A Troubling Trend Is Seen in Japanese Corporate Giving
On the eve of Pearl Harbor Day last December, in front of 700 people decked out in their holiday finest, Los Angeles Music Center President Esther Wachtell toasted two men at a dinner in the Biltmore Hotel ballroom.
One was a Japanese diplomat who saw his despondent brother commit suicide in the aftermath of the World War II defeat. The other was a retired American executive whose ship was torpedoed by the Germans and whose brother was wounded by the Japanese.
Yet the men not only became friends, they became the spark plugs to ignite the Japanese corporate citizenship movement in Los Angeles, Wachtell told the crowd.
Walter Beran, a former vice chairman with the accounting firm of Ernst & Whinney (now Ernst & Young), turned to Taizo Watanabe, former consul general of Japan in Los Angeles.
“Hey, I guess we really did get something started here,” said Beran, with his unassuming smile.
It was perhaps the first public acknowledgment of the faces who helped to unleash a flood of philanthropic dollars and encourage more Japanese executives to participate on civic boards and cultural endeavors. Overall, Japanese firms gave an estimated $300 million in 1990 for causes ranging from California transportation and science education to music and minority scholarships. That’s just a fraction of the $5.6 billion donated by U.S. firms last year, but it represents a doubling since 1987.
The dinner also underscored what some regard as a potentially troubling trend: The visionaries who promoted the philanthropy are leaving, and a vacuum in leadership and personal involvement is growing, according to Steve Clemons, executive director of the Japan America Society of Southern California.
Watanabe, for instance, is back to Tokyo, where he is a senior spokesman for the Ministry of Foreign Affairs. Beran has retired and surrendered top positions with the Los Angeles Chamber of Commerce and other groups.
The result, Clemons fears, is that the climate for Japanese corporate giving is deteriorating just as American expectations of it are growing and U.S. firms slow their donations amid a tightening economy.
The danger, he adds, is that personal dedication is being replaced by a kind of “brainless giving” that threatens to transform the U.S.-Japan relationship into little more than a cool commercial transaction.
“The environment that created this whole movement is dissipating,” Clemons said. “As these people return to Japan, we are not instantly replacing them. For a while, the dollars will continue to come, but long-term it won’t last.”
Part of the problem is that corporate philanthropy is not a tradition in Japan. But growing trade frictions began to compel more Japanese firms in the United States to improve their image.
Still, only a fraction of the more than 1,000 Japanese firms in Southern California make donations; fewer still send executives to join civic and community boards. And complaints about discrimination from American employees of Japanese firms continue to taint their image as corporate citizens.
Although a few leaders have filled the shoes of Saito and others, such as Akira Tsukada of Mitsubishi International Inc. and Jiro Ishizaka of Union Bank, they are not replacing the old crop fast enough, Clemons and others say.
“There will be others, but there’s always a hiccup when they leave. You do lose momentum,” said Beran. “If they don’t change some basics, the law of one personality will operate.”
Clemons and others are already seeing that law operate. At one prominent Japanese bank, for instance, the former top official embraced local philanthropy, joining boards and donating money. But his successor abruptly changed course, choosing not to become involved with any community affairs for one year and to concentrate solely on business instead.
“Their profile plummeted, from top to bottom,” Clemons said.
As a result, how to institutionalize the philanthropy and develop a steady stream of leaders has become a pressing issue. Indeed, a workshop on the issue, titled “Japanese Corporate Citizenship in America: Half Empty or Half Full? ,” is being held today at the New Otani Hotel by the Japan America Society of Southern California and the Japan Society (New York), in association with Town Hall of California.
One solution is formal foundations. Several Japanese firms have established them, such as Toyota, Hitachi, American Honda and Matsushita.
Another answer, Beran says, is for more Japanese firms to appoint American chief executives to their U.S. subsidiaries. Such a move would avoid the disruption caused by the Japanese system of rotating executives through Los Angeles every five years or so.
Yet the bottom line, most say, is simple human relations. It was the friendships among people such as Watanabe, Beran, Saito and the rest that persuaded more Japanese to step outside their community and join boards of the Music Center, Chamber of Commerce and the like, the activists explain.
In turn, they educated their own home offices in Japan on the need to donate.
Beran, for instance, would host a black-tie dinner for the new Japanese consul general at the Regency Club, bringing together the top executives of both American and Japanese firms in Southern California. Other outings included taking Japanese friends to the Tournament of Roses parade, fishing and golfing.
“Americans need to look at the Japanese as more than just a pot of money,” said Al Goldberg, senior vice president and director of the Japanese business division of Hill & Knowlton, a public relations firm.
JAPANESE CORPORATE DONATIONS
In millions 1987: $134 1988: $180 1989: $244 1990: $300
Source: Estimated by Corporate Philanthropy Reports
