In 2005, when Gillette was bought by Cincinnati-based consumer products giant Procter & Gamble, local nonprofit professionals sounded an alarm over the razor-maker’s local philanthropy: The grooming company’s roots in Boston date back to 1901, and it was the region’s fourth-largest corporate charitable giver that year contributing 7.1 million.
Today, Gillette continues supporting Boston-area nonprofits, but last year it ranked just 41st on the list of the largest charitable contributors. Its support dropped by 80 percent in 2022.
Members of the nonprofit community have long feared that corporate acquisitions that move a headquarters out of state would hurt local giving. A Business Journal analysis of two decades of philanthropic giving to Massachusetts nonprofits shows that philanthropic giving does in fact decline in many cases once a corporate executive suite moves hundreds or thousands of miles away. At best, local nonprofit leaders and experts say that support from the business community, when it continues over a longer distance, becomes less predictable.
Nonprofits that have benefited from local corporate largesse told the Business Journal that in the long term, reliable corporate partnerships are rare, leaving them wary of relying on corporate giving to fund programs that will require support over multiple years. Nonprofits typically rely on corporate giving for a fairly small portion of their fundraising but value longer-term relationships.
Boston-area companies that have been acquired stressed that they maintain nonprofit partnerships that sometimes stretch back decades, and that they strive to keep their local philanthropic commitments.
Not all corporate giving drops when a local business is bought by an out-of-state acquirer. Some remain among the strongest corporate donors related to peer companies for years after being acquired.
Bank of America, which bought FleetBoston in 2004, is still among the most generous to Massachusetts nonprofits. In fact, the company’s annual giving has increased from $10 million in 2004 to more than 11 million in 2022. John Hancock, which was acquired the same year by Canadian-based Manulife. increased their support to local nonprofits by about 25%, from 5 million in 2003 to 6.2 million in 2022.
Cases such as Bank of America and John Hancock show how a headquarters location isn’t all that matters in giving, said Jim Hoopes, a business ethics professor at Babson College.
“The attitude and habits that the acquiring company brings to the merger, I suspect, is a more decisive factor than the location,” Hoopes said.
A company can choose to give to a nonprofit for a number of reasons, like CEO affinity or mission alignment, experts said. And companies want to look good in the communities where their employees reside and their hubs of business live, said Cynthia Clark, a corporate governance and social responsibility professor at Bentley University.
“New technology has allowed companies to democratize philanthropy so that they can give more strategically in certain areas that they need to give, especially these large companies,” Clark said.
Corporate philanthropy experts said how companies give has been in flux thanks to a range of factors. The old idea of a company town — think Anheuser-Busch in St. Louis — is rare.
“They were the lifeblood of the community,” said Una Osili, the associate dean for research and international programs at the Lilly Family School of Philanthropy at Indiana University. “Today, that looks very different.”
Companies tend to have employees and customers across much of the country or the world, Osili said, pushing them toward a more global view of where to spend their philanthropic dollars.
ExxonMobil has a headquarters outside Houston, for example, Osili said, but has a presence in oil-producing countries over the world. It has made malaria a signature philanthropic cause, something that affects sub-Saharan Africa most acutely.
AB InBev, which bought Anheuser-Busch in 2008, launched a $1 billion initiative to support responsible drinking in 2015. Leslie Crutchfield, the executive director of Georgetown University’s Business for Impact, called it an example of the company using its corporate social responsibility capital on a single, worldwide cause. Only one of the initiative’s six local pilot locations was in the United States, in Columbus, Ohio.
“The local company’s operations have to be rationalized and aligned with the priorities of the national company,” Crutchfield said of the philanthropic effects of an acquisition.
Companies’ best bet is to balance those broader initiatives with more local ones that may be long-running, Crutchfield said.
“You can’t just stop doing locally-driven giving,” she said. “It’s not smart to cut off that local giving and have it all moved to a national campaign.”
In the Boston area, nonprofits and experts describe their corporate donors as being focused on making a local impact.
Radhames Nova, the president and CEO of Junior Achievement of Greater Boston, said his corporate donors rely on JA to help them meet the needs of the community while focusing on young people, the future workforce.
Mardi Fuller, director of external relations for education nonprofit Boston Plan for Excellence, said being in Boston is a big part of receiving support from Boston-based businesses. “The companies who want to support us have an interest in Boston and Boston-based talent,” Fuller said.
One of the factors that influences giving is the Community Reinvestment Act, a federal law that encourages financial institutions such as banks to meet the credit needs of low- and moderate-income neighborhoods in communities where they have a presence.
“Banks really love us,” said Meralis Hood, CEO of entrepreneurship nonprofit EforAll, based in Lowell.
But the relationship between giver and recipient can also fluctuate from year to year. For nonprofits, it can be a guessing game when it comes to funding renewal.
“They’re always trying to vie for attention and it’s a puzzle piece,” Clark, the Bentley professor, said of nonprofits. “You need to rearrange the puzzle pieces every year to get a good match.”
Nonprofits Chase Corporate Givers
Access to the philanthropic arms of larger companies is more accessible to larger nonprofits with more development resources. Relationship building takes time and resources, nonprofit leaders say. But most nonprofits are small, with 97% of all 501c3 organizations operating with a budget of less than $5 million, according to the National Council of Nonprofits.
“A lot of corporations have favorite people and then they give to those people and then it is sort of a closed shop,” said Mike Oliver, director of St. Mark Community Education Program, a nonprofit that assists with citizenship obtainment and English language classes for new immigrants.
“The bigger an institution gets, the more it wants to hang out with big institutions, bigger places, they don’t want to deal with small places like us,” Oliver said.
Carl Alves, the chief executive of PAACA, a New Bedford addiction recovery support center, said he doesn’t count on grants long-term.
“We don’t want to put ourselves as an organization where we are over-extended,” he said. Small nonprofits such as PAACA or St. Mark have fewer staff members to focus on building trust with local corporations. That can make such relationships more transitory.
“If it was a deeper relationship, as opposed to a transactional relationship, in terms of really working together to solve a problem in a real way as opposed to grantor and grantee, then we’d be able to do more,” said Alves.
Local nonprofit leaders say that most small and midsize nonprofit budgets have less than 10% to 15% of revenue from corporate giving. Boston Plan for Excellence’s corporate revenue stream, for example, is 10% most years. EforAll’s corporate revenue is 11%, it said.
“We’ve got to find ways that make sense for corporate America to give on a sustainable basis,” Alves said. “So it is parsed out equitably and with a plan, and not just a photo opportunity with the big check.”
“(Corporate executives) want to give back,” said Junior Achievement’s Nova, “but the challenge is that there’s so much to do, and it takes so much work to engage the community.”
This article was reported through a fellowship supported by the Lilly Endowment and administered by the Chronicle of Philanthropy to expand coverage of philanthropy and nonprofits. The Boston Business Journal is solely responsible for all content.