How Corporate Funding Helps Fill Community Needs

Philanthropy augments disaster response and other government activities.

by / September 8, 2008

Regardless of whether it's a bull or bear market, new trends in corporate philanthropy continue to emerge.

One interesting example of this phenomenon is the efforts of IBM and other companies to enhance government services after 9/11 and Hurricane Katrina. In emergency situations, where the ensuing chaos is more than any one municipal agency can handle, it takes strategic partnerships to fill in the gaps. Corporate leaders are encouraging joint efforts to help communities in times of need by contributing dollars, equipment and services.

Corporate philanthropy also is helping to shore up community services, such as libraries through organizations like the Bill & Melinda Gates Foundation. For cash-strapped cities and counties, these funding mechanisms may offer vital help for valuable community programs.

"Government is a very, very difficult enterprise; you are not just dealing with the complicated problems of delivering services to people, but very often you are doing it in a fishbowl environment, where 90 percent satisfaction is not enough," said Stanley S. Litow, president of the IBM International Foundation and vice president of IBM Corporate Citizenship and Corporate Affairs. "To contribute into the communities, we want all of our employees to be involved, leveraging their expertise."

That expertise comes from IBM's 380,000-person global work force. Some of these employees are business and software consultants, others are finance and communications professionals. Regardless of their occupations, many give their time to offset the trauma of tragic situations. However, such contributions include more than volunteer hours or monetary donations.

"In some cases, donation of the [company's] product or service is in some ways much more valuable than the modest financial contribution that a corporation could provide, so that municipality would benefit from the absolute best the company has to offer," Litow said.

Emergency Response

Major corporations have played key roles in responding to recent large-scale emergencies.

After 9/11, for instance, IBM designed an information system to track services provided to victims by various agencies. The system proved invaluable for guiding the delivery of services to many in need, and from a strategic standpoint it has resolved some significant problems.

"A lot of companies were coming in to contribute things, like trucks delivering donated goods, and they were turned away from ground zero because they weren't the right things; they didn't need them. [The companies] didn't know what people really did need," Litow said. "We were able to say, 'I bet it would be helpful to design an information system to track all services provided to all victims by all of the various agencies that were there on the ground to help.'"

That information system, which IBM developed and contributed to assist 9/11 victims, is still in operation. In fact, Litow said agencies around the world are using it.

The company responded again after Hurricane Katrina, contributing a customized software application that allowed hurricane victims to conduct extensive Web searches. By searching the Internet, many victims could then determine whether friends and family members had survived.

Based on these experiences, some states and localities now are taking steps to formalize cooperative agreements with companies to provide resources needed for large-scale disaster response and recovery.

Learning by the Book
Corporate giving also can help meet everyday community needs. The Bill & Melinda Gates Foundation's U.S. Libraries initiative is designed to offset the apparent decline in public funding for local libraries. The initiative was set up to ensure that every public library user in America has some kind of free and available Internet access. According to Jill Nishi, the initiatives program manager, the program raised $250 million between 1997 and 2003.

"We worked with about 11,000 libraries in the United States to help them install computers and connect those computers to the Internet," Nishi said. Since 2003, nearly

another $100 million has been invested to help libraries sustain the original technology.

More recently the foundation worked with libraries to replace outdated computers through its Opportunity Online Hardware Grant Program. The program's objective is to help the 40 percent of U.S. public libraries still struggling to provide technology services and access to computers and the Internet. The program also seeks to support libraries by making sure their equipment is up to date.

"We like to see public libraries replacing their workstations every four years. ... We offer a grant to provide 75 percent of the dollars to replace a certain number of computers, and the library provides 25 percent for the first year," Nishi explained. "The second year, there is a second phase in which we provide 50 percent of the value of the computers and the jurisdiction has to raise the other 50 percent."

However, once the equipment is updated, it's up to local agencies to ensure that the improvements are sustained.

"This is a nice opportunity to make government officials aware of the opportunity that these grants create," Nishi said. "I think that we see our role as being kind of a catalyst for change -- with an initial infusion of dollars, but we are very reliant on state and local government to continue our efforts in the long term."

Setting a Good Example, a software-as-a-service vendor, is another IT company that has integrated philanthropy into its corporate mission.

"We consider ourselves innovators," said Suzanne DiBianca, executive director of the Foundation. "Our intent was to create a new kind of company that held philanthropy as a core philosophy and not an afterthought. We feel that part of the responsibility of business is to take care of stakeholders, not just shareholders."

To deliver on this philosophy, CEO Marc Benioff developed his own style of corporate giving: 1 percent of employee time, 1 percent of equity and 1 percent of products are set aside to help nonprofits' missions.

Consistent with that philanthropy model is the awareness of the public sector's role in providing services. By using the software, not only can nonprofits streamline expenditure recording, but also the supervising agencies have more efficient and effective ways of tracking where these dollars are spent. As a result, DiBianca said, more money can be directed toward services and less for expenses such as IT hardware and IT staff.


Suzane Bricker Contributing Writer
Suzane Bricker has extensive experience as a grant writer for educational institutions and social services agencies, and has secured funding for her own nonprofit organization in south Florida. She has a master's degree in mass communication with a minor emphasis in science writing.