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Companies pour funds into disaster relief efforts



Published: Mon, January 10, 2005 @ 12:00 a.m.



Corporate giving to tsunami victims is rivaled only by post-9/11 assistance.

NEW YORK (AP) -- U.S. companies have donated more than $180 million in cash and products to assist victims of the tsunami that ravaged South Asia two weeks ago -- an outpouring some philanthropy experts say may eventually exceed corporate giving tied to the 2001 terrorist attacks.

So many corporations have joined donor ranks that the cause is increasingly seen as one that the biggest, most visible companies can ill afford to sit out.

The list is topped by pharmaceutical giant Pfizer Inc.'s gift of $10 million in cash and $25 million worth of its products.

Competitor Merck & amp; Co. is giving $3 million in cash and $7.4 million in products. The Coca-Cola Co. is contributing $10 million.

But it also includes companies with no obvious ties to the region, such as Hifn Inc., a Los Gatos, Calif.-based computer network security business that donated $100,000.

"Just about every company of every size is doing something," said Curt Weeden, president of Contributions Academy, a Charleston, S.C., company that trains managers of corporate philanthropy programs. "It really has engendered an amazing kind of response."

Companies say they're acting because the need and scope of the tragedy cannot be ignored. But their generosity also is being driven by a strong push by employees at many firms to respond to the disaster, and companies' own desire to improve their standing with consumers, experts say.

"Our reasons for doing this is not directly connected to our business," said Mark Schussel, a spokesman for insurer The Chubb Corp., which has earmarked $1 million. "I think it's more from a good citizenship standpoint."

But the outpouring is raising concerns in fund-raising circles that it could lead businesses to cut donations they would have made to smaller, local causes.

That was the case in 2002, as companies rethought their contributions after 9/11.

Swell of philanthropy

Firms downplay such worries, however, and for now, the response of companies to the disaster is drawing attention primarily for its largess, which has been topped only by the $410 million pledged in 2001 by businesses and their foundations after the Sept. 11 attacks.

"There was this follow-the-leader scenario [after 9/11] and corporations that had never made a $1 million gift were making million dollar gifts ... because they didn't want to appear out of touch with the needs of the country," said George Ruotolo Jr., vice chair of the American Association of Fundraising Counsel, an association of fund-raising consulting firms.

"The same thing is going to be happening here," said Ruotolo, who also is chairman of Ruotolo Associates, a Creskill, N.J., fund-raising firm.

Corporate philanthropy experts say the figure likely will swell in coming weeks as firms fulfill pledges to match employee contributions, and still more businesses join or increase their gifts.

Weeden estimates corporate tsunami donations could eventually reach as high as $750 million -- based on an assumption that companies will earmark roughly 5 percent of their total charitable gifts for the year to the cause.

That would far exceed donations after Sept. 11.

Other observers, including Charles Moore, executive director of the Committee to Encourage Corporate Philanthropy, doubt the total will reach that high.

By the end of last week, at least 142 U.S. companies had publicly announced $182.7 million in donations or pledges to assist tsunami victims, according to a tally compiled by The Associated Press. The donations include $89.9 million in cash, $25.8 million in matching funds and at least $55 million in products and services.

The list does not include gifts by smaller companies that have likely gone unnoticed, as well as some very large contributions reportedly made by firms that would not publicly confirm them.

It also does not include contributions by numerous overseas firms, although it does include donations made specifically by U.S. subsidiaries of international firms.

Other contributors

Corporate contributions are just one piece of a large and complex collage of aid. Governments of numerous countries and international organizations have pledged at least $3.45 billion, according to a tally by the AP. That includes a donation of $350 million by the United States.

Individuals have also offered an untold amount of aid, most of it in small pledges by ordinary people, but also including large donations by celebrities, private foundations, and wealthy individuals.

One sign of the broad-based nature of the giving: More than 183,000 customers of Amazon.com have donated $14.9 million to the American Red Cross relief effort.

The current tsunami death toll of at least 150,000 is likely to rise, and preventing further deaths and rebuilding the areas hardest hit could take many years. As those future needs become evident, no one -- companies included -- can really say how they will respond.

"When we sat down ... we didn't say we're going to do this today before we do this later. We said we're going to respond to this immediate need," said Audrey Lincoff, a spokeswoman for Starbucks Corp.

The company has donated $100,000, but expects that will surpass $1 million once matching donations and a percentage of sales of its Sumatra coffee -- imported from the Indonesian island devastated by the tsunami and the earthquake that preceded it -- are added.

Goodwill effort

The breadth of corporate generosity may reflect changing attitudes by companies and consumers.

In a survey on corporate citizenship conducted in October, 22 percent of the consumers queried said they wanted to see companies focus globally in solving social problems. That was up from 9 percent who gave the same answer in 1997, according to Cone Inc., a Boston consulting firm that conducted the survey.

Companies have taken notice, increasingly working to make targeted donations that help build goodwill associated with their brands, observers say. That is particularly true in the past few years, as companies try to rehabilitate images tarnished by corporate scandals.

"More and more Americans are looking to how companies respond to social and issue causes as part of the way they judge them," said Mike Lawrence, executive vice president of Cone, which works with businesses on their charitable giving strategies. "Are companies doing this for self-interest? The answer is, to some degree, yes. Is that bad? I don't think so."

Generous employees

In addition to consumers, the impetus to give has also come from employees at many firms. Starbucks said it has fielded scores of calls from its workers, with questions not just about their own donations but whether they could accept them from customers.

When Intel Corp.'s foundation announced last week it would match employee donations, employees gave $200,000 in just the first day.

"In the last five years ... employees realized they have clout and pushed companies to do things," said Stacy Palmer, editor of The Chronicle of Philanthropy.

But as companies seek to do good with dollars now, other causes may come up short later, say those who work in philanthropy and fund-raising.

"I can feel it in the air. This kind of event creates nervousness in the sector," said Brian Gallagher, president and chief executive of United Way of America. "Folks don't like to say it because it doesn't feel like the right thing to say in the middle of the event."




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