Win-Win Philanthropy

The chemical and pharmaceutical industries donate hundreds of millions of dollars each year--as well as time, intellectual property, and equipment--for local and international efforts that improve communities, address global crises, and curb the spread of disease.

These gifts benefit both the recipients and the companies themselves. Corporate citizenship efforts can increase a company's prestige in the community and can spread word of unique know-how or notable products. Donating at the local level makes recruiting easier, and education programs ultimately raise the quality of future employees. And most chemical companies are now international entities, with an ever-increasing and vested interest in addressing a variety of issues around the world.

"It's a win-win situation for both Pfizer and the nongovernmental organizations we help," says Paula Luff, the company's senior director of international philanthropy. In particular, she is referring to the Pfizer Global Health Fellows program, which sends company employees abroad to lend their expertise to nonprofit institutions. "At first, we thought these volunteers would contribute far more than they would learn, but they come back with interesting new perspectives and insights into their jobs."

But acknowledging the need for--and the benefits of--philanthropy is just about where the similarities among company programs begin and end. Not only do focus areas differ greatly among companies, but so do methods for setting funding levels, selecting sites and organizations for partnerships, and responding to changing needs.

For example, Pfizer's philanthropic efforts consist of a unique mesh of its company focus and collaborative necessity. The company concentrates on "making a measurable impact on the health and well-being of communities in need, in areas in which we have expertise," Luff says. "That includes increasing access to health care; enhancing access to medicines, especially for low-income patients; and strengthening the organizations that support these efforts." In 2004, she says, Pfizer donated $71 million. The Pfizer Foundation chipped in an additional $27 million, and the company also made an estimated $1.16 billion in product donations.

In general, Pfizer works in partnerships with other organizations. "The health issues we work on are clearly very complex. We bring a lot to the table, but we don't bring everything," she says.

For instance, Pfizer has contributed hundreds of millions of dollars to its International Trachoma Initiative, a program designed to eliminate trachoma, which causes blindness and is common in the developing world. Incidence of the disease has been reduced by 95% percent in Morocco and may even be eliminated there, Luff says, and collaboration with partners, such as the World Health Organization and UNICEF, is just as important to the program's success as Pfizer's initiative and support. "This is truly a partnership, with everyone contributing," she adds. "Otherwise, we're not going to get these results."

"Philanthropy is an element of good corporate citizenship. We strive to help improve the communities in which we live and work, and in which our neighbors live and work."

OTHER COMPANIES focus on improving the communities near company sites. "In our view, philanthropy is an element of good corporate citizenship," says Bo Miller, Dow Chemical's public affairs director for corporate citizenship and global contributions in Midland, Mich. "We strive to help improve the communities in which we live and work, and in which our neighbors live and work."

The company's philanthropy efforts, Miller says, are broadly channeled though a committee of high-level executives and then doled out to company locations on the basis of need. In 2004, that support included $17.1 million, in addition to materials and employees' volunteer time.

DuPont takes a different approach to secure funding and divvy up resources. "Contributions to organizations are made by a number of sources within DuPont," company spokeswoman Michelle Reardon says, including DuPont businesses, its Office of Education, and local offices. DuPont, she says, focuses broadly on "programs and organizations that address social progress, economic success, and environmental excellence--all vital components of community sustainability."

Like a number of corporations, ExxonMobil has established a foundation that is tied to, but distinct from, the main company. The foundation administers the bulk of ExxonMobil's philanthropic efforts, which will include $120 million in charitable cash contributions in 2004-05. ExxonMobil priorities are education, health, the environment, and public policy, says Gerald W. McElvy, president of ExxonMobil Foundation.

The oil and petrochemical company's obligations dot the globe. "We strongly support economic health where we work and operate facilities, and that includes 200 countries and territories," McElvy says.

"We tailor our programs to meet local needs or the needs of the countries we will be operating in," he adds, pointing out a program ExxonMobil has started in West Africa to spread basic education to a wider population, particularly to young girls.

Bayer's Pittsburgh-based U.S. arm, which also funnels most of its contributions through a foundation, is another indication of the increasing globalization of the chemical industry and its philanthropic programs. Spending for everything outside the U.S. is channeled through the company's main headquarters in Germany, so the Bayer Foundation's annual donation of $3 million to $4 million--including approximately $1 million for science education--goes solely to U.S. sources, says Rebecca Lucore, the foundation's executive director.

Community improvement is also a guiding theme for Bayer, which has strict giving guidelines that focus on arts and culture education, science education and workforce development, and civic and social service programs. The budget is set at the beginning of the year, Lucore says, and then portions are allocated to Bayer sites to fund local efforts in each community. Of particular interest, she points out, is the Bayer Center for Nonprofit Management in Pittsburgh. "It's an organization that exists to provide services to nonprofits to become more sustainable," she says. "Because we deal with so many nonprofits in Pittsburgh, this way we can see that our money is spent in the best way possible."

Science education, in particular, continues to be a major focus of funding for most chemical companies. ExxonMobil supports higher education by matching employee contributions three-for-one; last year, this resulted in $20 million in contributions to colleges and universities. Another notable program aims to train teachers, particularly of grades three through five, in improved methods for teaching math and science. "Research has shown that where many children check out from activities that lead to math and science careers is in grades three through five," McElvy says. DuPont's Office of Education also makes a number of grants geared toward programs at the primary, secondary, and higher education levels.

At all of those companies where local community improvement is a major priority, volunteer efforts by employees and customers are a vital component of philanthropic support and often the easiest and most direct method for employees to contribute. Many companies encourage employees to donate time and effort to local organizations and provide extra monetary support for community charities.

At ExxonMobil, for example, McElvy estimates that employees contributed more than 650,000 volunteer hours in 2004, a number bolstered by the company's individual charitable grants program, which provided nearly $8.5 million in small grants to some 4,000 community organizations. DuPont also supports its employees who volunteer through a similar program, the DuPont Community Fund, as well as recognizing notable efforts with Volunteer Recognition Grants. These are $1,000 grants to organizations with which employees volunteer.

"The most direct and personal way to create an impact is through our own efforts and our own volunteerism," Dow's Miller adds. For more than 20 years, the company has supported Habitat for Humanity, both in North America and across the globe. Dow's contributions to Habitat for Humanity include individual employee participation, money, and donations of construction material.

Pfizer's Global Health Fellows program, which loans employees with health care expertise to nonprofit organizations for four to six months, is also notable. The company underwrites all the associated costs--travel, housing, wages--even keeping volunteers' positions open until their return. More than 50 people have participated so far. The program's unique nature makes it more selective than most company volunteer programs. "We tend to look for ways that our employees can get involved in specific ways," Luff says.

Money and employee time are hardly the only things companies contribute as part of their philanthropy efforts. "DuPont has programs to both donate and lease intellectual property," Reardon says. "This is primarily in the form of patents that are donated to colleges and universities; this approach enables university scientists to pursue the application of patents in areas where DuPont may not have a commercial interest or opportunity."

"WE DONATE intellectual property on some occasions, but it's not common: Some enabling tools or IP we don't intend to commercialize," Dow's Miller adds. "We deal similarly with real estate. This actually happens a little more frequently; in Midland, for example, we donated some land for soccer fields."

For some companies, like ExxonMobil and DuPont, maintaining an even level of philanthropic funding is essential, despite the chemical industry's cycles. Others take a different approach. Dow's Miller acknowledges that giving levels dropped during some "pretty challenging economic times for us" around 2000, though they are on an upswing again. The Bayer Foundation, tied to an endowment, also cut funding around that time.

That's a reminder that the prime focus for chemical companies, like all corporations, is, and will remain, making money. But there are important moral as well as practical reasons for corporate philanthropy, and both sides of the equation benefit. "Helping others is an important part of the core values for DuPont," Reardon says. "And, by extension, we believe those efforts are vital to the success of our businesses around the world."