused and much more politically oriented than their parents. While Sam and Helen believed in the value of competition, school choice and no unions, most of their personal philanthropy was focused on civic life in Arkansas, Texas, Mississippi, Oklahoma, and other southeastern states.

Once the children became actively involved in the Foundation's during the early 1990s, the foundation moved dramatically towards a national school reform agenda. Currently, the foundation awards only 25% of funding in Arkansas, but millions to national policy centers and to states where the charter school movement is healthy and supported by state government, such as Minnesota and Colorado.

According to some foundation observers, the Foundation is interested in charter schools because it owns nearly 250,000 shares in Tesseract, a for-profit charter school development corporation. Others believe the commitment to charter schools is part of a long-term strategy to break unions, especially teachers and other public service employee unions.

Still others believe the foundation’s public school reform agenda is simply an extension of Sam Walton’s small town upbringing and his belief that competition works well as a tool of reform, including reform of public education.

Under Helen’s leadership, the foundation’s grants pool remained diverse. In addition to hundreds of “school reform” groups, the foundation also awards several grants to public schools, African American and Hispanic schools, and public school support organizations. The foundation also awards many grants for non-education groups; such as Planned Parenthood, heart and cancer groups, national youth groups, national social service organizations, arts centers, and a few local environment groups.

These smaller grantmaking objectives will probably remain largely intact. The heirs and their children still have a strong commitment to the region and to its civic life. There may be a few shifts and certainly, there will be more money, so there will be more grantees in a much larger giving area (maybe national?).

Will we see more money going to charter schools and the school reform movement? Walton-friendly foundations and policy institutes are already ramping up for a much greater assault on public schools. One think tank representative says her group is rolling out its old school reform plans, including state legislative reforms, research agendas, and media blitzes. They are counting on the Walton heirs to continue and grow the school reform agenda.

For a current profile of the the Walton Family Foundation click here.

Carnegie Corporation Names Two Ex-Governors as Chair and Vice-Chair

CARNEGIE CORPORATION NAMES THOMAS KEAN AND RICHARD RILEY TO BOARD CHAIR AND VICE-CHAIR

March 23, 2007 -- The New York-based foundation, one of the ten largest in the US, recently elected two former governors to chair and vice-chair the board of directors. Former NJ Governor Thomas Kean will chair the board, and Former South Carolina Governor Richard Riley will serve as vice-chair. Both have strong education backgrounds, Kean as president of Drew University and a Presidential Education Policy Advisory Committee; Riley as former Secretary of Education in the Clinton Administration. Recently, Kean has been visible as the chair of the National Commission on Terrorist Attacks.

For a current profile of the Carnegie Corporation click here.

Vira and Howard Heinz Endowments Merge

March 21, 2007 Howard and Vira Heinz Foundations Merge -- Down to 56 Varieties of Heinz Philanthropy

The Pittsburgh-based Vira Heinz Endowment and the Howard Heinz Endowment announced that they would merge all of their operations.

Until the announcement there were six major Heinz-named philanthropies. The Vira, the Howard, the Company Foundation, the Corporate Contrributions Program, the Heinz Family Foundation and the Drue Heinz Foundation. Additionally, the family has several donor-advised funds in several public and community foundations, including the Tides Foundation in San Francisco and the Boston Foundation. Several family members have smaller philanthropies and operating foundations scattered across the country.

This is the second major shift involving Heinz philanthropies in the past year.

First, the HJ Heinz Company Foundation assumed primary responsiblitiy for company-related giving. In the past the Foundation was smaller than the Company Contributions program and was primarily giving in the Pittsburgh area. Although the unendowed foundation continues to focus on Pittsburgh, employee matching gifts and international relief, the foundation has tripled its giving capacity in the last two years. The HJ Heinz Corporate Contributions Program continues to give to a wider variety of interest and in a more geographically diverse area, but is now smaller and less valued by corporate officials.

Secondly, in the last week, the directors of the Howard Heinz Endowment and the Vira I. Heinz Endowment decided to create a single group -- The Heinz Endowments -- governed by a single board. Leading that board is Teresa Heinz, wife of Sen. John Kerry and widow of the late Sen. John Heinz.

According to the Pittsburgh Post-Gazette: With $1.4 billion in (combined) assets, the Heinz Endowments is now one of the 50 largest foundations in the United States... Handing out an average of $60 million a year in grants, it remains a key source of support for countless nonprofit organizations that depend on Heinz's money to fund arts, education, economic development, children and family programs.

The two endowments shared some staff, several administrative functions and offices, but had a few different program staff and some differences in their giving interests. With the merger, the two foundations will now focus on three Pittsburgh concerns: (a) Reform of the Pittsburgh Public Schools; (b) Downtown Pittsburgh's real estate development; and (c) "Green" technology, architecture and economic development.

For a current profile of the Howard Heinz Foundationclick here.

For a current profile of the Heinz Family Foundationclick here.

For a current profile of the Vira Heinz Endowment click here.

For a current profile of the HJ Heinz Company Foundationclick here.

St Paul Travelers & Federated Dept Stores Change Names

Changing Names

March 2007 Last year, when SBC purchased AT&T, the larger company also took over the smaller company’s name. The reason was obvious -- everyone knows and generally respects, AT&T, but only their customers know SBC.

In recent years, several other companies have gone through similar name changes, especially in the banking and retail industries -- Wachovia, Bank of America, US Bank, Wells Fargo, Target/Dayton Hudson, and Kmart.

This year two of the oldest and most well respected corporations and their foundations will also be taking the names of their smaller, acquired companies.

Minnesota-based Saint Paul Travelers is one of the oldest and most respected insurance companies in North America. A few years ago, “The Saint Paul” (as Saint Paulites knew it) purchased the Connecticut-based Travelers Property & Casualty Corp., a remnant of Travelers Insurance that had merged with Citibank in1998. When Citigroup spun off Travelers Property & Casualty Corp. in 2002, St. Paul Companies picked it up and christened the parent company St. Paul Travelers. Recently, the company announced it would henceforth be just Travelers Company.

Cincinnati-based Federated Department Stores, another revered company is the largest chain of department stores in America, having purchased among others, Bloomingdales, Filenes’s, Marshall Fields, Dayton Department Stores, May Department Stores and Macy’s (east, south, and west and wherever). Recently, the company announced that it would be changing the parent company name to Macy's. Most of the corporate department store divisions will keep their current names.

Along with their parent companies, both corporate foundations will also change names -- to Travelers Foundation and Macy’s Foundation.

Why do companies change their names? There are hundreds of reasons for changing names (including geographical diversification and economies of scale). However, both St. Paul Travelers and Federated Department Stores changed for for the most common reason, “branding” -- a desire to become better known through the purchase of a well known brand name.

Both St. Paul Travelers and Federated Department Stores are relying on increased name recognition to amplify consumer interest, increase stockholder respect, and generate employee enthusiasm (huge, employee pep rallies usually accompany a name change).

The St. Paul Companies name is hardly known outside of it headquarters city. However, everyone (at least those of us born before 1998) can remember Traveler’s and its famous little red umbrella.

Similarly, hardly anyone outside of Southwestern Ohio remembers the Federated name, but Macy’s is a bedrock part of American culture—the Macy’s Thanksgiving Day Parade, the Miracle on 34th Street, and the basic business axiom “Does Macys tell Gimbels?”

The Philanthropy Side What happens to philanthropy when the company name changes? Some companies use their philanthropy to support their new branding efforts –

For example, hoping to renew community goodwill in its hometown Minneapolis, as soon as Target Corporation purchased Marshall Fields, the parent company made an ill-conceived, but very quick million dollar donation in the name of the newly acquired company.

Whenever Wachovia Bank buys a regional bank, the company typically makes a whopping contribution to the local zoo, children’s museum, or other popular public charity.

Kmart announced its re-commitment to Sears' American Dream program at the same time it announced its take-over.

Federated Department Stores has already begun this process by rebranding some of its regional giving and corporate sponsorship programs with the Macy's name -- such as Macy’s Gives and Macy’s Reads. The seven regional divisions of Macy’s are expected to eventually take over charitable giving for all of the old Federated divisions (such as Bloomingdales).

Federated has already transitioned some of its philanthropy to a more brand-oriented giving. Sponsored programs (reading, school readiness, environment, Christmas gifts) are consuming more corporate philanthropic dollars and corporate marketing attention.

In the future, giving to lesser-known arts groups, education groups, and local organizations will probably decrease, as will the average grant size. Because United Way is not the branding opportunity it used to be, they should expect slightly smaller grants, less participation, and drastic cuts in some smaller communities.

On the other hand, St. Paul Companies/Travelers will immediately begin using the Travelers Foundation name for its national philanthropic program and the Travelers Connecticut name for its Connecticut-based giving. But overall, neither Travelers philanthropic programs or priorities will change much.

There are no anticipated changes in personnel. Both companies' foundations are directed by well-respected veterans, Mary Pickard of the new Travelers Foundation and Dixie Barker of the new Macy's Foundation.

For a current profile of the St Paul Travelers Foundationclick here.

For a current profile of the Federated Department Stores Foundationclick here.

For a current profile of the Macy's North Giving Programclick here.

Altria-Kraft Break Up May End Arts Grants

Altria-Kraft Break Up May End Arts Grants

January 5 2007: The Altria conglomerate which includes Kraft Foods, Ritz, Planters, Jell-O, Altoids, Parkay, Oscar Mayer, Kool Aid, hundreds of other food companies, and several cigarette companies has decided to split its food operations from its tobacco operations to protect Kraft and other food subsidiaries from the myriad of tobacco-related lawsuits Altria faces every year.

The breakup, which will begin in February is expected to greatly reduce the company’s traditional support for dance, theatre, museums and other cultural organizations. The breakup will result in a major reduction of Altria’s overall philanthropy. “We anticipate that our program will be significantly reduced in 2008,” says Jennifer Goodale, the vice president in charge of contributions at Altria.

As of 1/5/07, the webpage has no news about the coming changes. However, letters to arts grant recipients alerting them about the changes have already been sent. No news yet about the company's hunger, domestic violence and humanitarian aid interest areas. But it's safe to assume the new Kraft corporation will assume total responsiblity for hunger and domestic violence initiatives.

For a current profile of the Altria Corporate Giving Program click here.

OnPhilanthropy's 2006 Top Ten Philanthropy Stories

One of our favorite philanthropy blogs is onPhilanthropy(http://www.onphilanthropy.com/site/PageServer). Here are onPhilanthropy's Top 10 Philanthropy Stories of 2006 along with links to OnPhilanthropy's original accompanying stories. Some worthwhile, but lighter reading material while on holiday break.

1. Warren Buffett

Back in June, we wrote this line: "If you were looking for the starting line in the super-hyped 'transfer of wealth' between one generation and the next and its direct implications for American philanthropy all you had to do was listen to Warren Buffett today." And that lead holds up. The mega-investor's mega-gift is a no-brainer as story of the year.

Buffett's commitment of $37 billion to the Bill & Melinda Gates Foundation is the largest gift ever, and a clear, brilliantly-lit marker on the philanthropy landscape - both an inspiration and a challenge to two different generations of Americans. It also raised questions of scale, of governance, and of effectiveness. As our own Dr. Susan Raymond wrote:

"You face both a challenge and an opportunity. The challenge is that, in 40 years, governments of the industrialized world have spent $2.3 trillion on foreign assistance. Most recent studies have shown no relationship between that expenditure and real economic growth or self-reliance. The opportunity is to show that private philanthropy can do a better job."

Transfer of Wealth Begins With Hand-off From Buffett to Gates
http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=6605

2. Clinton Global Initiative

In only two years, former President Bill Clinton's CGI has become the go-to conference for real change and cross-sector cooperation. More than 55 former or current heads of state, First Lady Laura Bush, and a who's who of philanthropists gathered for three days of peace, love, and understanding in New York - and CGI came away with more than $7 billion in commitments to change the world. More than one analyst commented that CGI has become a government-in-exile - both in terms of the U.S. Presidency and the United Nations. The big question: how the commitments will really work in the out years.

Clinton Global Initiative Special Report
http://flip.onphilanthropy.com/news_
onphilanthropy/clinton_global_initiative/index.html

3. Google

What to make of the emergence of Google.org as a for-profit philanthropy? Hard to say - and it may be hard to say for quite a few years. Nonetheless, Google's hard charge into philanthropy and its dominance of new media makes this a very big story indeed. As Dr. Raymond remarked: "How is this “philanthropy?” The end is socially driven, but the means are the beauty of capitalism carried out largely in the marketplace. Clearly, The End of Definitions is upon us. This is a good thing. Change reflects the adjustment of institutions and intellects to the realities of life."

Google's Philanthropy: The End of Definitions
http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=6731

4. Richard Branson

The book-end to Google's "philanthropy" was Sir Richard Branson's "giving," which he announced at the Clinton confab. All the profits from Virgin's transport businesses will be ploughed back into developing alternative fuels; much of the funding will go to for-profit companies, some owned by Branson. Yet, he could just put the profits into his pocket. Again, "philanthropy?" Who knows. Philanthropic? Yes. Effective? Time will tell. We'll be watching.

Virgin and Google: But Is It Philanthropy?
http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=6739

5. Celebrities

Bono and Friends would be an excellent title for this year's philanthropy record, if there were one. It was hard to turn around without seeing another celebrity embracing philanthropy, traveling to Africa, fighting disease or poverty or oppression.

We Still Haven't Found What We're Looking For
http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=5695

6. Senator Charles Grassley

Senate hearings on potential changes in the regulation of nonprofits, led by frequent nonprofit critic Grassley, a Republican from Iowa, had the sector wondering about big changes in Federal law. As onPhilanthropy contributor contributor Paul Firstenberg noted: "These developments would seem to carry a clear message: tax exempt organizations should move quickly to get their own house in order before changes are legislated."

Preparing Nonprofit Directors for the Coming Changes in Governance
http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=6689

7. Cause Marketing

Consumer products of all shapes and sizes and their brand managers discovered philanthropy this year, as cause marketing exploded. It's everywhere, from the corner grocer to the biggest of big boxes to online stores and luxury peddlers. Back in June, we wrote: "Remember the phrase, 'you are what you drive?' You can apply it to what you eat, where you live, what you wear, watch or listen to - and how you give." Marketers understood this in 2006 more completely than ever before. And nonprofits, a Changing Our World study found, are now spending billions to reach consumers.

Modern Philanthropy: Bring Out the Consumer Brands
http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=6729&security=1&news_
iv_ctrl=1161

Consumer Philanthropy: Nonprofits Spend Billions to Reach Consumers
Changing Our World Pegs Marketing Spending at $7.6 Billion Annually
http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=6863&security=1&news_
iv_ctrl=1161

8. The Nobel

Contributor Bodi Luse nailed it: Mohammad Yunus calls Grameen a social business enterprise. What he means by this is different from the typical definition of social enterprise as a business created by a nonprofit to generate income. Grameen, on the other hand, is a for-profit business whose purpose is to create profits for a social purpose. It’s an interesting distinction.

Business for Peace
http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=6769

9. Blogs and Media

You've seen the magazine covers, the special segments on television, the sections in the newspaper, the philanthropy columnists. Heck, philanthropy made the cover of the Economist twice in one year! Philanthropy hit the mainstream media this year, but it also found a big place in the blogosphere - 2006 was the year of the philanthropy blog; indeed we launched two blogs here. Citizen media written and consumed by participants, not by sideline observers helps to change the public conversation, and it's changing what we've come to think of philanthropy.

Special Coverage of Blogs
http://flip.onphilanthropy.com/news_onphilanthropy/
blogs/index.html

Future Leaders in Philanthropy Blog
http://flip.onphilanthropy.com/

10. Don't Compete, Collaborate

If there was a cliche of the year in philanthropy, it was "collaboration." Even Bill Gates doesn't want to go it alone in backing causes - he's looking for partners. Bill Clinton's gathering of bigshots was all about leverage and collaboration. Truth is, with a million nonprofits plus religious organizations and international philanthropies all looking for donor dollars - as well as solutions to the world's ills - we'd better all collaborate, because there clearly isn't enough money to go around.

Milken Lessons: Collaborate Across Sectors
http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=5131

Emmet Carson to leave Minneapolis Foundation

After serving 12 years as president and CEO of the Minneapolis Foundation, Emmett Carson will be lieaving his post to head a larger foundation in California.

According to the Minneapolis Foundation press statement, Carson will start his new position on November 1. During Carson's tenure with the Foundation, it has tripled its assets to $650 million and now administers over 100 charitable funds and more than 500 donor designated funds.

The Silicon Valley organization is the merger of two large Bay Area foundations that will manage a total of $1.5 billion in assets and manages 1,400 charitable funds.

For a profile of the Minneapolis Foundation click here.

Leavitt family foundation

July 29, 2006 The family foundation of US Secretary of Health and Human Services and former Utah governor, Michael Leavitt is under attack for awarding grants to Southern Utah recipients which were used to pay for services from Leavitt family-owned businesses.

Everyone seems to agree that the foundation did nothing that is specifically illegal, but on the heels of several other Bush administration scandals and in the middle of a major Congressional investigation of charity practices, another foundation scandal smells bad.

In short, the Dixie and Anne Leavitt Foundation which was established in 2000 and distributed only $100,000 to charities in its first four years of operations, has recently awarded $500,000 to a Southern Utah University student housing program which used the grant to house students in Leavitt-family owned apartments.

The Leavitt foundation is a supporting organization of the local community foundation, the Southern Utah Foundation. The community foundation executive director, Scott Truman is a trustee of the Leavitt foundation.

A supporting organization of a community foundation must hand over its final grantmaking decisions to the community foundation. However, in this case, the community foundation did not overturn or deny the Leavitt family's wishes to award $500,000 to a grantee that they knew would eventually pay it back to the family's for-profit businesses.

The Leavitt family's self-serving grant is distressing and points out the lack of IRS regulation and oversight of foundations. However, the community foundation's willing participation in this activity is even more disturbing, and points out the major flaw in community foundations' current pre-occupation with recruiting donor advised funds.

Community foundations rarely assert acceptable custody over donor designated funds, foregoing their legal responsibility to put the community's interests over those of the donor and placing their own fundraising interests in front of the need for legal and community oversight.

Hopefully, while the media is focusing on the Leavitt family's gaffes, someone will also spend some time looking at the nature of the donor-community foundation relationship that permits this type of misjudgment.

For a profile of the Dixie and Anne Leavitt Foundation click here.

For a profile of the Southern Utah Foundation click here.

Corporate Sponsorships Grow by 10%

IEG Issues Annual Report on Corporate Sponsorships

May 31, 2006 IEG, the largest and most well-respected resource on corporate sponsorship programs reports that corporate sponsorships for sports, nonprofits, entertainment, grew by more than 10% in 2005. Because corporate sponsors are moving away from traditional media outlets and looking for new creative means of advertising their products and services, IEG predicts that corporate sponsorship dollars will continue to grow by at least 10% annually during the next two to three years.

While professional and amateur sports teams receive about two-thirds of corporate sponsorship funds; nonprofit causes, arts organizations, festivals/events, and nonprofit associations attract nearly 25% of the $13.4 billion that corporations spend on sponsorship related advertising and promotional relationships. Nonprofit causes (.e.g., breast cancer, the environment, youth development) have increased their share of the sponsorship market by more than one-half billion sponsorship dollars during the last year.

According to IEG, at least 85 companies spent $15 million or more on sponsorships last year. The top five – Anheuser-Busch, Pepsico, General Motors, Coca-Cola, and Nike – all spent between $200 million and $300 million on sponsorships.

Sponsorship investments grew most in the telecommunications industry, the food industry, and among Japanese-owned auto companies. The telecommunications industry stiff competition for local and national phone customers drove sharp sponsorships increases by SBC/ATT, Verizon/MCI, and Sprint/Nextel.

Compared to the $25 million for the food industry average, McDonalds spent $115 million on sponsorships. However, compared to McDonald's, other food companies (e.g., Yum Brands KFC, Pizza Hut, Taco Bell, Subway, Cadbury Schweppes, Mars, Conagra and General Mills) substantially increased their corporate sponsorship dollars specifically for nonprofit causes.

Even industries and companies in trouble, such as airline companies, department stores chains, and the Big Three American automakers increased the sponsorship dollars. Ford Motor, General Motors, and Daimler Chrysler collectively spent more than one-half billion dollars on sponsorship last year (compared to less than $225 million on grants).

IEG and other corporate bystanders say corporate sponsorships will continue to grow as the preferred form of corporate-nonprofit partnerships and corporate advertisers will continue to look for new, creative promotional venues.

If so, smaller and mid-sized nonprofits will need to educate themselves about the technicalities of corporate sponsorships, determine where their organizations fit in the sponsorship spectrum and try out sponsorships as an important new form of institutional income.

IEG (http://www.sponsorship.com/) is an interesting place to learn about the players, language, and infrastructure of corporate sponsorships. However, it is not intended for the newcomer. The Foundation Center has a small library of books and articles; and several state councils of nonprofits host workshops on corporate sponsorships.

The Access Philanthropy profiles of corporate funders generally do not include information on corporate sponsorships, however, for a funding profile of the top-ranked corporate sponsor Anheuser-Busch click here.

Michael Joyce, Paragon for Activist Grantmaking, Dies at 63

Michael Joyce, Paragon for Activist Grantmaking, Dies at 63

March 3, 2006 Collectively, most important philanthropists are old. The average age of the Top 100 Foundation CEOs is in the mid-sixties. The average age of their trustees is even older -- late sixties to early seventies. We pride ourselves on running critical and uncommon trend-spotting reports in this space. Grantmaker deaths and obituaries are fairly routine.

This one however, is special. Michael Joyce, long-time CEO of both the John M. Olin Foundation, (1979-85) and the Lynde and Harry Bradley Foundation, (1985-2001) died last week of liver disease.

Bill Berkowitz of Media Transparency (http://www.mediatransparency.org/), no fan of Joyce, says “If there was a Hall of Fame for right wing philanthropists and their facilitators… one of its first inductees would undoubtedly be Michael Joyce.”

As CEO of two of the largest politically conservative foundations in America, Mike was responsible for hundreds of millions of grant dollars constantly flowing to and for conservative ideas and causes.

Organizations and people such as the Heritage Foundation, the Madison Center for Educational Affairs, the American Enterprise Institute, the Hoover Institute, Free Congress Foundation, Charles Murray, William Bennett, Robert Bork, Michael Novak, and Dinesh D Souza received substantial and ongoing support from the Olin and Bradley foundations during his leadership.

In 1986, an Atlantic Monthly article named Joyce as "one of the three people most responsible for the triumph of the conservative political movement.” His success was not only about his access to, and use of funding. Mike was also a social engineer and venture philanthropist, a politically conservative version of philanthropy pioneers John Rockefeller Jr., Andrew Carnegie, Jane Addams, Peter Cooper, Margaret Olivia Sage, and Frederic Gates.

Mikes social engineering successes continue to make headlines and legislative calendars – the federal Welfare to Work system, the School Choice movement, and the White House Faith-Based Initiatives.

His work on the Welfare to Work system is perhaps one of the most forceful modern examples of the impact a foundation can have on American life. Beginning with small grants to a few human service agencies on the Southside of Milwaukee, Joyce worked the relationship between government, the nonprofit sector, and economically disadvantaged families until he felt he had sufficient government infrastructure, community support, political advantage, and financial force to create a new welfare system.

Constantly building coalitions, cajoling allies, and bargaining with grants, Joyce moved his new welfare system initiative through the City of Milwaukee, Milwaukee County, neighboring communities, and then the State of Wisconsin.

With help from then-Wisconsin Governor Tommy Thompson, Joyce channeled funds to several national human service agencies, think tanks, and political support groups who agreed to push the new welfare system through other states and the federal system. Finally, under a Democratic president, the federal government, Congress, most major human service agencies, and advocacy groups accepted Joyces vision of the Welfare to Work system as the accepted model for federal assistance.

His efforts on school choice and faith-based initiatives, while successful, have not fared quite as well as his efforts on welfare reform. Moreover, his short-term tenure as director of the White House Office on Faith-Based Initiatives was unsuccessful, as a government entrenchment job would be for almost anyone with Joyces imagination and will.

Near the end of his life, this former school teacher and football coach told an audience at Georgetown, “our overarching purpose was to use philanthropy to support a war of ideas to defend and help recover the political imagination of the [nations] founders--the self-evident truth that rights and worth are a legacy of the creator -- not the result of some endless revaluing of values."

Every one of us in philanthropy, whether or not we agree with his values and the outcome of his labors, must agree that his philanthropic strategies and his activism were highly successful, a great model for all political stripes of philanthropic activists.

The John M. Olin Foundation closed up shop last November, fearing that future generations of trustees might not finance the same values that the foundation founder espoused.

However, for a profile of the Lynde and Harry Bradley Foundation click here.

Great Growth in Small Foundations

February 15, 2006 The New York-based Foundation Center says there are now more 31,300 independent family foundations, which have combined assets of more than $200 billion.

The growth of these smaller family foundations is GREAT news for grantseekers, even if the apparent workload seems appalling.

Together these 31,300 small grantmakers gave away more than $12 billion in 2004, a billion dollars more than the total giving of the top 100-grantmaking US foundations (including corporate foundations, patient assistance funds, community, and independent foundations, such as Gates, Ford, Lilly, Johnson, and Packard).

The instinctive grantseeking reaction is obvious – 31,000 proposals vs. 100 proposals – not a good time/income ratio. An understandable reaction.

However, some CEOs and development officers of multi-million dollar nonprofits report that they spent as much time on their first Ford, Johnson, or Kellogg Foundation proposals as they did on all other grantseeking efforts combined.

Furthermore, Gates, Lilly, Johnson, Annenberg, and Moore have very limited interest areas. Columbus, New York Community, Boston, Silicon Valley, Chicago and other community foundations have very limited geographic regions. And the pharmaceutical company patient assistance funds are – well, you know.

True, small family foundations also have limited funding interest and geographic parameters. There are very few Rath and Max and Victoria Dreyfus foundations in world. Nevertheless, there are several reasons why the growth of small foundations is good for grantseekers everywhere:

First, small family foundations are a great training and proving ground for fundraisers and for nonprofit organizations. No one begins his or her grantseeking career with a proposal to the Carnegie Corporation; at least no one with an annual operating budget of less than ten million dollars. Small family foundations give us time to make mistakes, hone our messages, and tell us truthfully how our organizations come across to the public.

Segue to the second benefit – Ford, Mott, Carnegie, Moore, and MacArthur have their own agendas and the visions of the way the world works. If we agree with their vision, we still have a one in 100 chance of getting into the final pool of proposals. If we do not, we will never make it past the first round, and we will probably never know why. Grantmakers – large or small – are rarely so blunt that they tell the whole truth. However, small grantmakers are typically more transparent after the turndown, than the folks who work for larger funders.

The third benefit is related to the first and second -- accessibility. Even when a small family foundation says they only fund pre-selected organizations, there is still a good chance someone from the small family foundation will take a phone call or read a letter of inquiry, or listen to the request of a mutual acquaintance. This kind of accessibility significantly increases the funding opportunities of new, non-traditional, and unconnected organizations; the true research & development sector of the nonprofit industry.

Fourth benefit – the type of support. The Foundation Center reports more than 30% of small foundation grants are awarded for general operating support, nearly double the proportion of general operating support grants awarded by the large foundations and nearly quadruple the proportion awarded by the larger private foundations, such as Kellogg, Packard, and Starr.

Fifth benefit – while foundations are a critically important part of American philanthropy, 80% of charitable donations are still awarded by individual donors. With the pending trillion-dollar transfer of wealth, this percentage is expected to increase a few points within the next few years. The endowments of smaller family foundations guarantees a percentage of the trillion dollar transfer will remain in the philanthropic sector. The general transparency of foundations facilitates grantseekers efforts to determine where and how they can find their portion of the trillion dollars.

Finally, grantseekers working for local arts and human service organizations have one more reason to rejoice. While education and health are the top giving interests of both large and small foundations, the percentage of grants awarded to human service and arts organizations is much higher among social service than the proportions awarded by larger funders. This is especially true for local arts and human service groups who have very little innovative or original programs to offer Ford and Mellon.

Therefore, while we honor and appreciate the great social, education, political and scientific strides funded by the larger funders, we deeply appreciate the smaller foundations. We appreciate their consistent help, their willingness to work with smaller, less traditional charities and we appreciate what they do to prepare us for relationships with the larger foundations.

For a summary of the Foundation Center’s survey on small foundations, go to: http://www.fdncenter.org/research/trends_analysis/pdf/key_facts_fam.pdf

For a profile of the Ford Foundation click here.

For a list of small funders interested in your community or your area of work, contact ACCESS PHILANTHROPY at the email address or telephone number listed below.

Dove Self-Esteem Fund

Philanthropy and the Dove Soap Superbowl Commercial

February 7, 2006: Did you see the Dove Self-Esteem Fund commercial during the Superbowl last Sunday?

More than 86 million people in 80 countries worldwide viewed the Dove Self-Esteem Fund commercial, which cost more than $2.5 million for 45 seconds of airtime. Created by Ogilvy/New York, the commercial shows clips of young women questioning their looks, their intelligence, and their self-worth. The commercial tells us to get involved and support these young women. The ad also reports that Dove Soap has established a fund to back up its support for women & girls self-esteem.

(A subsidiary of the British and Dutch-owned Unilever Group, Dove is the worlds largest soap company; selling nearly three billion dollars worth of soap, shampoos, conditioners and body washes annually.)

Did you wonder if the Dove Self-Esteem Fund is a new grantmaking opportunity for your organization?

In a word: not-so-much.

Taking a page from the Avon Breast Cancer campaign, Dove is putting up millions for this great cause, but not for grants. According to the webpage (http://www.dove.ca/doveselfesteemfund/)

”The Dove Self-Esteem Fund is a national resource established as a link to Doves Campaign for Real Beauty, a program aimed at changing the current, narrow definition of beauty. We believe that to make a real difference, we must take action and contribute in ways that will help women and girls celebrate their individual beauty.

The goal of the Fund is two-fold: 1) Develop tools and resources to help Canadian women and girls build stronger self-esteem and 2) Support organizations in Canada that foster a broader definition of beauty and positive self-image among women or girls."

Currently, the Fund has two partners – The National Eating Disorder Information Centre (NEDIC) of Canada and ANEB, the Quebec Association for Assistance to Persons Suffering from Anorexia Nervosa and Bulimia.

The Fund is working with these organizations to create support websites, traveling exhibitions, educational information, and even crisis telephone hotlines.

The Philanthropy Angle: According to the webpage, in 2004 the Fund created a traveling photography exhibition that generated $20,000 for NEDIC. This year, the company will contribute twenty-five cents to the Self-Esteem Fund – up to $25,000 – every time you email the commercial to a friend. No word yet on what the $25,000 will be used for.

Email and telephone inquiries to the company and the advertising agency have not been returned yet.

Grantseekers should probably stick with the Unilever United States Foundation or even better, stick a spoon in one of Unilevers other products, Ben & Jerrys Homemade Ice Cream.

For a profile of Unilever United States Foundation click here.

Merger Season

Merger Season

January 26, 2006: During the last few weeks, three major corporate mergers have been in the news: 1) the Citigroup purchase of Legg Mason, 2) the Boston Scientific purchase of Guidant and 3) the merger between CBS-owned UPN and Warner-owned WB television networks.

Citigroup/Legg Mason: The largest US banking firm, Citigroup recently completed its purchase of Baltimore-based brokerage firm Legg Mason. Citigroup plans to merge these operations with its Smith Barney subsidiary.

While the merger was amicable at the management level, several Legg Mason brokers and clients are not pleased with (a) Citigropup hardball merger rules (brokers and clients must agree to stick with Citigroup for three years before selling/purchasing new stock), (b) the current Citigroup return on investment and (b) the idea of being associated with a firm touched by so many Wall Street scandals.

The Philanthropy Angle: Before its merger with Travelers Insurance in 1999, Citibank was the finest bank-related philanthropy in the US, if not the world. However, the merger fuzzied the Citigroup giving program and Travelers Insurance CEO Sandy Weill prefered higher education philanthropy, which did not mix well with the Citibank neighborhood- based philanthropy. The result is a complicated and stagnant domestic giving program (their international program remains one of the best in the business).

Legg Mason philanthropy, on the other hand remains generous, simple, and forthright. However, company giving is based primarily in the Maryland- Washington DC- Northern Virginia area. So, no one outside of this area will be negatively affected by the merger.

Both corporations awarded relatively the same number of annual grants to local groups, Citigroup gave 40-50 annually in MD-DC-VA during 2003-05, while Legg Mason normally awards 45-55 to local groups. There has been some giving overlap for the larger recipients (e.g., YMCA, the public library, major performing arts groups).

If the Citigroup history of post-merger philanthropy continues, these major local grantees will be the only ones immediately affected by the merger. Their grant income from the combined entities will shrink by a factor of 33%-66% over the next year. However, if Citigroup keeps the Baltimore office open (a big “if”), smaller organizations should continue to receive the same or slightly less funding from the combined operation. If Legg Mason offices are moved to New York however, the number of recipients and the size of grants will dramatically decline over the next few years.

Boston Scientific/Guidant: Guidant has gone through a few bad years. Questions from the SEC, equipment recalls, bad mergers, and a jilting by Johnson & Johnson have dropped morale, stock prices and company philanthropy.

On the other hand, like the company itself, Boston Scientific philanthropy is beginning to mature and grow. The foundation strategies are now moving beyond the self-indulgent "strategic philanthropy" phase that many new health and technology companies exhibit in their early years as corporate philanthropists.

Both companies are involved in cardiology side of high technology, both have operations in California, Minnesota & Indiana; and both have struggled to keep ahead of constantly changing developments in cardio-high tech health field. Other than what the purchase will do to Boston Scientific indebtedness, most analysts say this should be a good merger for both companies.

The Philanthropy Angle Both companies have foundations. However, Boston Scientific is distributing $2 million annually, while Guidant gives away nearly $15 million. This distribtuion disparity, their overlapping business interests, and the fact that both companies have substantial operations in Indianapolis and St. Paul-Minneapolis, suggests that something will have to change in the philanthropy area.

The Paprocki Theorem on Post-Merger Corporate Philanthropy: “The Alpha CEO (the one who emerges as the CEO of the newly combined corporation) gets to determine what type, what programs, and how much philanthropy the new company will have.” unfortunately applies in this situation:

Boston Scientific CEO Jim Tobin is not really a community-philanthropy kinda guy. A Harvard grad and former Navy lieutenant, Mr. Tobin has had plenty of experience with high tech health, serving as an officer with Baxter International and Biogen before joining Boston Scientific in 1999. He also serves on the board of two other high tech health companies, Applera and Curis; but his only charity involvement is a membership on the board of directors of Boston Beth Israel Deaconess Medical Center.

Back of the Envelope Calculation: While the Guidant purchase suggests Boston Scientific will continue to ramp up its efforts to be a major “player” in the health field (along with Baxter, Johnson & Johnson, Merck, Medtronic, GE et. al), it is difficult to envision Tobin and the Boston Scientific corporate culture moving from $2 million to more than $17 million in annual giving.

Guidant obligations (including pledges through 2008) will be kept and its business-related philanthropy will be retained. However, it is likely that Guidant higher education grants, fellowships, and local grants programs, along with annual gifts to United Way will be cut by 33% to 50% over the next three years.

UPN-WB Networks: Neither of the to-be merged entities or their parent corporations has much invested in philanthropy. There is no reason to believe the merged network will have anything resembling a normal corporate giving program. Nothing else to say, except that we will miss the dancing frog.

For a profile of Citigroup Foundation click here.

Construction Companies and Philanthropy

Forbes reports construction companies have the highest return on investment over the last five years

January 4, 2006 -- Last month, Forbes magazine published its annual list of the 400 best large companies in America, that is, companies whose stock prices rose the most during the past 12 months. Also known as the Forbes Platinum 400, these publicly held companies are ranked by sales, net income, and of course, company stock price performance during the last year, as well as their performance during the last five years.

Software and technology companies with the newest gadgets and utilities, such as Seagate, Activision and SanDisk had the best return on investment during the past year, but over the last five years (including the financially disastrous years of 2002-03), the home construction industry outperformed all other industries.

Of the top twenty companies with the best return on investment during the past five years, seven were construction companies: Brookfield Homes, William Lyon Homes, Hovnanian Enterprises, Building Materials Inc., Meritage Homes, NVR, and Ryland Group. All had a 50% to $100% return on investment during the past five years.

Also among the top sixty companies were seven other construction groups: Beazer Homes, DR Horton, MDC Holdings, KB Homes, Pulte Homes, Technical Olympic, and Lennar. That is fourteen of the top sixty companies!

In an era when computer and technology companies are front-page news, nearly one-fourth of the best performing companies are in the old-fashioned residential construction business.

While recent news stories about the real estate and construction industries have been less favorable (“stocks dip as home building wobbles,” real estate job engine slows down”, “US Housing Still Overvalued”). Stories about individual home construction companies still report record sales during the past quarter and optimistic predictions for the coming year.

The Philanthropy Angle : of the fourteen construction companies in the Forbes Platinum 60 only six have formal giving programs. Just one – Lennar – sponsors a charitable foundation; and five have formal corporate giving programs: Williams Lyon Homes Corporate Giving Program, NVR Inc. Corporate Giving Program, Ryland Group Inc. Corporate Giving Program, and Pulte Homes Inc. Corporate Giving Program, and KB Homes Corporate Giving Program.

Transparency: While these six may have formal giving programs, with the exception of Lennar Foundation, none provides helpful information about their giving programs on their webpage, by telephone or by email.

Although all of these companies have a presence in several states, but most report their philanthropy is based primarily in their headquarters communities, Our efforts to get secure philanthropy information from local company representatives in non-headquarters states failed miserably.

This is what we could find about the six companies with giving programs:

Lennar: Mostly Florida (presence in 9 states) with general interest in education, human services, and health.

Pulte: Mostly Michigan (presence in 23 states) with general interest in education, housing, environment, arts and human services for underprivileged youth.

Ryland: Mostly in California (presence in 18 states) with broad interest in adult education, mental and physical health, family-based services, and housing.

NVR: Mostly in Delaware, Maryland, DC, and Virginia (presence in 11 states) with general interest in adult education, housing, and some youth development.

William Lyons: Mostly Southern California with interest in performing arts.

KB Homes: Mostly in California (presence in 13 states) with interest in human services, youth development, housing and civic projects.

The Local Angle : While national construction companies have limited interest in philanthropy, local construction companies have shown a much greater concern for local community and charitable concerns. Our research in the Atlanta, Washington DC, and Minneapolis-St Paul metro areas show more consistent and much more transparent philanthropy among construction and development companies in those communities.

While local construction companies maintain some philanthropic interest in education, human services, and housing, we found the major construction company donors in these three metro areas were much more interested in the arts, faith-based organizations, and civic projects (e.g., downtown development, urban beautification, local private colleges and schools, and general school/government improvement).

Not surprisingly, we also found that local construction company philanthropy is typically connected to owners family philanthropy. If the family is interested in homelessness, chances are the company will have the same philanthropic interests.

Quick and Grubby Analysis: While national construction companies may be much more profitable than telecommunications companies and automobile manufacturers, the phone and car companies are much more reliant on huge quantities of public goodwill and good public relations.

Residential construction branding (e.g., “Oak Grove Homes,” “Rambling Creek Homes”) say little about the company. Additionally, because of the nature of the business, construction company reputations change dramatically from one planned community to another.

Furthermore, homebuyers, while socially conscious, are unlikely to buy their six-figure home based on whether the construction company gives to their favorite charities, a growing criterion for consumer telephone and automobile purchasers.

Because their consumer and stock-owing stakeholders do not care about their philanthropy, construction companies are not obliged to neither give very much, nor do they feel obligated to report on their giving. The marginal philanthropy they do sponsor – adult education, basic health and human services, seems more directed at their employees and the regulatory agencies that allow them to develop huge tracts of upper income homes in suburban and outlying communities.

On the other hand, local construction companies still have a stake in their communities. Family and community reputations still influence the local choice of architects, general contractors, and construction companies. Consequently, local construction companies give where the family feels most compelled to give and where company reputation will be best served.

Final Note :Construction company giants Weyerhaeuser and Centex both have formal giving programs but neither made the Forbes Platinum list.

For a profile of Pulte Homes Corporate Giving Program click here.

Construction Companies and Philanthropy

For a profile of Lennar Foundationclick here.

A&P Stores Pullback from Mid-Atlantic & Southern States

November 8, 2005 The Great Atlantic and Pacific Tea Company aka A&P Grocers has announced another market pullback. The company announced last month that will soon be closing or selling its supermarket stores and distribution centers in Maryland, Washington DC, Virginia, southern New Jersey, Mississippi, and Louisiana. The company will maintain and refocus its business efforts in Connecticut, Canada, northern New Jersey, and upstate New York.

Once the second largest grocery chain in the US, A&P dissolved into an untenable blend of regional stores and private brand products. Recently, the company sold 57% of the company to the German-owned Tengelmann Group, one of the worlds largest food retailers.

Food retailers, like the drug retailers, works on very slim profit margins; and faces high labor & occupancy cost. At the same time, chains like A&P, Giant, and Winn-Dixie face overwhelming competition from mega-stores like Wal-Mart, Costco, and Target Stores. Consequently, several food retailers have been forced to collapse their markets to reduce their distribution costs or sell outright to European food retailers such as Tengelmann, ALDI, Metro AG, and Ahold.

Philanthropy Upshot A&P Stores, like the food retailing industry in general, has never been a great source of cash support for nonprofits. A&P grants are generally limited to cancer and childrens services, and mostly in Baltimore, Louisiana, and the Tri-State area of NY-NJ-CT. However, the local A&P stores have traditionally been a great source of in-kind contributions, especially dontated foods, employee-volunteers, fundraising locations, and publicity sites for small, local charities, youth sports teams, and community churches.

While Wal-Mart has tried to recreate the tradition of small community grantmaking through its thousands of grants to cheerleading squads, parish festivals, and K-12 schools, their financial resources have tightened during the past few years and their efforts have not been replicated by other mega-stores (with the possible exception of Whole Food Markets).

European food retailers like ALDI and Tengelmann have not assumed responsibility for the philanthropic traditions of their American acquisitions; and American-owned food retailers, such as Krogers, Albertsons, and Safeway are somewhat tentative in their giving programs. Hunger, nutrition, K-12 education, and youth programs remain the focus of the American food retailers giving programs.

As for the A&P story, only a few smaller charities, such as community youth groups, parish festivals, K-12 fundraisers in Baltimore, southern New Jersey, and a few other locations will be affected by the A&P market pullback, but unfortunately, fundraising opportunities for America’s most cherished charities continue to decline.

For a profile of A&P Corporate Contributions Programclick here.

Wal-Mart Foundation Profile

For a profile of Wal-Mart Foundationclick here.

For a profile of Albertson Corporate Contributions Programclick here.

Katrina, Rita, Wilma and Insurance Philanthropy

October 30, 2005 -- The insurance industry payout for damages from Hurricanes Katrina, Rita, Wilma and others have not been totaled yet; but industry analysts say the mark will be somewhere between forty and seventy billion dollars. According to the Insurance Information Institute, the insurance industry will lose around forty billion dollars this year. The anticipated number of claims from Katrina damage alone is ten times the number of all claims that resulted from all the hurricanes that hit Florida during 2004.

Which insurance companies were hit the hardest?

According to industry and news reports, the greatest outlays will come from Allstate and State Farm Insurance, two of the largest insurance companies in America, which collectively own between 40% and 55% of the insurance market in Florida, Alabama, Louisiana, Mississippi, and Texas. The credit ratings (and thus the cost of borrowing money) of both companies have been affected, but both companies say they will not be damaged in the long-run.

However, the hardest hit insurers will be two groups of companies:

First, those with insurance and investment portfolios heavily weighted in commercial properties on the Gulf Coast

Second, those companies located in the South who consequently have much of their property portfolios in states affected by the hurricanes.

Included in these two groups are smaller companies such as the state Farm Bureaus, Poe Insurance, Zurich, Auto Owners Insurance Group, Combined Federal Insurance, St. Paul Travelers, Alfa Insurance, Farmers Insurance Group, and USAA that have a smaller share of the Southern states insurance market, but have a larger share of their total financial resources invested in affected areas.

(Atlanta based AFLAC and ING companies were not physically affected by the storms and do not have any primary investments in Southern commerical or residential property).

Impact on Industry Philanthropy:

The Good News: During the past ten years, the insurance industry has come to view philanthropy as an integral component of its business. Insurance companies make money when they don’t have to payout on the premiums they receive. Nonprofit organizations serve the insurance industry well by preserving and protecting insurance industry investments. Consequently, it is simply good business to financially support nonprofits.

Consequently, insurance companies will probably not substantially reduce their giving budgets as they did after Florida’s catastrophic Hurricane Andrew in 1992.

More Good News: Financially, the insurance industry was doing pretty well before Katrina struck, so the industry was prepared for the disaster. For example, St. Paul Travelers will payout one billion dollars during this quarter for hurricane related disasters, but will still end the quarter in the black. Consequently, there should be no industry-wide disasters that keep most companies from maintaining their current giving programs.

The Bad News: Philanthropy from smaller, regional insurance companies with heavy investments in affected states will certainly be affected. While the Farm Bureaus, Alfa, USAA, and others have never been known for their generosity, what they had will certainly be reduced.

More Bad News: Since insurance companies are forbidden to raise premiums to cover the costs of payouts, the forty billion dollars in losses and the increased cost of credit will have to come from somewhere. Employee layoffs will reduce some of the bottom line losses, but corporate giving departments and other divisions will also have to shoulder some of the outflow.

Even More Bad News: Katrina, Rita, and Wilma have further pushed the corporate giving trend towards disaster-based priorities. A few disaster-based gifts (well-publicized, mega-donations for victims of hurricanes, tornados, famine, war relief, and terrorist activities) are cost-effective, safe, popular with employees, and more consistent with community relations goals than traditional grantmaking programs for hundreds of nonprofits.

The American Red Cross and other disaster relief groups have effectively tapped into and partnered with American corporate giving and corporate volunteer programs. Assuming there are no further internal disasters in the relief community, these relationships will continue to grow as long as there are disasters to relieve.

The Bottom Line The money to cover forty billion in insurance industry losses will have to come from somewhere. However, because of the services nonprofits provide to the insurance industry, corporate giving programs will not have to bear the full brunt of the losses.

For a profile of Allstate Foundationclick here.

For a profile of State Farm Insurance Companies Foundationclick here.

For a profile of St Paul Travelers Foundationclick here.

For a profile of USAA Foundationclick here.

Home Depot Keeps Fourth Quarter Funding for Katrina

September 21, 2005 -- Typically, we do not run press releases and communiqués on this page, but here is the response from the Atlanta-based Home Depot Foundation to Hurricane Katrina:

". . .As such, The Home Depot Foundation is reserving its 2005 4th cycle grant resources to fund efforts that will lead to long-term rebuilding strategies in communities impacted by Hurricane Katrina. We will only be considering grant proposals submitted by nonprofits invited to do so by our Foundation. If you have already submitted a grant proposal, we will carry it in our system and consider it for funding in the next available open cycle . . ."

For a profile of Home Depot Foundation, click here.

For more on the effects of corporate hurricane relief contributions on other organizations, read the piece immediately following this article.

(Thanks to Luke Avery, from our client organization Minnesota Housing Partnership for this update.)

The Effects of Corporate Hurricane Relief Donations

September 19, 2005: Corporate giving for Hurricane Katrina relief will exceed one billion dollars by the end of September, with another one-half billion to one billion dollars anticipated by the end of the year. Especially in light of the tsunami relief support being contributed in the same fiscal year, these gifts are a very generous show of support from Corporate America.

During our east coast workshop tour, we received several questions regarding the effects that tsunami and hurricane relief efforts will have on general corporate giving.

While the picture is not clear, and there are competing/conflicting interest, we can identify three basic questions:

First, what are the sources of Katrina Relief corporate donations? Will it come from general giving, thus reducing other grants to arts, education, health, and human service organizations?

Following the September 11th tragedies, major corporations now have budget line-items for disaster relief contributions. Some of these donations are derived from corporate charitable budgets. But others come from marketing department budgets or from the general operating budgets of CEOs and Community Relations Officers, similar to the budget line-items many companies have for public relations disasters.

Some company officials said the corporate “upside” of disaster relief donations coming from the charitable contributions line item is clear – those corporate giving officers will have substantially reduced, or no more work for the rest of the year. Those whose budgets will receive very little additional funding will use the remainder of the year planning new employee volunteer programs or developing long-awaited new giving programs.

The “downside” of charitable line-item disaster donations is just as clear –employees, consumers, neighbors and civic officials, whose contributions have been eliminated through no fault of their own, will be irate, and all of the good relationships that past contributions have created will be now be shattered or substantially diminished.

Because the downside is more immediate and effects more people than the upside, most companies will supplement their charitable giving budgets to cover existing relationships and pledges. But there will be no new or increased grants this year and probably very few next year as well.

Second, which corporations’ income will be substantially affected by the devastation, thus reducing their overall charitable contributions?

Some retailers, media companies, energy companies and manufacturers, such as McDonald’s, Knight-Ridder, Lowe’s, El Paso Energy, Amerada Hess, Burlington Northern Santa Fe, BP, Bayer, and Federated Department Stores have an extensive network of stores, plants and other holdings in the affected areas.

However insurance companies, financial services and banks, including Allstate, State Farm, USAA, Nationwide, Capital One, Ameriquest, Bank of America, US Bank Corporation, and Wachovia have billions of company dollars invested in the areas immediately affected by the tragedies.

After 9/11, federal legislation passed to protect companies from catastrophic events such as Katrina, but this protection only covers the extremes and won’t provide enough exposure to guarantee continued company contributions in other parts of the country.

We can expect that companies with smaller corporate giving programs, such as US Bank Corporations, Capital One, USAA and Ameriquest will reduce their current giving to cover these investment losses. However companies such a Bank of America and State Farm have learned to use their charitable contributions as marketing and public relations tools. They will continue at similar levels of annual giving, in spite of corporate losses.

Third, what will be the long-term effects of two catastrophic events in one year on long-term corporate charitable donation strategies?

Corporate charitable donation budgeting, priority-setting, and staffing will all be affected by 2005’s combination of tsunami and hurricane relief.

Budgeting -- Corporations will need to anticipate disaster donations and incorporate them as part of their annual giving package. If no disasters happen – great, the funds can be rolled over into the next year’s budget. But it’s very likely that global catastrophes will continue to happen annually or that other formerly lesser-known disasters will now become identified as global disasters (e.g., African famine relief). Either way, it’s a safe bet that major corporate contributions programs will be called upon annually to address a disaster of worldwide dimensions.

How will this effect less-catastrophic giving? Those corporations which have learned to use charitable giving to gratify their employees, increase their visibility, support their communities, and stimulate corporate-community interactions will continue keep their non-catastrophic charitable giving budgets at a similar or slightly lesser level of giving.

However, those companies which have little need for, or little history with such community-charitable giving interaction; will probably cutback their non-catastrophic giving budgets to pre-September 11th levels and award grants only in the areas of higher education, corporate business interests and disaster relief. Already, some companies (e.g., FedEx and CHS) have cut other giving programs in favor of one larger giving program which incorporates all types of disaster relief (hunger, natural disasters, economic downturns, employee layoffs and international security).

Priority Setting and Positioning No company can resist or avoid contributions to global disaster relief. Employees, shareholders, local relief efforts, and the competition are all expecting generous contributions. A comprehensive list of corporate contributors to Hurricane Relief that doesn’t include a company’s name is a public relations disaster for the company.

Of course, if disaster relief contributions are awarded from corporate marketing or general operations budgets, disaster donations will not affect corporate contributions at all.

Furthermore, for some companies, a single million dollar gift to disaster relief can use up a full year’s charitable giving budget. Those companies will need to switch disaster relief contributions to their marketing or general operations budgets so they retain at least some of their traditional giving programs.

On the other hand, those companies with substantially greater giving programs (e.g., Ford Motor Company or Altria or any of the pharmaceutical companies) will probably take their disaster relief gifts straight from their hundred-million dollar giving budgets, thus reducing their overall giving by the amount of their relief donations.

Local and regional companies whose disaster relief donations are not as substantial (e.g., local banks) will probably also reduce their annual giving budgets by the amount of their disaster relief donations.

Therefore, expect that mid-sized givers who need to award substantial donations for disaster relief and those companies which make disaster donations from their marketing or general operations budgets will not reduce their traditional giving programs to make way for disaster donations. On the other hand, larger companies which use their giving programs to cover disaster relief donations and smaller, local companies which make smaller disaster relief donations will reduce their overall giving budgets.

Staffing We can expect most companies’ corporate contributions staff to be involved with employee or community disaster relief fundraising drives; therefore being less accessible to other recipients and donation seekers. Coming right before the annual United Way campaign season, the hurricane relief is particularly unfortunate for workplace giving campaigns which have only recently been returning to 1990s levels of employee support and giving.

While these corporate staffing shortages may not be too bad for local charities in the short-term, hopefully, corporate management will not assume that these absences mean they can allocate fewer charitable contributions staff in long-run.

Next to those misdirected and misinformed “strategic philanthropic initiatives” that began in the late 1990s and early 2000s, lack of adequate corporate staffing is probably the greatest problem facing corporate charitable contributions programs.

Since corporate-community relationships are built not only on corporate cash, but on access to corporate people, corporations which remove or reduce the size of their community relations and corporate giving staff are hurting the very initiatives they were intended to initially support. It would be too bad if the disasters that hurt so many communities ended up also hurting the corporations which are generously supporting relief efforts.

For a current list of major corporate contributions to Katrina relief, go to:

The Chronicle of Philanthropy’s current online issue: http://philanthropy.com/free/update/2005/09/2005091602.htm

CNN Money online article dated September 15 http://money.cnn.com/2005/08/31/news/fortune500/firms_hurricane/

The Foundation Center’s Philanthropy News Digest from September 16
http://fdncenter.org/pnd/hurricane/corporations.jhtml

Bank of America to Purchase MBNA

June 30, 2005 Merger of the Week North Carolina-based Bank of America announced today it will buy Delaware-based MBNA for $35 billion. B of A anticipates $1.25 billion in restructuring costs and efficiencies including the loss of 6,000 jobs.

Beyond the purchase itself, the buyout is noteworthy because it signals the potential for further consolidation in an industry that seems to be overly-consolidated already. For example, many industry experts believe Washington Mutual, the largest US savings & loan conglomerate was too big for a take-over, but the purchase of MBNA suggests that WaMu may be ripe for the picking.

Furthermore, although it is a bank, the nucleus of MBNA’s business is its credit card operations, especially affinity credit cards. Several industry analysts believe that companies which depend primarily on credit card operations, such as American Express and Capital One, will eventually have to merge with other financial institutions. The MBNA buyout further strengthens this argument.

Current Giving Patterns: Bank of America is a leader in corporate philanthropy, awarding more than $95 million annually in nearly forty states. Like most banks, B of A has diverse giving interests and awards millions of dollars through regional and branch offices. Traditionally, about half of the bank’s funding is in education, twenty percent for human services, and about ten percent each for health, community development and arts. The bank also manages private foundations for more than one hundred clients throughout the southern and western states.

MBNA also awards most of its $50 million annual giving budget for education, especially for K-12 through its Excellence in Education program. However, most MBNA grants are awarded to groups in DE, MD, NJ, ME, and Cleveland.

Both MBNA and Bank of America have extensive corporate sponsorship, matching gift and employee volunteer programs.

Going Forward B of A reports the company “intends to build upon its previously announced 10-year, $750 billion community development goal to include a specific community development lending and investment goal for Delaware. The specifics of this goal will be determined based on future dialogue with Delaware community and civic leaders.”

Although the both banks have operations in ME, NJ, DE, and OH, the only widespread overlap has been in Maryland, where both banks have significant operations. Maryland (and other) nonprofits which receive grants from both banks should consider alternative fundraising strategies.

Besides the overlapping grants problem, the merger will probably be a good experience for most nonprofits, especially those in the MBNA areas of operation. Bank of America’s corporate culture typically has a positive affect on the giving practices on its merger partners.

For a profile of Bank of America Foundation, click here.

MBNA Foundation Profile

For a profile of MBNA Foundation , click here.

Washington Mutual Foundation Profile

For a profile of Washington Mutual Foundation , click here.

American Express Foundation Profile

For a profile of American Express Foundation , click here.

Capital One Financial Corporation Giving Program Profile

For a profile of Capital One Financial Corporation Contributions Program, click here.

Starr Foundation Board Chair Steps Down

June 10, 2005 Starr Foundation Board Chair Maurice “Hank” Greenberg Steps Down.

One of the largest insurance companies in the world, AIG was founded by C.V. Starr, a former OSS officer in Southeast Asia who parlayed his OSS and CIA connections into one of the largest import/export businesses in the world and then parlayed that business into American Insurance Group – AIG.

Fifty years ago, C.V. Starr also established the Starr Foundation, which currently has assets of more than $3.5 billion and is one of the 15 largest foundations in the U.S., just behind Packard, MacArthur and Pew, and slightly larger than Annenberg, Annie Casey, Rockefeller, Kresge, and CS Mott.

In 2004, the Foundation awarded more than 800 grants worth $160 million (down 16% from 2003), primarily in the areas of education, medicine and healthcare, human needs, public policy, and Asian arts & culture.

Eventually, Mr. Starr (uncle of Whitewater Prosecutor Ken Starr) turned over the reins of the company -- and the Foundation -- to AIG CEO Maurice “Hank” Greenberg, whose recent problems have made national headlines and involved several notables including New York State Attorney General Elliot Spitzer and the Sage of Omaha, Warren Buffet.

Although many companies get into hot water with regulators, their foundations are rarely affected by corporate scandals. Not so with the AIG/Starr Foundation relationship.

The Foundation is legally separate from the company, however the majority of Starr Foundation directors are AIG officers, including Greenberg who has served for several years as the foundation’s board chair and funding pilot. In return, the Foundation operates the company’s scholarship programs – an eight million dollar annual outlay for 900 AIG employees and their families.

In addition to the programmatic and financial entanglements (the Foundation owns at least 2.5 percent of the company’s stock), what’s attracted the attention of AG Spitzer is the fact that some grants from the Starr Foundation have been awarded to third-party organizations which have awarded grants and fellowships to Starr employees and managers.

Going Forward Because the Starr Foundation is so closely tied programmatically and financially to the company, the company’s misfortunes and misdeeds have a direct affect on the Foundation’s giving practices. Substantial funding for hundreds of hospitals, colleges, and museums will be affected and other organizations which have waited patiently in line for their chance at a Starr Foundation grant will continue to wait.

On the up-side, in addition the Starr Foundation, both AIG and its AIG American General subsidiary have corporate giving programs. Both have general giving interests including education, arts, youth, community affairs and human services.

The company’s recent advertising blitz (“we know money”) and its aggressive move into the business of auto insurance guarantees the company will retain a high profile in philanthropy.

However, it is likely the company and the Foundation’s relationship will become more detached. The Foundation will probably diversify both its board of directors and its stock portfolio, while the company giving programs will increase their corporate giving amounts and profiles. All of which are generally good things for both current and prospective grant applicants.

The Personal Note While Mr. Greenberg was heavily involved in nonprofits(such as, Council of Foreign Relations, Rockefeller University, Manhattan Institute, Asia Society, New York Presbyterian Hospital and JFK Center for the Performing Arts), his successor at AIG (and perhaps the Starr Foundation), Martin J. Sullivan has shown little interest in nonprofit work.

Born in Great Britain, Mr. Sullivan lived and worked in London until an AIG promotion tranferred him to New York in 1996. While very involved in international trade associations, so far Mr. Sullivan’s US charitable endeavors have been limited to a few benefits and general charities, such as the British Memorial Garden Trust and the Community Foundation of Southeastern Connecticut.

For a profile of the Starr Foundation current giving, click here.

For a profile of AIG Corporate Giving Program current giving, click here.

For a profile of AIG American General Corporation Contributions Program current giving, click here.

Federated Buys May Department Stores...Someday

May 10, 2005 Merger of the Week: A couple months back, Cincinnati-based Federated Department Stores (including Bloomingdale's and five regional chains: Bon-Macy's, Burdines-Macy's, Rich's-Macy's, Lazarus-Macy's, and Goldsmith's-Macy's) purchased St. Louis-based May Department Stores (including Marshall Fields, Lord & Taylor, Foley's, Filene's, and Hecht's and several bridal shops).

Before giving our impressions of the merger, we've been waiting for word on Federated's plans for May's philanthropy programs, including the foundation and several corporate giving programs. So far -- no word on the eventual outcome. But two things have happened recently that suggest Federated may leave May's philanthropy program in place for a few months or longer:

First, May Department Stores' community and philanthropy webpages have just been updated. No special news, but why update a webpage if the place is shutting down in a couple months?

Second, the FTC and SEC have recently asked for several new documents related to the merger. Such requests are not unusual for a merger of this size, but it does suggest that the final resolution may not take place during this calendar year, leaving the May Department Store Foundation with about $16 million to give away by the end of the year.

Current Giving Patterns Like most retail stores, both Federated and May award a lot of smaller grants ($1,000 to $20,000) to a lot of local charities in more than half of the United States.

While both have a diverse giving portfolio, Federated puts more money in human services, civic/community, health and the arts than May which gives considerably more to education projects. Neither awards much to environmental causes, religion or international concerns.

Merger UpshotAt some during the next couple years, St. Louis charities will feel the bite of losing the headquarters of a Fortune 500 company. And of course, communities in which Federated subsidiaries compete with May Department Stores' subsidiaries will lose at least one grantseeking opportunity.

Colleges and universities which received considerably more from May than from Federated will probably lose some grants, as will disability-related organizations to whom May Department Stores was very generous.

Not immediately, but in the next few years, we can also expect an increase of funds to arts and health organizations, a shift away from May's education funding to Federated's commitment to arts and health. Because of May's current commitment to United Way, human services funding may not shift much.

Structurally, Federated's philanthropy is very geographically diverse. Grant contacts are located in major subsidiaries' headquarters (SF, Miami, NYC, Atlanta and Seattle). So we can expect a new branch of the Federated Foundation to be located in St. Louis.

We will also see a new Federated Foundation online application form and perhaps a shift to more store-manager based giving. We wouldn't be surprised if Federated also develops a core giving emphasis, such as Target Stores' local education support program.

For a profile of Federated Department Stores current giving, click here.

Federated Buys May Department Stores...Someday

For a profile of May Department Stores current giving, click here.

April 14 2005 Looking for a grant from Nestle USA? You may be interested in what Nestle USA's CEO says about corporate giving.

In a speech to the Boston Executives Club, Peter Brabeck-Letmathe called giving something back to society a "wrongheaded idea" based on the "fallacious assumptions" that business activities are fundamentally exploitative and that free market transactions are a zero-sum game in which one party wins and the other loses.

Brabeck says "there is some good reason for corporate philanthropy", but that companies must be careful with what they give back because they are handing out money that belongs to shareholders and should do it “if it works out as a good investment”.

For a profile of the Nestle USA Foundationclick here.

Verizon and MCI Agree to Take-Over

February 14, 2005 Merger of the Week: In the third major telecommunications merger in as many months, New York-based Verizon Communications agreed to purchase MCI (WorldCom) for $6.8 billion. The merger will save bankruptcy-and scandal burdened MCI from further embarrassment and will provide Verizon with a strong international presence as well as a much larger corporate client base.

Verizon (the result of a merger between GTE and Bell Atlantic) is the largest of the remaining regional Bell companies. Verizon appears to have overcome competition for MCI from another regional Bell, Denver-based Qwest Communications which itself has several financial and scandal problems. In fact, some industry analysts predict Qwest's failure to purchase MCI may mean Qwest will soon be on the sales block as well.

Corporate Giving Verizon's philanthropy is one of the top five corprorate giving programs in the US, distributing more than $75 million in 2003. The company focuses its funding in the areas of literacy, technology, and workforce development. However, about 20% of the company's funding is awarded for arts, community development, health and other interest areas.

Verizon's funding is geographically focused in its 13-state service area, but last year the company awarded grants in more than 40 states. The company's online application process is considered one of the best of its kind.

On the other hand, MCI's philanthropy is minimal, awarding around $1 million, mostly through itsin-kind teacher curriculum and training program known as Marco Polo.

A few years ago, our study on telecom corporate giving for Racial and Ethnic communities ranked MCI dead last among the top nine telecom companies. Their most recent grants list indicates little change in this area.

Merger Upshot:Verizon has not announced plans for the MCI or Verizon Foundations. However, two things will probably occur:

(1) Verizon's international giving will increase. When American companies acquire companies with strong international holdings, their international giving usually increases to reflect the new business interests.

(2) MCI's Marco Polo program will last for another year and then disappear altogether or be incorporated into a new Verizon program.

For a profile of the Verizon Foundationclick here.

For a profile of the MCI/WorldCom Foundationclick here.

For a description of other major telcom mergers -- between SBC and AT&T and between Sprint and Nextel scroll down this page.

SBC to Purchase AT&T

February 1, 2005 Merger of the Week: As we've been predicting for the past year, former Baby Bell, San Antonio-based SBC Communications has formally announced its intention to purchase former Ma Bell, New York-based AT&T Company for $16 billion.

Formerly known as Southwestern Bell, in the last few years SBC has absorbed West Coast Baby Bell Pacific Telesis and Midwest Baby Bell Ameritech, as well as several smaller cellular communications companies into the Cingular Wireless subsidary, which it owns with BellSouth.

Corporate Giving: Once one of the most respected corporate grantmakers in America, AT&T Foundation has recently been feeling the pinch of corporate business problems. Funding has declined from $54 million in 2001 to $23 million in 2003.

Last year, former AT&T Foundation CEO Tim McClimon announced his resignation. Tim was a strong advocate of corporate funding for the arts as well as an promoter of a broad corporate funding agenda. His successor, Marilyn Resnick, a former educator and a vocal supporter of corporate support for education (especially K-12 schools) has focused the foundation's agenda in this direction.

During the last ten years, SBC Foundation has grown dramatically from a weak, under-funded corporate giving program to a powerful grantmaking presence in 30 states and in several different interest areas. The foundation's Excelerator Program annually awards hundreds of technology support grants for schools, arts, human services, community and health organizations. While foundation funding has decreased during the last three years from $106 million in 2001 to $78 million in 2003, the foundation has increased its equipment donation, employee-volunteer, and local funding programs.

The SBC Foundation continues its earlier support for higher education and human services (especially United Way), but has also moved aggressively into the arts, community development, and K-12 funding fields. The company's funding for racial and ethnic communities has also increased dramatically from less than $1 million in 1995 to more than $25 million during the 2001-02 reporting period.

Merger Upshot:Analysts say that the merger will cost 13,000 jobs and several quarters of lowered income projections. Almost certainly SBC will not maintain the two companies' 2003 combined giving budgets of $101 million, but will award somewhere in the $80 million to $90 million range during the 2005-2006 giving seasons, with declining amounts in subsequent years.

There is also bad news for arts organizations and civil rights organizations which will no longer have the strong corporate advocate and funder they once had in AT&T.

However, the worst news is reserved for New York City, where AT&T awarded nearly half its funding; and organizations in those states (especially New England, Mid-Atlantic and the Plains states) where AT&T has a funding presence but SBC does not.

For a profile of the SBC Foundationclick here.

For a profile of the AT&T Foundationclick here.

Procter & Gamble Absorbs Gillette Company

January 28, 2005 Merger of the Week: Cinncinati-based Procter & Gamble purchased Boston-based Gillette Company for $57 billion. Although plans for the Gillette Company giving program have not been reported, typically, when the P&G buys another corporation, it absorbs weaker corporate giving programs and allows stronger corporate giving programs to remain operating independently. The Gillette program is not a strong program.

The Gillette Company seems to be phasing out its foundation in favor of an unnamed corporate giving program. The foundation reports not awarding any grants during the last three years and significant sections of its tax report for the last two years are missing, including contact people, procedures, priorities and grantmaking critieria. Although the company has research and manufacturing locations in nine states, apparently only a few national groups and organizations in the company's hometown of Boston actually receive grants.

The Procter & Gamble Fund is a reflection of the company's very broad commercial interests. The Fund awards grants in more than 40 states and in more than 30 interest areas. Half of the funding is awarded for higher education, 30% for human services, and the remaining amount to arts and other interest areas.

Merger Upshot: Gillette grantees, especially groups in Boston, MA should expect a change within the next 12-18 months.

For a profile of the Procter & Gamble Fundclick here.

For a profile of the Gillette Charitable & Educational Foundationclick here.

Oracle Takes Over PeopleSoft

December 29, 2004 Merger of the Week: California-based software company Oracle Corporation announced today that is has completed the first phase of its take over of California and Denver-based competitor PeopleSoft Corporation.

After a year of struggling, PeopleSoft Corporation fired its CEO and conceded defeat to the larger and stronger Oracle Corporation, led by ubiquitous CEO Larry Ellison.

Oracle has three corporate giving programs -- an equipment contributions program, the Oracle Corporate Giving Program and the Oracle Education Foundation. All three programs have been indefinitely suspended pending the outcome of the merger and, according to the corporation, a major overhaul of its giving program to be more reflective of the company's international interests.

The company reports that it will continue its ThinkQuest school-based webpage design competition.

PeopleSoft's Corporate Giving Program has also been suspended and its webpage already marked with the Oracle Corporation logo.

Merger Upshot: Larger, more traditional organizations in the companies' headquarters communities -- the San Francisco Peninsula and Denver, Colorado -- may see some cutbacks in giving. But like most companies in the software industry, neither company is generous with cash grants or particularly expansive in contributing outside of its immediate corporate locations.

For a profile of the Oracle Corporate Contributions Programclick here.

For a profile of the Oracle Education Foundationclick here.

For a profile of the PeopleSoft Corporate Giving Programclick here.

For a profile of Oracle CEO Larry Ellison's private foundation the Ellison Medical Foundationclick here.

Exelon Purchases PSEG

December 21, 2004 Merger of the Week: Chicago-based energy company Exelon Corporation announced today that is has purchased Newark-based energy company PSEG.

Exelon alreadys owns Chicago's primary power company Commonwealth Edison and Philadelphia's electric utility PECO. Both subsidiaries continue to operate their own corporate charitable contributions programs. Compared to other power companies, neither is very generous nor very open about how much they give, how to apply or which organizations have received grants in the past.

On the other hand, PSEG, which awards grants through a foundation, has been relatively very generous ($3.6 million annually), very transparent regarding its giving procedures and its grantees. PSEG's full list of grantees is available on their webpage.

Merger Upshot: If Exelon follows its past pattern of permitting subsidiaries to continue their giving programs without disruption, grantees in the PSEG area will notice very little difference in the way the company does its charitable giving. However, PSEG's giving program is in stark contrast to Exelon's current giving practices and may be too far from Exelon's mainstream corporate culture to remain unaffected by the purchase.

For a profile of Exelon Corporation's Giving Program, click here.

For a profile of the PSEG Foundation, click here.

Sprint & Nextel Merger

December 15, 2004 -- The boards of Sprint Communications and Nextel approved merging the two companies to create Sprint-Nextel Inc., a $40 billion combination of mass market telecommunication customers from Sprint and upscale business customers from Nextel.

While Sprint awards more than $5.5 million annually, compared to the philanthropy of their larger competitors (e.g., Verizon, SBC, and AT&T), both Sprint and Nextel are extremely tight-fisted.

Historically, neither company has a tradition of generous giving. (In our 1997 survey of telecomm giving to racial and ethnic communities, Sprint ranked 10th out of 11 surveyed companies, outspending MCI by $300,0000).

Sprint's current problems with its Sprint FON division may justifiy its current lack of giving. And Nextel's base of business customers doesn't really compel the company to respond to community needs. Therefore, neither company is doing much in philanthropy, however both companies have extensive sponsorship programs.

Current Sprint Chairman and Chief Executive Gary Forsee will serve as Chair and CEO of the merged company. Typically, the CEO of a newly merged company brings his/her philanthropic tradition with them to the new corporation.

Merger Upshot: Since neither company is very generous, few organizations will notice a significant difference due to the merger. However, since Sprint is a better philanthropist than Nextel, Forsee's position as CEO of the newly merged company is probably good news for organizations receiving (or hoping to receive) support from the companies.

No final date has been set for the merger and there have been no announcements regarding the interim status companies' giving programs. In the meantime, you can visit the companies' current giving profiles at Access Philanthropy.

For a profile of the Sprint Foundation, click here.

For a profile of the Sprint Corporation Contributions Program, click here.

For a profile of the Nextel Community Connect Program, click here.

Mattel Foundation Once Again in Play

December 10, 2004 -- The world's largest toy company, Mattel Inc. announced that it has fulfilled its five-year, $62 million pledge to build and equip the Mattel Children's Hospital at UCLA and will once again be awarding general grants to children's charities and children's health-related organizations.

The company also has a corporate giving program, a toy donation program through Gifts Inkind, a Philanthropy Brand Initiative, and a small toy donations program through its American Girl subsidiary.

For the past few years, the Foundation has awarded a limited number of grants to company-related arts, education, health and human service organizations, especially in its hometowns of Buffalo, NY and Los Angeles, CA. However, the foundation announced that, beginning in January, 2005, the foundation will be accepting unsolicited proposals from its new online application process.

In the meantime, you can visit the foundation's current profile at Access Philanthropy. For a profile of the Mattel's Children's Foundation, click here.

You can also visit Access Philanthropy's philanthropy profile of Mattel's top competitor, Hasbro Toys For a profile of the Hasbro's Charitable Trust, click here.

For a profile of the Hasbro's Children's Foundation , click here. The Children's Foundation funds nationally, while the Charitable Trust focuses on New England, especially its homestate of Rhode Island

IBM Moves into Global Health Philanthropy

November 24, 2004 -- As we have been predicting for some time, now that IBM's long-time CEO Louis Gerstner has retired, the new CEO Sam Palmisano is taking a long look at IBM's philanthropy and things are changing.

IBM recently announced that the company's philanthropy will focus more resources on global health, especially AIDS. This shift should come as no surprise to people who know:

(1) Palmisano spent several years as head of IBM's Global Services group,

(2) Several new surveys indicate the American public wants greater corporate involvement in the global fight against AIDS,

(3) IBM is easily rankled by the highly visible successes of its arch-rival Microsoft, whose CEO, Bill Gates is heavily involved in global health philanthropy.

So far, the company has only donated software and hardware to launch World Community Grid, "a global humanitarian effort that applies the unused computing power of individual and business computers to help address the world's most difficult health and societal problems." But World AIDS Day is December 1st and we can expect more announcements then or shortly thereafter.

In the meantime, you can read the company's profiles at Access Philanthropy. For a profile of the IBM's Corporate Giving Program, click here.

For a profile of the IBM's International Foundation, click here.

Kmart and Sears Announce Merger

November 17, 2004 -- Kmart and Sears announced their intention to merge operations early next year. Kmart, the #3 discount retailer in the US has 1500 stores in 49 states. Sears has 2000 stores in all 50 states.

Both companies will retain their names, although Kmart headquarters will be moved from Michigan to Sears hometown in Hoffman Estates, IL. Kmart's current CEO, Ed Lambert will become Chairman of the Board of the merged company and the Sears CEO will be the CEO and Vice Chairman.

Kmart's philanthropy has been mostly on-hold since its bankruptcy a couple years back. They award some grants, mostly to local Michigan charities and recently have been awarding some cash gifts through local store managers (ala Wal-Mart). The company has also been open to contributed goods through store managers and the company's Corporate Giving Program. Areas of interest include family services, education, community development, youth development and children's services. The company does not provide a list of grants

Sears has two giving programs. The Foundation awards only two or three grants per year, primarily to the United Negro College Fund and the United Way. The corporate giving program's American Dream program donates millions of furniture, tools, equipment and appliances to organizations building homes for low income families, especially Habitat for Humanity. The company reports the campaign as a $100 million effort but provides no specific grant or contribution amounts

The merger upshot: Not much. The Kmart CEO will get to determine what philanthropy looks like and the combined company will probably keep the American Dream signature program. A few transition grants will probably be awarded in Michigan and along with a few high-visibility grants in Chicago. Most of us will probably not notice anything until a year or two after the merger, when corporate giving gets renewed attention from company managers.

In the meantime, you can visit company profiles at Access Philanthropy:
For a profile of the Kmart Corporate Giving Program, click here.

For a profile of the Sears Roebuck Foundation, click here.

For a profile of the Sears Roebuck and Company Contributions Program, click here.

Paul Allen Consolidates Six Foundations

09/01/04 -- One of the founders of Microsoft and a member of Forbes "Ten Wealthiest Americans" list , Paul G. Allen announced the formation of The Paul G. Allen Family Foundation. The single foundation was created through the consolidation of Allen's six previous foundations (The Allen Foundation for the Arts, The Paul G. Allen Charitable Foundation, The Paul G. Allen Foundation for Medical Research, The Paul G. Allen Forest Protection Foundation, The Allen Foundation for Music, and The Paul G. Allen Virtual Education Foundation).

Application guidelines and deadlines virtually remain the same. However, the foundation is shifting, adding and renaming some priorities. The new Foundation's press release and FAQ are online at http://www.pgafoundations.com/TemplateMain.aspx?contentId=59

Five of the six old Allen foundations are profiled by Access Philanthropy.

For a profile of the Allen Foundation for the Arts, click here.

For a profile of the Allen Forest Protection Foundation, click here.

For a profile of the Allen Foundation for Medical Research, click here.

For a profile of the Allen Foundation for Music, click