CEOs say not enough time spent on philanthropy
NEW YORK Feb 26 (Reuters) - A survey of U.S. chief executive officers by a group founded by actor Paul Newman found that boards of directors do not spend enough time on philanthropy; that giving should be tied to profitability; and that shareholders are divided on whether giving matters.
The Committee Encouraging Corporate Philanthropy, however, said corporate giving still comprises less than 1 percent of overall profit and a tiny fraction of revenue.
In a survey conducted for Reuters, 23 of 34 Fortune 500 CEOs said boards do not spend enough time and resources on giving. Boards on average spend just 5 percent of their time on giving, the survey showed.
Sixteen CEOs said shareholders see the value in corporate giving, 17 said they did not and one did not know. Twenty-six of the 34 CEOs said higher profits should lead to higher giving, while 19 said lower profits should negatively impact giving.
"Absolutely, it ought to be correlated, but we ought to be wise in how we do it," said Arthur Ryan, chief executive of Prudential Financial Inc. (PRU.N), in an interview.
"We know we have to make profits every quarter. We know we have to show growth," he added. "Nobody believes corporate philanthropy is (just) sending a check. CEOs have to move from leadership to engagement. You've got to get everybody involved."
According to the group, U.S. companies gave about 15 percent more in 2005 than in 2004, in part because of disasters such as Hurricane Katrina.
The median dollar value of gifts rose 14.6 percent to $37.7 million among 66 companies analyzed in both years.
About one-fifth of the increase related to Gulf Coast storms.
Matching gifts as a percentage of total giving rose to 9.7 percent from 7.7 percent, as the median value soared 82 percent to $3.8 million.
Among 40 members of the Fortune 100, the median giving level was $69.18 million in 2005. But that represented just 0.79 percent of pretax profit and 0.14 percent of revenue.
Giving was much higher in health care, with a median $546.76 million award among 12 companies studied, the data show.
The philanthropy committee was created in 1998. Its founding co-chairs include Newman, the chairman of Newman's Own Inc., and Kenneth Derr, a former chief executive of Chevron Corp. (CVX.N).
Members include CEOs and senior executives at more than 100 companies, including Citigroup Inc.'s (C.N) Charles Prince, Exxon Mobil Corp.'s (XOM.N) Rex Tillerson, General Electric Co.'s (GE.N) Jeffrey Immelt and Wal-Mart Stores Inc.'s (WMT.N) Lee Scott.
- Washington, DC city council raises minimum wage to $11.50/hr in 2016
- Winning ticket sold in California for Mega Millions lottery: official
- UPDATE 5-Mega Millions lottery winning tickets sold in California, Georgia -Officials
- India removes barriers to U.S. embassy as anger grows over diplomat's arrest
- U.N. told up to 500 killed in South Sudan clashes: diplomats