Economy may crimp corporate giving

10/27/2001

Findlay's Cooper Tire & Rubber Co. understands the balance between being a good corporate citizen and creating shareholder value, but when the auto industry skids as it has this year, the Findlay company must favor investors over charitable giving.

The tire and auto parts maker isn't changing plans to donate close to $1 million through its corporate foundation this year. Cooper Tire, in fact, is contributing $61,000 on top of those scheduled donations to add to $39,000 raised by employees to help victims of the Sept. 11 terrorist attacks.

Next year, though, the company will reduce its charitable contributions by an as-yet undetermined amount, a spokesman said.

The slowing economy and Sept. 11 contributions to the American Red Cross and other causes are affecting what some local businesses expect to donate to local charities. Companies have budgets set for this year, so the real test for corporate giving will be 2002, said Mark V'Soske, president of the Toledo Area Chamber of Commerce.

“If there's going to be a slowdown, it will probably be next year,” he said.

Like Cooper Tire, Toledo auto supplier Dana Corp. doesn't plan to alter giving plans through its foundation for 2001, but the area's largest company is reviewing next year's allocations, said spokesman Gary Corrigan.

Dana - which recently laid off 12,000 workers and is trimming 11,200 more - donated $100,000 to the American Red Cross's Sept. 11 fundraiser through its foundation on top of $90,000 from employees. It doesn't release the total amount given annually.

Meanwhile, Toledo's Owens Corning typically holds a golf tournament with suppliers and includes the proceeds in its United Way of Greater Toledo campaign, but neither happened this year. The outing wasn't held because of the Sept. 11 tragedy, but suppliers didn't withdraw their donations totaling about $90,000, which were given to the Red Cross's relief efforts, said spokesman Gregg Bronk.

Still, employees should be close to on target with their contributions for the United Way this year, Mr. Bronk said. OC can't donate money to charities because it is in Chapter 11 reorganization, although its foundation can.

While charities nationwide wonder whether generous disaster-relief donations will put a dent in contributions already tested by the stumbling economy, some experts said it's hard to predict how the biggest giving season will turn out this year.

Some companies made large Sept. 11 donations and now want to see what they can do in their own communities, although there is only so much money available, said Cheryl Kiser, director of membership and marketing for the Boston College Center for Corporate Community Relations.

“Everybody is watching and waiting because I think it's still to early to tell,” she said. “I think it's more fear than reality based at this point.”

Locally, the United Way's campaign will be an early indicator of how corporate giving will fare, said the chamber's Mr. V'Soske. Dana and some other companies give $1 for every $1 employees donate.

The United Way expected last year's donors would fall $500,000 short because of layoffs, closures, and other changes, but the agency added some businesses to campaign and found ways to generate more giving, said Bob Lucas, the United Way's executive director.

This year, for example, the United Way started a women's initiative in hopes of getting more money from donors and new contributors, Mr. Lucas said. Those funds will be used for children's activities and programs, and more than $100,000 has been raised so far, he said.

Last year's United Way campaign raised $14.5 million, and the agency hopes to hit $14.7 million this year, he said.

“We're cautiously optimistic that the campaign is going to be OK,” Mr. Lucas said.

Toledo's Manor Care, Inc., expects to have its best United Way campaign yet, both in terms of the amount of money to be contributed and the number of employees participating. The nursing-home company, which hasn't been hurt by the softening economy, matches employee contributions $1 for $1 and made $335,000 in contributions for various senior citizen-related causes through its foundation this year, said spokesman Rick Rump.

“There really hasn't been any conscious effort to change anything,” he said. “Our business is doing well. At this point we don't expect any change [in giving next year], but that's today.”

Other area companies also don't expect a change in their annual contributions either through their foundations or directly, including Toledo's Owens-Illinois, Inc.; Tecumseh Products Co.; Bowling Green's Sky Financial Group, Inc.; and Archbold's Sauder Woodworking Co.

“It's pretty much a status quo here, and it's really been that way for a number of years. ... We haven't pulled back or accelerated,” said David Kay, Tecumseh Products' vice president, treasurer, and chief financial officer. The compressor and engine parts company donates hundreds of thousands of dollars annually and donates through the Herrick Charitable Trust.

Sauder Woodworking's contributions don't rely on how the economy is doing, said Kevin Sauder, president and chief executive of the Archbold ready-to-assemble furniture company. In addition to this year's planned giving, which he declined to enumerate, the firm recently matched employee contributions to Sept. 11 funds $1 for $1, raising more than $55,000 all together.

“When it comes to corporate giving ... you have to have a long-term-commitment mindset,” Mr. Sauder said. “The organizations that you donate to depend on that.”

Corporate giving nationwide has hovered around 1 percent of pre-tax profits for most years since 1970 and has never exceeded 2.1 percent, according to the American Association of Fundraising Counsel, Inc., in Indianapolis.

Some companies will reallocate money for Sept. 11 funds within their usual giving levels, while others may see the acts as personal attacks on American business and react with an at least one-time increase, according to the association.

Even if companies donate less money to local charities, they can make other contributions to non-profit organizations, said Ms. Kiser of the Boston College center. They can mobilize volunteers, donate products and technology, lend executives, and make other moves, she said.