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New Kind of Giving

There has been much lamenting that U.S. corporations, having become multinational, are not as supportive of American communities as they were a few decades ago. Indeed, the charitable contributions of U.S. companies, adjusted for inflation, declined from 1990 to 1995.

In the last two years, however, corporate contributions have been rising, and the nature of the recipients is changing. The money that went to Rotary Club projects and local museums in the 1950s is now going into programs aimed at our nation’s growing social problems. Last year, for example, the Lannan Foundation quit giving to L.A. arts programs and began channeling its endowment to “pressing needs” like housing and education in Native American communities.

Two very generous examples of this new kind of philanthropy were announced Monday. In Los Angeles, Kaiser Permanente Chairman David M. Lawrence announced a $100-million plan to subsidize health care for California children, while in Redmond, Wash., Microsoft Chairman Bill Gates announced a personal contribution of $200 million in computer hardware to public libraries in the United States and Canada, plus a $200-million gift of Microsoft software.

Such largess, skeptics quickly pointed out, took only a chip off Microsoft’s iceberg-sized profits and Kaiser’s revenues. But the contributions are enough to have a significant impact on social problems--like the 835,000 uninsured children in California whose parents make too much money to qualify for Medi-Cal but too little to afford private insurance.

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Corporations call this new kind of problem-oriented philanthropy “cause-related marketing.” They assume that by giving money to help resolve problems their present or hoped-for customers are concerned about, they will win customer loyalty. So there is, of course, a big element of self-interest.

But past philanthropists like the industrialist Andrew Carnegie also hoped that by doing good they would do well. The difference is that the new philanthropy, in an era when corporations are less rooted in a place, is going more into customer-defined causes than community-based projects.


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