Corporate vs personal philanthropy: "Face it: money is fungible."
From Saturday, September 21, 2002
The New York Times story on the other fallout from corporate scandals:
Amid the myriad scandals sweeping corporate America, the fact that at least one chief executive took credit for a company's beneficence — and that others blur the line — may seem minor. But why shouldn't investors know where their money goes? And shouldn't the company, not the executive, get the glory, the good will and the power that a contribution brings?
Not only is corporate philanthropy coming out of the pockets of shareholders, it is also coming from taxpayers. The AAFRC Trust for Philanthropy in Indianapolis, which promotes ethics in fund-raising, estimates that corporations spent $9.05 billion, or 1.3 percent of pretax profits, on philanthropy last year. It notes that many forms of corporate charity, like volunteer time and sponsorships, cannot be tracked.
...But the cult of the C.E.O. has blurred the distinction between the personal and the corporate — so much so that it is hard to separate, say, John T. Chambers from Cisco Systems, Steven P. Jobs from Apple Computer or John F. Welch Jr. from General Electric.
Charitable institutions are somewhat to blame for this phenomenon. Nominating committees at the most exclusive charities make no bones about what is expected in terms of fund-raising but are agnostic about where the money comes from, a policy called "give or get."
If you join the board of the Whitney Museum of American Art, for example — as [Tyco's] Mr. Kozlowski did despite little knowledge of art — you personally must make a $100,000 annual contribution and either give personally or raise $5 million in all. At the Lincoln Center, the minimum personal contribution is $250,000.
[According to Randall Bourscheidt, the president of the Alliance for the Arts in New York City,] "The nonprofit board frankly cannot afford to worry about the distinctions between corporate and individual contributions."...Or, as one of the most prominent fund-raisers in New York says, "Face it: money is fungible."