United Way Targets Asian and Small Firms for Funds

United Way of Greater Los Angeles, which usually relies on the largest local employers to provide most of its donations, will undertake what officials call a “high-risk” effort and target foreign companies and more small businesses next week when it begins its 1989-1990 campaign.

The 70-year-old organization has tapped businessman Okitami Komada, to head a new drive to solicit contributions from Japanese companies during the six-month-long fund-raising campaign that begins Sept. 20. United Way will also vastly expand its efforts to reach smaller businesses--including those owned by Korean, Thai and Chinese interests--by enlisting about 10,000 volunteers from the 334 member agencies that it funds.

The change in strategy, officials said, reflects a growing concern that consolidations and cutbacks among the nation’s largest corporations are slowing donations at a time charities are already coping with government cuts in social spending and federal laws that reduce the tax advantages of some donations.

In going after unusual new funding sources, United Way--which received just 28% of its $88.3 million in total donations last year from corporations--will test its ability to cope with the growing ethnic diversity among both its donors and the nonprofit agencies that it funds.

“This is a high-risk campaign,” said Leo P. Cornelius, president of United Way. “We have to take a revolutionary approach (to fund raising) this year . . . because we are anticipating that we can’t rely as much on the big corporate accounts that have sustained us in the past.”

Corporate Giving Falls

“Sixty-five percent of the people United Way now supports through its member agencies are people of ethnic minorities,” Cornelius said. Yet until recently, United Way’s annual fall campaigns were headed, he said, by a group of “mostly white, male businessmen from the old boy network” of executives working at large Southern California companies.

A survey being released this month by the Southern California Assn. for Philanthropy says total giving by 108 of the Los Angeles area’s largest companies and private foundations, fell to $263.1 million from $266.8 million in 1987, the first drop since the survey began in 1984.

Nationally, business enterprises, including foundations created by companies, donated $4.7 billion. That’s a 3.2% rise over 1987 but, after adjusting figures to account for inflation, corporate giving showed no growth, according to the American Assn. of Fundraising Counsel in New York.

The slowdown in corporate giving comes despite a seven-year national economic expansion that has produced record profits and stock prices in most industries in the past 12 months. But officials say they are fearful that if special efforts aren’t made to enlist the support of entrepreneurs and, especially, the hundreds of foreign-based companies that have opened offices in California--there could be a big slump in business donations in future years.

“We have typically viewed philanthropy as something that is the province of big corporations and the white middle class,” said Emmett D. Carson, as assistant program officer at the Ford Foundation who recently completed a study on philanthropy. “That (perception) will have to be challenged in the coming years as other groups become a force in our society.”

It won’t be easy to reach out to the foreign companies, experts say.

Japanese companies are just beginning to become “aware of the necessity of developing good corporate citizenship in the communities in which they operate,” according to a recent report by the Japan Federation of Economic Organizations, or so-called Keidanren.

Realize Importance

“It is not going to be an easy task,” said United Way’s point man Komada, who is chief executive of Mitsui Sudosan, the Los Angeles-based subsidiary of Mitsui Real Estate Development Co. in Tokyo and the first Japanese-American to serve on United Way’s board. “Charitable community activity is not common in our country. But I think Japanese recognize it is a very important thing in this country.”

However, several well-known Japanese-based corporations have taken a more active philanthropic role in the United States.

Hitachi, Honda, Panasonic and Toyota, among others, have set up their own nonprofit foundations in recent years. And calls for Japanese businesses to increase charitable contributions in the United States surfaced this spring in Los Angeles at the Japan-American Conference of Mayors and Chamber of Commerce Presidents.

Toyota’s foundation, which was launched in 1987 with a $13-million endowment, recently gave $500,000 to the Japanese Pavilion at the Los Angeles County Museum of Art. And this fall, Toyota is also chairing a United Negro College Fund telethon for the first time, according to Art Garner, manager of community relations.

“It’s very good thinking to be looking at these special kinds of initiatives,” said Richard Van Horn, chief executive of the Mental Health Assn. in Los Angeles who has been involved with United Way’s efforts to reach out to more small businesses and foreign companies. “It’s a matter of overcoming an entire set of cultural attitudes.

“Most of charities in town are not used to going after foreign companies and the (foreign) companies are not used to giving,” continued Van Horn. “They are not anti-charity, it’s just that in their own countries the government” fulfills the need that in the United States is met by employee and corporate philanthropy.

Although United Way is focusing nearly all of its new efforts on Asian-based firms, some critics say an equal amount of attention should be focused on European-based companies who make up the lion’s share of foreign investment in the United States.

Since the beginning of 1989, for example, Europeans have moved to purchase 164 U.S. firms worth more than $28.9 billion, according to IDD Information Services in New York. Japan and its Asian neighbors agreed to buy 34 companies during the same period, worth just $4.1 billion, a small fraction of Europe’s U.S. haul.

United Way officials said they could not immediately determine how active Europeans firms are in the annual giving campaigns. However, they noted that several well-known European-owned firms, including Los Angeles-based Carnation Co., which is now a subsidiary of Nestle SA of Switzerland, have participated in previous years.