REGIONAL REPORT : Japanese Businesses in U.S. Refocusing Philanthropy : Culture: Donations to arts and education are on rise. ‘Good corporate citizens’ seek broader community base.

When Mayor Tom Bradley kicked off the Los Angeles Festival in San Pedro earlier this month, he stood behind a podium draped with the name of Occidental Petroleum Corp., a sponsor of the event since it was launched in 1984. The oil company’s chairman, Armand Hammer, also was on hand to speak.

Less visible to the public, however, has been the role of one group of executives whose support was considered crucial to this latest festival--the Japanese business community. For the first time, 42 Japanese companies, from Aisin U.S.A. to Yamaha Motor Corp., contributed a total of $1 million, or about 20% of the budget, for the two-week series of performances and art exhibits focusing on the Pacific Rim. The festival ends Sunday.

Maureen A. Kindel, chairwoman of the festival, said the decision by Japanese business leaders to provide an infusion of money that was “not normally available to us” came when fund-raising prospects otherwise seemed bleak.

“Without that commitment, there would be no festival,” Kindel said in an interview.

What was a bonanza to the festival was also an important development in Japanese philanthropy--one that is being eyed by cash-poor, nonprofit groups ranging from public television stations to fledgling theater companies. By championing an event that is both multicultural and non-traditional, the Japanese executives were not only helping to promote their own country but also signaling a new interest in building bridges to other ethnic communities.

Almost unknown until five years ago, Japanese corporate giving to the arts, education and philanthropic causes has been increasing rapidly, fueled by deep worries about American hostility over the trade imbalance and such high-profile investments as Sony’s acquisition of Columbia Pictures.

Until very recently, Japanese contributions to the arts and education were largely restricted to major upscale institutions such as the Music Center, efforts to help Americans understand Japan--touring Kabuki theater or bunraku puppet shows--and endowed university chairs in science and engineering.

But now, a new focus is slowly being added. Japanese companies, stung by criticism for not hiring enough minorities and women, are being told that being a “good corporate citizen”--the phrase of the moment--involves understanding the complexity and diversity of American society. Consequently, dollars earned in the United States by Japanese companies are starting to trickle in to mural projects, community-based cultural centers such as the one under construction in Torrance, and enrichment programs at inner-city schools.

Nowhere is this emerging trend more obvious than in Southern California, according to Craig Smith, editor and publisher of the Seattle-based newsletter Corporate Philanthropy Report, and others. “What’s distinctive about Japanese funding (here) is that it’s spreading from the elite centers to more community-based organizations,” he said. “We’re seeing a linkage between the Japanese and their ethnic constituencies.”

A country with no tradition of philanthropy, Japan is now modifying its tax laws in order to stimulate more donations and make Tokyo officials more responsive when requests come in from U.S.-based executives. Both government and industry have dispatched representatives to study American giving practices. As further encouragement, 100 companies announced last spring they would contribute 1% of their net earnings before taxes to philanthropic causes.

Smith estimates that Japanese companies will dole out $300 million this year--a 30% increase over last year.

In this country, Japanese philanthropy is being closely watched even though it is minuscule compared to U.S. corporate giving, which last year amounted to $5.6 billion. But while Japanese contributions are swelling, donations from American businesses are expected to grow only by $200 million this year, not enough to keep pace with inflation. With the current challenge to federal funding of the arts and the downturn in the U.S. economy, many arts organizations are trying to forge links with potential Japanese donors.

By Smith’s very rough estimate, Southern California captures only $10 million to $20 million of Japanese largess, but that is because the figures are skewed by the high cost (now estimated at $2 million each) of the chairs the Japanese have chosen to endow at top universities such as the Massachusetts Institute of Technology, UC Berkeley and Stanford. MIT alone has 22 chairs.

At this point, support for community-based activities involves far more modest amounts. For example, Hitachi Ltd., whose Los Angeles representative, Masayuki Kohama, is spearheading the drive to broaden Japanese philanthropy, has contributed $20,000 to Social and Public Art Resources Center (SPARC), a multiethnic mural program headed by Judith Baca, $1,000 for a Korean Youth Center fund-raiser and $5,000 to a scholarship fund named for Democratic congressman Mervyn M. Dymally. The company’s chemical subsidiary gave $15,000 to the Orange County Performing Arts Center for a children’s arts festival with what the center’s director, Thomas R. Kendrick, described as “a strong multicultural orientation.”

Some of this giving is done in conjunction with the Hitachi Foundation, one of 11 similar philanthropic organizations established in the United States by Japanese companies since 1984. This summer, the foundation, whose stated mission is to pursue “cross-cultural understanding” and “strengthen the infrastructure of American society,” sponsored a tour by the Latino theater group El Teatro Campesino.

So far, however, the newly articulated emphasis on grass roots America is most noticeable in the area of education. When American Honda Corp. set up its foundation, it gave grants to a wide variety of programs, from the Epilepsy Foundation to the JFK Performing Arts Center in Washington. Now the focus has been narrowed to “youth and science education.” One Honda program provides scholarships to gifted needy students at Walter Reed Junior High School in North Hollywood to be set aside until the teen-agers are ready for college.

The Panasonic Foundation is providing technical assistance to nine school districts, including San Diego’s, which are trying to make fundamental changes in their school systems. Sophie Sa, the foundation’s executive director, acknowledges that such help is not costly--a total of $1 million a year--but stresses that the long-term relationship with the school districts will make it easier for the program to have an impact.

Nissan, which has been criticized for lagging behind the other companies in corporate philanthropy, is stepping up its efforts but has also decided to zero in on education by, for example, establishing literacy centers at East Los Angeles schools. “It’ safe to say you can expect significant expansion of our corporate philanthropy programs,” said company spokesman Don Spetner, who blames Nissan’s slow start on the company’s failure to “(perceive) ourselves as a part of corporate America.”

Like other Japanese companies, Nissan is sensitive about charges that the Japanese simply throw money at problems without really getting involved. Such criticism surfaced last year when the Japanese business community gave $10 million to victims of the San Francisco earthquake. (Other critics, like former TRW Inc. analyst Pat Choate, argue that the Japanese are trying to expand their political influence in the United States through grass-roots giving.)

“Our philosophy is to have ownership in the program,” Spetner said. “We get very involved, rather than just being a name on a list of contributors.”

Despite Nissan’s self-imposed limitations, arts organizations are optimistic that many Japanese companies will heighten their involvement in the local cultural scene--both by giving more money and by playing a more active role in fund raising, something only a handful of Japanese executives have done so far.

Several have been partial to the Music Center. The 650-member Japanese Business Assn. raised more than $350,000 in the past fiscal year, with contributions from other Japanese companies bringing the total to nearly $1 million, according to Esther Wachtell, the organization’s president. She said that figure does not include promotional activities such as the opening of “Phantom of the Opera,” sponsored by Toyota’s Lexus division, and the Hollywood Bowl jazz series, funded by Nissan’s Infiniti division. (By comparison, however, Arco, whose headquarters are in downtown Los Angeles, gave the Music Center $200,000 during the same period and funded the opera company’s $250,000 production of “Oklahoma!”)

Jiro Ishizaka, chairman of the Japanese-owned Union Bank, sits on the Music Center’s board along with Consul General Kiyohiko Arafune, and several other Japanese executives are also active fund-raisers. “The Japanese have been very good friends from the beginning, and we’re proud of that,” Wachtell said.

Last year, Yukiyasu Togo, president of Toyota Motor Sales, USA, and a devotee of classical music, let it be known through an intermediary that he was interested in providing the pipe organ for Walt Disney Hall, the future home of the Los Angeles Philharmonic.

Unlike most other Japanese companies, Toyota, whose American headquarters are in Torrance, has long had a corporate giving program. And in contrast to most other U.S.-based officials, who have to be authorized by their Tokyo offices to donate more than $5,000, Togo has a free hand; no consultation was needed to enable him to write a $1-million check for the pipe organ, according to Jeffrey A. Smith, assistant to the president.

The Los Angeles County Museum of Art has not enjoyed quite as strong a relationship with the Japanese business community--with one notable exception, according to development director Julie A. Johnston. Japanese companies raised $4 million both here and in Tokyo to aid in the construction of the Pavilion for Japanese Art, which opened in 1988. The group effort on behalf of the Pavilion, led by Toshio Nagamura, former chairman of Union Bank, became a model for fund-raising for the L.A. Festival.

For most local arts institutions, Japanese companies remain a largely untapped resource, one that is especially welcome now that other sources of funding may be drying up. “I doubt whether they can make up the difference, but at least they can provide an additional funding source that we haven’t totally utilized,” said Frederick M. Nicholas, chairman of the Museum of Contemporary Art, which received $500,000 from the Shuwa Investments Corp., the Japanese real estate giant that owns Arco Plaza.

Although KCET, the public television station, has been receiving funding for cultural programming from the private E. Nakamichi Foundation for several years, it is only now beginning to loosen Japanese corporate purse strings, officials said. The first project, a documentary comparing Japanese and American education that will air later this year, was funded by Matsushita, Hitachi and the Japanese Automobile Manufacturers Assn. at a cost of $536,000.

Donald G. Youpa, KCET executive vice president, said he is optimistic about future funding now that Japanese understand how public television in this country works.

But Alex Gibney, the Los Angeles-based executive producer of “The Pacific Century,” a 10-part series slated to air on public television in 1992, came away empty-handed when he sought money from Japanese corporations. “They want to avoid controversy at all costs,” he said, adding, however, that he did not yet have an American corporate sponsor either.

Also eager for a share of Japanese support are local colleges and universities, where Japanese presence is so far minimal. One big exception is UC Irvine, site of a new $16.5-million biotechnology laboratory funded by Hitachi Chemical. Even before it opened in April, critics raised fears that Hitachi would use the lab to steal technological secrets.

In Los Angeles, only UCLA, which has enough graduates in Japan to make it worthwhile to maintain a Tokyo alumni office, gets appreciable funding from Japanese corporations--mostly in small amounts.

UCLA lists two chairs endowed by Japanese corporations, one in Japanese-American studies and another in material science. Other corporate funding is helping to build an international student center.

Despite USC’s interest in Asia--25 of its faculty members are experts on Japan--the private university “has not had a lot of success” in getting Japanese corporate money, said Paul Blodgett, associate vice president for development. He said USC is trying to interest Sony in contributing to its film school and is also talking to Hitachi, Toyota and Honda.

Building relationships with the Japanese takes time, according to Gordon M. Berger, former head of USC’s East Asian Studies Center, which has received about $160,000 in fellowship money from a private Japanese organization but little else.

“The Japanese want to have a sense of a long-term relationship rather than a one-night stand,” he said.