At a July 28 reception, the Amoco Foundation inaugurated its Leader Awards by giving a total of $200,000 to Chicago non-profit groups trying innovative approaches to problems in their low-income neighborhoods.
Some 150 people, including several city and Cook County officials, attended the event at Amoco Corp. headquarters in Chicago. Speakers respectfully noted that the foundation is this city’s largest corporate philanthropy and that it plans to give away about $5.5 million in this area out of more than $19 million worldwide in 1994.
Left unsaid was that the foundation’s giving is down sharply from its peak year of 1991, when this area received $7.5 million out of a worldwide total of $26.5 million, and that it is expected to fall again next year, although donations in the Chicago area may hold steady.
In addition, the foundation’s staff has been cut-from 14 in 1992 to 9 earlier this year and 6 now-and its grantmaking has been streamlined and tailored more to its corporate parent’s needs.
“We re-engineered the foundation,” said its executive director, Patricia D. Wright, in a recent interview. She said the changes reflect what is going on throughout the world of corporate philanthropy, and especially at Amoco.
One week before the awards reception, Amoco disclosed its latest cost-cutting response to low oil prices and flagging profits: the planned elimination of 4,500 jobs companywide by the end of 1996.
As Amoco delivered the bad news here, Los Angeles-based Atlantic Richfield Co., another beleaguered oil giant, dismissed most of the staff at its Arco Foundation, including President Eugene Wilson, and said giving next year would likely drop from the $12.5 million budgeted for 1994. The foundation has been considered a pacesetter in corporate philanthropy, and changes there have sent shock waves through the non-profit world.
But it isn’t just financially squeezed companies that are changing their philanthropic ways.
“It’s happening all over,” Wright said. “Everyone is asking, `How do you become more efficient and fund smarter?’ “
According to “Giving USA,” a widely quoted annual report on philanthropy, corporate giving has been close to $6 billion a year since 1991; however, adjusted for inflation, it has declined every year since 1987. (In 1993 corporations provided 4.7 cents of every charitable dollar. More than 80 percent of all giving comes from individuals.)
Corporate giving as a percentage of pretax income has dropped from 1.9 percent in 1989 to 1.3 percent in 1993; the figure for Amoco has averaged 1.1 percent in recent years. Some foundation officials say the national decline reflects bad times in certain mature industries and a less-institutionalized approach to philanthropy among younger firms in growth fields.
“These are not the best of times for corporate giving,” said James A. Joseph, president of the Washington-based Council on Foundations. He said corporations seem to be shaping their philanthropy “to maximize the impact of their charitable dollar.”
In his recent Harvard Business Review article on “the new corporate philanthropy,” Craig Smith, president of a Seattle think tank called Corporate Citizen, described how some major corporations have tied philanthropy to business interests. He said they have involved their marketing and public relations departments in grantmaking, increased donations of products and services and encouraged worker volunteerism.
Today’s corporate citizens, he wrote, “hunt for a reconciliation of their companies’ profit-making strategies with the welfare of society, and they search for ways to steer all parts of the company on a socially engaged course.”
Some of the “new philanthropy” can be seen at the Amoco Foundation, which has been on an efficiency kick since Wright became executive director in September 1992.
As its staff in Chicago declined, the foundation began to delegate grant-reviewing authority to committees of Amoco employees, who are compensated for doing foundation work part-time.
In addition, the foundation turned over the employee gift-matching program and its paperwork-heavy administration to a New York firm, System Builders, about 18 months ago.
The foundation also reduced the number of grants awarded annually and shifted some to mirror the corporation’s hiring needs. For example, Wright said, grants for medical research and liberal-arts colleges were halted in favor of funding schools emphasizing science, engineering and business.
“We used to fund 126 colleges,” Wright said. “Now it’s between 40 and 50 across the U.S.”
In the Chicago area, the foundation’s concentration continues to be on education, economic development, housing, youth and health services and culture.
Recognizing that it couldn’t give meaningfully to all the non-profits in this area, the foundation this year decided to shift money into five neighborhoods: Pilsen, Grand Boulevard, Roseland, Austin and Humboldt Park.
Wright said that about $1.5 million in grants will go to those neighborhoods in 1994.
The $200,000 Leader Awards program was created, she said, to recognize the work of groups elsewhere in the city.
Wright said the foundation probably will give away more than $19 million this year while Amoco’s operating units donate another $6 million. She said the foundation’s giving could drop $2 million or $3 million next year, but company giving should be flat.
She said giving in the Chicago area should remain at about the $5.5 million level of 1994.
“Our commitment to Chicago remains strong,” she said. “We are a major player and will continue to be. I hope we’re doing it in a smarter way.”
