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The Japan Foundation

Center for Global Partnership

4-4-1 Yotsuya, Shinjyuku-ku, Tokyo 160-0004, JapanTel. 03-5369-6072 Fax. 03-5369-6042

URL: www.jpf.go.jp/cgp/e/ Philanthropic Activities by Japanese Companies in the USA

U n i t e dStates ofA m e r i c a

Survey of Philanthropic Activities by Japanese Companies in the United States of America

Corporate Social Responsibility

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CSR_report cover_USA

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The Lehman Shock of 2008, which was triggered merely by the collapse of a single U.S. company, spilled over to the whole nation and then to the whole world, resulting in a once-in-a-century financial crisis and recession on a global scale. The current financial crisis has left a strong impression as one of the negative sides of globalization. There are also many other problems that globalization brings about, such as the exclusion of foreign workers and conflicts due to narrow-minded nationalism. In order to solve these problems, it is necessary to promote mutual understanding and cooperation through dialogue and exchange across borders. Not only governmental organizations, nongovernmental organizations and nonprofit organizations, but general companies operating globally should also cooperate with each other beyond their respective sectors.

Based on such basic understanding, the Japan Foundation established the Office for Project Development and Corporate Partnership in January 2007 for the purpose of promoting partnership with overseas Japanese companies and has endeavored to develop new businesses through such partnership. Specifically, the Japan Foundation conducted surveys on philanthropic activities of Japanese companies in nine foreign countries, including the United States, reported the survey results and publicized written survey reports in eight of the countries, and thus contributed to the promotion of information sharing among Japanese companies. Furthermore, the Japan Foundation has carried out active public relations activities in foreign countries to contribute to a deeper understanding of Japanese companies philanthropic activities.

The Japan Foundation consigned the Survey on Philanthropic Activities of Japanese Companies in the United States of America to the Center for Public Resource Development, a specified nonprofit organization, in 2008 and again in 2009, in cooperation with Japanese Chambers of Commerce and Industry in Chicago, Detroit, Georgia, Houston, Portland, New York, and Washington, D.C., and the Japan Business Association of Southern California. We have compiled the survey results into this report. Japan and the United States have always had a close relationship in terms of economy, culture, and human exchange, and we hope that this report will contribute to further promoting mutual understanding in both countries.

We would like to express our gratitude to all the parties that have helped us with this report, in particular, to Japanese Chambers of Commerce and Industry in the United States for having conducted these surveys, and to the Affinity Group on Japanese Philanthropy for having provided us various precious opinions concerning Japanese companies philanthropic activities at the roundtable discussion.

Office for Project Development and Corporate Partnership The Japan Foundation May 2010

Preface

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Contents

Chapter 1 Aims and Overview of the Japan Foundations CSR Partnership Activities 41.1 What Are the Japan Foundations CSR Partnership Activities? 41.2 Overview of CSR Partnership Activities in the United States 51.3 Composition of Survey Report and Authors 6

Chapter 2 Current Status and Future of Corporate Philanthropic Activities in the United States 82.1 Introduction 82.2 Current Status of U.S. Companies Philanthropic Activities 92.3 Impact of the Recession since 2007 on U.S. Companies Philanthropic Activities and Future Developments 112.4 Business Value to Be Brought about by Corporate Philanthropic Activities 132.5 Conclusion 14

Chapter 3 Philanthropic Activities of Japanese Companies in the United States: Past, Present and Future 183.1 Overview of Best Practices and Current Challenges 183.2 History of Japanese Philanthropic Activities in the United States 183.3 Evolution of Japanese Philanthropic Activities in the United States 193.4 How Japanese corporate philanthropy differs from that of U.S. companies 203.5 Future of Japanese Philanthropic Activities in the United States 213.6 Proposals 22

Chapter 4 Results of the Survey on Philanthropic Activities of Japanese Companies in the United States of America 264.1 Outline of the Questionnaire Survey on Philanthropic Activities of Japanese Companies in the United States of America 264.2 Attributes of Respondents (Time and Form of Expansion into the United States, Business Contents, the Number of Employees and their Composition) 274.3 Points Taken into Consideration in Business Operations 304.4 Current Status of Philanthropic Activities 334.5 Fields and Forms of Philanthropic Activities 354.6 Examples of Philanthropic Activities 364.7 Support Needed in Undertaking Philanthropic Activities 384.8 Reasons for Not Undertaking Philanthropic Activities and Future Plans for Philanthropic Activities 39

Chapter 5 Case Examples of CSR and Philanthropic Activities Identified through an Interview Survey of Japanese Companies 425.1 Outline of the Interview Survey of Japanese Companies 425.2 Results of the Interview Survey of Japanese Companies 44

Chapter 6 Consideration of the Results of the Survey on Philanthropic Activities of Japanese Companies 90

Chapter 7 The Japan Foundations Initiatives 967.1 Encouraging Philanthropic Activities by Japanese Companies in the United States 967.2 Future Initiatives by the Japan Foundation 97

Appendix . Examples of companies philanthropic activities by company 100. Examples of companies philanthropic activities by field of philanthropic activity 118

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Chapter 1

Philanthropic Activities by Japanese Companies in the USA


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Aims and Overview of the Japan Foundations CSR Partnership Activities

1.1 What Are the Japan Foundations CSR Partnership Activities?

In order to solve global issues in the 21st century, it is indispensable to ask global companies and newly appearing social entrepreneurs and innovators to participate, in addition to governmental organizations, nonprofit organizations and nongovernmental organizations. The Japan Foundation is fully aware of the importance of collaboration and cooperation with these various entities activities, as mentioned in the Introduction.

Based on such understanding, the Japan Foundation established the Office for Corporate Partnership in June 2006 and rearranged it into the Office for Project Development and Corporate Partnership in January 2007 to promote its corporate social responsibility (CSR) support program.

The current aims and priority areas of the program are as follows.

AimsThrough offering to cooperate in the CSR activities and philanthropic activities of

Japanese companies in foreign countries, the Japan Foundation aims to further promote dialogue, exchange, and collaboration between the public sector and the private sector in Japan, with a view to solving various issues in the international community.

Priority areas Surveys

Ascertain the current status of Japanese companies CSR activities and philanthropic activities in foreign countries through questionnaire and interview surveys, and seek possibilities for collaboration and cooperation between Japanese companies and public organizations, including the Japan Foundation.

Sharing and transmission of informationTransmit the survey results to overseas Japanese companies and related bodies in Japan,

thereby contributing to the promotion of respective companies CSR activities and philanthropic activities through information sharing.

Publicize the outline of the survey results to the general public overseas, thereby enhancing their understanding of Japanese companies CSR activities and philanthropic activities.

Collaboration and cooperationProvide information and introduce businesses to Japanese companies, thereby contributing

to the activation of their philanthropic activities, especially in the field of international exchange and cooperation.

Develop joint business between the Japan Foundation and Japanese companies and promote collaboration and cooperation based on partnership.

Chapter 1

5Survey of Philanthropic Activities by Japanese Companies in the United States of America

Upon implementing the CSR support program, the following points are to be noted from the viewpoint of the public nature and public interests represented by the Japan Foundation, the independence of CSR activities, and corporate social responsibility to stakeholders.

Equal partnershipThe bottom line of CSR activities is companies initiative and efforts to pursue their

social responsibility to stakeholders. Therefore, when collaborating and cooperating, respective companies autonomy shall be respected as much as possible. In cases where the Japan Foundation and a Japanese company carry out a joint program, we should clarify where the foundations mission and that of the companys philanthropic activities coincide, so that both parties can explain the program to respective stakeholders.

Public nature and non-profitabilityThe Japan Foundation is a public organization that collaborates and cooperates

with private companies for their CSR activities as part of its efforts to solve global issues. In collaboration and cooperation, special consideration should be given to ensuring its public nature and non-profitability so as to prevent the program from being utilized for profit-making activities or the empowerment of specific companies.

1.2 Overview of CSR Partnership Activities in the United States

Fully aware of the importance of collaboration and cooperation for Japanese companies CSR activities, the Japan Foundation rearranged the Office for Promotion of Corporate Partnership into the Office for Project Development and Corporate Partnership in January 2007 and has promoted its CSR support program. In the United States, the Foundation conducted the Survey on Philanthropic Activities of Japanese Companies in the United States of America in Chicago, Detroit, Atlanta, Houston, and Portland in December 2007, and in New York, Washington, D.C., and Los Angeles in December 2008, with the help of the Japanese Chambers of Commerce and Industry in the respective cities. The survey was on the current status of Japanese companies CSR activities and philanthropic activities and was conducted through questionnaires to ascertain the whole image and through interviews to extract model cases and introduce as many concrete examples as possible.

Project Overview

Dec. 2007 Feb. 2008Survey on Philanthropic Activities of Japanese Companies in the United States of America in Chicago, Detroit, Atlanta, Houston, and Portland

Dec. 2008 Feb. 2009 Survey on Philanthropic Activities of Japanese Companies in the United States of America in New York, Washington, D.C., and Los Angeles

May 2009 Interview survey for major companies in New York and Los Angeles

Jul. 2009 Roundtable discussion with Japanese companies officials in charge of philanthropic activities

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Aim

s and Overview

of the Japan Foundations CSR Partnership Activities

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1.3 Composition of Survey Report and Authors

The survey report consists of seven chapters.Chapter 2 overviews the current status and the future of philanthropic activities in the United

States. The focus is on how the recession since 2007 and the financial crisis since the autumn of 2008 have affected U.S. companies philanthropic activities and how companies have changed their strategies for and ways of carrying out such activities. Although the current recession had yet to affect Japanese companies philanthropic activities clearly at the time of the survey, it will surely have an impact in the near future. We hope that the analysis of this chapter will be of help to Japanese companies in establishing their future strategies.

Chapter 3 shows the outline of the roundtable discussion by the Affinity Group on Japanese Philanthropy (AGJP), a network of Japanese companies officials in charge of philanthropic activities. AGJP is a membership organization founded in 1991, when Japanese companies were launching charitable foundations in the United States. At the roundtable, the participants looked back on the history of Japanese companies philanthropic activities in the United States, discussed future challenges and developments based thereon, and made several recommendations. Some of the participants have been engaged in the activities since the 1980s, when Japanese companies started them, and their experience-oriented opinions were very interesting. We hope that you learn from the valuable testimony and recommendations by these experts long engaged in Japanese companies philanthropic activities.

From Chapter 4 onward, the results of the survey in the United States, the core of this report, are introduced and analyzed. Chapter 4 shows the results and analysis of the questionnaire survey, and Chapter 5 shows the results and analysis of the interview survey with Japanese companies carrying out unique philanthropic activities. You can learn examples of specific activities and about respective companies original strategies through these interviews. Chapter 6 compiles the characteristics and future challenges of philanthropic activities in the United States observed from the results of the questionnaire and interview surveys. Lastly, Chapter 7 introduces the future course of the Japan Foundations activities toward promoting the philanthropic activities of Japanese companies in the United States.

At the end of this report, activity examples collected through the questionnaire and interview surveys are listed as reference. We hope that these examples will be of some help for you to carry out philanthropic activities further in the United States.

Authors

Chapter 1

Junichi Tomioka (Director, Office for Project Development and Corporate Partnership, Japan Foundation)Tatsuaki Kobayashi (Deputy Director General, Japan Cultural Center, Japan Foundation, New York)

Chapter 2 Tatsuaki Kobayashi (Deputy Director General, Japan Cultural Center, Japan Foundation, New York)

Chapter 3 Affinity Group on Japanese Philanthropy (AGJP)

Chapter 4Chapter 5Chapter 6

Sachiko Kishimoto (Executive Director, Center for Public Resources Development)Asuka Tajima (Program Officer, Center for Public Resources Development)Megumi Hisaeda (Program Officer, Center for Public Resources Development)

Chapter 7

Junichi Tomioka (Director, Office for Project Development and Corporate Partnership, Japan Foundation)Tatsuaki Kobayashi (Deputy Director General, Japan Cultural Center, Japan Foundation, New York)


Chapter 2



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Current Status and Future of Corporate Philanthropic Activities in the United States

2.1 Introduction

The United States is a philanthropy powerhouse. A number of entrepreneurs and wealthy individuals have created foundations, such as the Bill & Melinda Gates Foundation, Ford Foundation, and Rockefeller Foundation, to carry out philanthropic activities. Ordinary individuals also donate a small amount of money regularly at the grass-roots level. Those who have once lived in the United States may have received greeting cards asking for donations from various charity groups at Thanksgiving time. Since the foundation of the country, the U.S. citizens have been characteristically independent of the government and have tried to solve any problems through mutual support and volunteer activities within respective communities. The spirit of self-help and independence is the essence of the country of the United States and donations and philanthropic activities that enable this can be recognized as the very culture deep-rooted in the U.S. society.

Such spirit can also be observed in philanthropic activities of U.S. companies. They are also required to contribute to respective communities as good citizens through philanthropic activities and they have, in response to such expectations, developed various manners to carry out such activities.

The most representative is cash philanthropy, which is roughly categorized as corporate giving (direct donations from companies) and corporate foundation grants (indirect donations via corporate foundations). Donations are sometimes made in the form of an endowment (establishing a fund with large-scale investment and using endowment earnings for community activities) or in the form of a grant (providing a certain amount of money every year). Other than cash philanthropy, employee volunteer activities are also common and U.S. companies encourage such activities in respective communities. In order to encourage regular volunteer activities, some companies adopt a volunteer leave system to permit a certain period of paid leave to be taken for volunteer activities, and other companies specify a volunteer day and have all employees participate in volunteer activities in concert. It is amazing to see all employees of a large global company like Citibank participate in volunteer activities on a specified volunteer day all over the world. Furthermore, some other companies actively promote matching fund programs, under which a company donates the same amount of money as any employee has donated to a community individually, or pro bono activities to offer employees specialized skills to nonprofit organizations free of charge. Philanthropy may sometimes be in the forms of in-kind donations (provide corporate products free of charge) or in-kind services (permit the use of corporate facilities free of charge). Philanthropic activities are thus diversified.

This chapter will overview the current status and challenges of philanthropic activities of U.S. companies. A mass of studies has been accumulated regarding the historic developments, current status and challenges of philanthropic activities of U.S. companies, but it is not realistic and is beyond the author to cover the entirety of such studies. Therefore, I will focus on the data for 2008 to look over U.S. companies philanthropic activities and review their future developments, based on the impact of the financial crisis since the autumn of 2008 and U.S. companies responses thereto. At the end of this chapter, I will consider what corporate philanthropic activities actually mean to companies.

Since starting business in full in the United States in the 1980s, Japanese companies have carried out philanthropic activities in various manners. Now, they are accepted as good U.S. corporate

Chapter 2


citizens and their activities have been highly appreciated in the United States. However, it seems that some newcomers and those operating on a smaller scale have yet to carry out sufficient philanthropic activities. We hope that this chapter will help such Japanese companies think about starting activities in some way.

2.2 Current Status of U.S. Companies Philanthropic Activities

(1) Overview: Corporate giving has constantly increased over the past 40 years According to Giving USA 2009, a report on overall corporate donations publicized every year

by the Giving USA Foundation, corporate giving in 2008 amounted to 14.5 billion dollars, including donations via corporate foundations as well as both gifts of money and in-kind donations. This amount accounts for only five percent of the total donations in the United States, which implies the enormity of the annual total. In the United States in particular, wealthy individuals donate enormous amounts every year and their donations constitute a large portion of the total. Although the share of corporate giving thus seems rather small, a considerable amount of funds is provided for philanthropic activities.

How has corporate giving changed so far? The data in Giving USA 2009 show a constant increase in corporate giving since 1968. The total corporate giving, which was 0.9 billion dollars in 1968, increased to 14.5 billion dollars in 2008, showing a 16-fold increase in 40 years. This is a simple comparison ignoring inflation rates, but even taking inflation rates into consideration, the total still shows a 2.6-fold increase. These figures imply that corporate philanthropic activities have developed steadily in the United States.

(2) Activity fields: The health and welfare field comes to the topIn what fields do U.S. companies conduct philanthropic activities? According to the 2008

Corporate Contributions Report, a survey conducted by the Conference Board with 197 member companies, the health and welfare field was at the top with an overwhelming lead, accounting for 53.0% of the total corporate giving in 2007, followed by the fields of education (18.6%), citizens and communities (12.8%), culture and art (4.6%), and environment (1.4%).

Comparing this with the trend of overall donations nationwide in Giving USA 2009, the top was religious activities, accounting for 35% of the total, followed by health and welfare (16%), education (13%), citizens and communities (8%), culture and art (4%), international relationships (4%), and environment (2%). Companies usually avoid making donations to religious activities so as not to have their brand image fixed or linked to specific religions. Therefore, when excluding donations to religious activities, target fields of corporate giving and the overall donations are almost the same.

However, corporate giving has unique characteristics in that more than half is for the field of health and welfare. This may be because philanthropy in the health and welfare field is the most simple as a means for community support and is most publicly appealing. A large amount of in-kind donations and services by pharmaceutical companies to nonprofit organizations in the health and welfare field may also work to increase the percentage of corporate giving in this field. Furthermore, the percentage increases partly because companies provide massive emergency assistance in the event of disasters, by offering medicine, goods and equipment for reconstruction, and transportation services therefor. On a cash donation basis, excluding in-kind donations, corporate giving is the largest in the field of education (28.2%), followed by the fields of health and welfare (26.7%), citizens and communities (19.8%), culture and art (9.2%), and environment (2.3%). The reverse order of the top two fields indicates a

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higher proportion of in-kind donations and services in the field of health and welfare.

(3) Activities of corporate foundations: Mid-to long-term assistance by specialized staffAs mentioned in the Preface, major forms of corporate giving are direct donations from

companies and indirect donations via corporate foundations. Generally, direct donations are relatively short-term and flexible, directly linked to corporate profits, while indirect donations, which are via corporate foundations that hold a certain amount of funds and specialized staff, are characteristically independent of companies commercial activities, based on a longer-term standpoint. Both have merits and demerits and it is difficult to judge which is better. Nevertheless, how are corporate foundations activities recognized in the United States and what are their characteristics?

Firstly, how are they positioned in corporate philanthropic activities?According to Giving USA 2009, donations via corporate foundations account for 30% of

the total corporate giving. The figure itself is not so large, but as mentioned above, it should be noted that the amount of corporate direct donations includes an equivalent amount of in-kind donations and services. Although there are no concrete data, when making a comparison on a cash donation basis, excluding massive in-kind donations and services provided in the health and welfare field, donations via corporate foundations are highly likely to account for a large portion of the total corporate giving.

Secondly, let us change the viewpoint and see how corporate foundations activities can be positioned in the entirety of foundation activities in the United States, including those by individual foundations, community foundations, and public foundations.

According to Key Facts on Corporate Foundations publicized by the Foundation Center in May 2009, there are 2,498 corporate foundations now operating nationwide and approximately 4.4 billion dollars in total was donated in 2008, which accounts for nearly 10% of the total donations from foundations. The total donations from corporate foundations increased in 2008 by 0.8% from 2007, but it actually declined by 3% when considering inflation rates. In a longer term, the total, which was approximately 1.4 billion dollars in 1990, showed a 3.14-fold increase in 20 years, or a 1.93-fold increase when considering inflation rates. Taking into account the fact that the total of donations from other foundations has increased significantly, the increase of that from corporate foundations is relatively small.

In what fields do corporate foundations make donations and how do their donations differ from corporate direct donations? According to the above-mentioned Key Facts on Corporate Foundations, corporate foundations donations are for the fields of health and welfare (32%), education (25%), public and social benefits (23%), culture and art (12%), environment and animal preservation (4%), and international problems, development and peace (3%). The survey targets and classification are different from those for the survey by the Conference Board on the entirety of corporate philanthropic activities (as introduced in 2.2 (2) above), and a simple comparison is difficult. However, the order starting with the health and welfare field, followed by the fields of education, public and social benefits, culture and art, and environment shows almost the same trend as corporate giving in general.

Compared with corporate direct donations, the percentage of corporate foundations donations in the health and welfare field is relatively small, while that of assistance in the culture and art field is high. Considering that assistance to culture and art requires expertise and a longer term, the characteristics of corporate foundations may have high affinity with such assistance.


2.3 Impact of the Recession since 2007 on U.S. Companies Philanthropic Activities and Future Developments

(1) Due to the recession, companies cut back their philanthropic activities, but by a limited margin

It is generally accepted that the United States entered a recession in 2007. The financial crisis in the autumn of 2008 dealt a further blow to the U.S. economy. Some compare this to the Great Depression of the 1930s. Actually, the current financial crisis affected U.S. companies significantly, as seen in the bankruptcy of GM and temporary nationalization of Citibank. In order to prevent this crisis from developing into a depression, the U.S. government provided enormous emergency loans to financial institutions and instituted various economic policy packages so as to mitigate a slowdown in the real economy. As a result, major U.S. financial institutions completed the repayment of the emergency loans and started to generate profits again as of February 2010. The unemployment rate is still high, but the GDP became positive in the United States. However, it may take some more time until the U.S. economy recovers to the level it was at prior to the financial crisis.

How has this recession affected corporate philanthropic activities? According to Giving USA 2009, the total corporate giving in 2008 decreased by 4.5% from 2007. This implies that the recession in the United States had a significant impact. However, decreases were observed not only in the total corporate giving, but also in the amount of overall donations (down by 2.0%) and in the amount of donations from individuals (down by 2.7%). The cutback in corporate giving was rather limited, at 4.5%, compared with an 18% decline in corporate earnings in the same year.

(2) Correlation between economic conditions and corporate givingIt is tempting to predict that the deterioration in corporate earnings will lead to a cutback in

corporate philanthropic activities, because companies are hardly going to expand their philanthropic activities that do not generate profits when corporate performance is unfavorable. However, the correlation between economic conditions and corporate giving is not so simple in reality.

Giving in Numbers 2009, which was publicized by the Committee for Encouragement of Corporate Philanthropy (CECP), says that deterioration in economic conditions does not necessarily lead to a decrease in corporate giving. The survey by the CECP actually shows that 53% of respondent companies expanded their donations between 2007 and 2008 and that 27% increased their donations by 10% or more. The CECP analyzes that this is because it takes some time before an economic recession makes an impact on corporate giving, citing the following two points as the reasons for this: (i) corporate giving is generally a multiple-year commitment; and (ii) when deciding the amount of donations, companies usually refer to performances in the past few years, not merely to the performance in the most recent year.

The impact of the economic crisis in the autumn of 2008 is surely serious and is likely to cause not only a short-term decline in corporate earnings but also a decrease in the asset value of corporate foundations and low interest rates, which will affect corporate direct donations and corporate foundations activities significantly in the future. The impact of the recession was not yet clear in 2008, but economic conditions will start to seriously affect corporate philanthropic activities in 2009 onward.

(3) Companies philanthropy strategies during the economic crisisWhat strategies have companies adopted in response to the recession? Companies will not

simply reduce their donations, but profit-making business is the basis of their activities, and corporate

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giving is inevitably subject to economic conditions when all corporate business activities are being cut back. What, then, are the strategies that are available for corporate philanthropy departments to continue their activities?

Making the Most of What We Have: Corporate Giving in the New Economy, which was publicized by LBG Research Institute, Inc. in August 2009, explains that companies, faced with the economic crisis, have made the most of their existing resources and have been promoting corporate giving in a more strategic manner so as to maintain their philanthropic activities, while reducing the amount of donations.

According to the survey by the LBG, companies have been making efforts as follows so as to minimize the damage of a decline in corporate giving on a value basis:

a. Strengthening employee volunteer activities (84%)b. Increasing the number of volunteer events (48%)c. Strengthening in-kind support, such as the offering of corporate facilities (15%)d. Strengthening in-kind donations (12%)These are short-term responses to the economic crisis. As mid- and long-term responses, the

survey by the LBG cites two core strategies for companies: (i) strengthen a relationship with nonprofit organizations from a simple donor-recipient relationship to a partnership, and (ii) build such partnership and develop programs that have a stronger social impact and ensure a win-win relationship between companies and nonprofit organizations.

Concrete means to carry out these strategies vary by company and depend on the characteristics of the fields of philanthropic activities. The survey by the LBG introduces the following means that companies employ to realize the above-mentioned mid- and long-term strategies:

a. Developing methods to evaluate businessb. Strengthening the accountability of nonprofit organizationsc. Reviewing and tightening the criteria for deciding grantmakingd. Narrowing down grantee organizationse. Actively collecting partner nonprofit organizations suitable for the respective companys

philanthropy strategiesWhen funds decrease, companies compensate the deficit by encouraging employee volunteer

activities and making the most of their corporate products. Furthermore, in order to visualize the effects of philanthropic activities more clearly, they aim to build a strategic partnership with nonprofit organizations. Such approach represents the rationalism of U.S. companies. Even in the midst of such a serious economic crisis, U.S. companies do not withdraw their philanthropic activities, but actually seek to increase the impact thereof. In this sense, the survey results evidently show the maturation of corporate philanthropic activities in the United States.

(4) Future directions of corporate donations: CEOs mid-and long-term strategiesThe above-mentioned survey by the LBG is based on questionnaires aimed mainly at company

officials in charge of philanthropic activities, and therefore reflects the mid-and long-term strategies, on a practical level, of philanthropy departments and corporate foundations. How are such practical-level efforts positioned in the overall corporate business strategies? How do CEOs, who are to overview all the business strategies, redefine corporate philanthropic activities amid the economic crisis, which started in the autumn of 2008, and how do they reorganize them in the overall mid-and long-term corporate strategies?

Discussions at Board of Boards, held by the above-mentioned CECP every year, will be of


some help for these questions.According to Board of Boards 2009, a report of the meeting convened by the CECP with the

participation of CEOs from major companies, the participants agreed that the current economic situation will last up to 2011 at the least. They discussed how to maintain mid-and long-term commitments to communities under such circumstances. Major solutions proposed in this meeting were again to seek means for activities other than cash philanthropy, to enhance the efficiency of philanthropic activities, and to strengthen cooperative relationships with wide-ranging stakeholders, including employees, the government, and communities. The following are new future directions of corporate philanthropic activities recommended by the participating CEOs, as reported in Board of Boards 2009:

a. Working hard to bring corporate philanthropic activities in line with the overall corporate objectives and strategies

b. Prioritizing targets that are in line with the respective companies unique characteristics and linking them to important issues in communities where they conduct business activities

c. Integrating methods to evaluate the effects of philanthropic activities with those to evaluate other corporate activities from the viewpoint of ensuring sophisticated investment

d. Seeking any possibilities and outside-the-square thinking for resources other than cash that companies can provide to community partners

Behind these discussions, there is a common awareness that companies should fulfill their social responsibilities even more positively because massive government funds have been provided to rescue them since the outset of the financial crisis in the autumn of 2008. However, the discussion report shows that companies not only have a less positive mindset on the need to fulfill social responsibilities, but also display a vigorous stance of positioning corporate philanthropic activities in the entirety of corporate management and utilizing them for growth strategies.

Companies cannot grow without the communities where they sell their products. If there is any problem in a community, working to solve it helps their future growth. From discussions reported in Board of Boards 2009 by the CECP, we can feel that the participating companies recognize the current economic crisis to be a significant issue affecting their future growth and that they are committed to solving it through philanthropic activities. At the same time, they seem to have calm business judgment so as to bring their philanthropic activities, even those for communities, in line with corporate profits in the mid-and long-terms, as far as they inject their resources.

2.4 Business Value to Be Brought about by Corporate Philanthropic Activities

We have so far overviewed corporate philanthropic activities in the United States and the current status and challenges thereof under the recession since 2007. As well as being deeply-rooted in the business activities of U.S. companies in terms of CSR, philanthropic activities are properly incorporated in corporate business strategies.

Lastly, we will briefly look at what roles such philanthropic activities play in enhancing corporate business value. In what points are corporate philanthropic activities recognized as enhancing value?

Measuring the Value of Corporate Philanthropy: Social Impact, Business Benefits, and Investor Returns, a report publicized by the CECP in 2010, cites the following four points as the benefits of philanthropic activities that corporate CEOs expect:

a. Strengthening employee engagement in corporate activities: Through group volunteer

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programs for employees and in-house communication on philanthropic activities, employees are expected to become highly motivated and more productive, and foster a common identity with the company.

b. Ensuring consumer loyalty: For the industries that deal with consumer goods in particular, causes that contribute to society through getting involved in a community will work to build corporate brand identity, ensure consumer loyalty, and promote sales through word of mouth.

c. Mitigating the risks of negative campaigns against companies: The performance of corporate philanthropic activities may mitigate or eliminate the risks of eliciting social disapproval when a problem occurs.

d. Contributing to business innovation and corporate growth: Philanthropic activities also provide a new relationship or opportunity for companies to search, test, or present their new ideas, technologies, or products.

Considering the recent development of the Social Responsibility Investment Index (SRI Index), philanthropic activities are also expected to be appealing to investors. Companies engaged in philanthropic activities are financially sound and full of potential, which will impress investors as being attractive. In this manner, corporate philanthropic activities in the United States have been promoted positively from the viewpoint of fulfilling social responsibilities to communities and also from the viewpoint of enhancing the business value of respective companies.

2.5 Conclusion

During the 1980s, when Japanese companies began to fully engage in business in the United States, the concept of Corporate Citizenship was widely shared among those advancing companies and other Japanese companies, and they started full-fledged philanthropic activities. Some of these Japanese companies established corporate foundations and others made direct donations in the United States so as to be accepted as good corporate citizens. Furthermore, they have positively responded to a new concept, Corporate Social Responsibility, which emerged in the 1990s. Japan bashing in the 1980s is history now, and Japanese companies have obtained citizenship as U.S. companies.

However, corporate management policies continue to develop in the United States and, as explained so far, major U.S. companies have come to position their philanthropic activities as part of their growth strategies, rather than as their commitments to CSR, and utilize the activities also for marketing activities, including corporate branding, and for enhancing business value linked to SRI. We hope that this chapter will be of some help for the future development of Japanese companies philanthropic activities.

Reference materialsGiving USA 2009 by Giving USA FoundationThe 2008 Corporate Contributions Report by the Conference BoardKey Facts on Corporate Foundations by Foundation CenterGiving in Numbers 2009 by Committee Encouraging Corporate PhilanthropyMaking the Most of What We Have: Corporate Giving in the New Economy by LBG Research

Institute, Inc.


Global Leaders: Confronting a Crucial Decision by Committee Encouraging Corporate Philanthropy (Board of Boards 2009 Executive Summary)

Measuring the Value of Corporate Philanthropy: Social Impact, Business Benefits, and Investor Returns by Terence Lim, Ph.D. published by Committee Encouraging Corporate Philanthropy

Major resourcesCorporate philanthropic activities in the United States are well organized partly because

various nonprofit organizations, as well as consulting companies and other profit-making organizations, carry out activities for promoting CSR and philanthropy, targeting corporate CEOs and philanthropy directors. Corporate CEOs and philanthropy directors participate in meetings held by these nonprofit organizations and understand and share the most recent trends and challenges of philanthropic activities. They sometimes have a consulting company review their philanthropy strategies and outsource their businesses as necessary. Such support by nonprofit organizations has contributed to the dynamic development of corporate philanthropic activities in the United States.

The following are the websites of such organizations and major sources of information on CSR and philanthropy.

PhilanthropyCommittee Encouraging Corporate Philanthropywww.CorporatePhilanthropy.org

The Conference Boardwww.conference-board.org

The Center for Effective Philanthropy (CEP)www.effectivephilanthropy.org

The Philanthropic Initiative (TPI)www.tpi.org

CSRBusiness Civic Leadership Centerwww.uschamber.com/bclc

Business for Social Responsibilitywww.bsr.org

FoundationCouncil on Foundationswww.cof.org

Forum of Regional Associations of Grantmakerswww.givingforum.org

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Foundation Centerwww.foundationcenter.org

Giving Institute: Leading Consultants to Non-Profitswww.givinginstitute.org

JournalThe Chronicle of Philanthropywww.philanthropy.com

Cause marketingCause Marketing Forumwww.causemarketingforum.com

University and research instituteBoston College Center for Corporate Citizenshipwww.bcccc.net

The Center on Philanthropy at Indiana Universitywww.philanthropy.iupui.edu

Government and international organizationUN Global Compactwww.unglobalcompact.org

U.S. Agency for International Development (USAID), Global Development Alliancewww.usaid.gov/gda

Chapter 3




Chapter 3



18

Philanthropic Activities of Japanese Companies in the United States: Past, Present and Future

On July 28, 2009, members of the Affinity Group on Japanese Philanthropy (AGJP) were convened by the Japan Foundation Center for Global Partnership for a three hour roundtable discussion on the topic of philanthropic activities of Japanese companies in the United States. Founded in 1991, at the time when Japanese companies were launching charitable foundations in the United States, AGJP is a membership organization, affiliated with the Washington, D.C. based Council on Foundations, that works to provide a venue for information sharing and promotion of best practices among funders with roots in Japan and the Japanese corporate community.

AGJP members involved in the roundtable discussion represent the living oral history of philanthropic activities of Japanese companies in the United States; including current and past executive directors of seven corporate foundations. Many have been involved since the inception of their respective foundations which are now approaching their 20th and even 25th anniversaries.

3.1 Overview of Best Practices and Current Challenges

Participants were asked to identify the single best practice and the greatest current challenge of their foundations:

Best practice Greatest current challenge- engagement of company employees - lack of revenue stream and management - preserving capital- multi-faceted relationships with grantees - constrained resources that leverage credit, grants, executive and - frequent rotation of executives employee involvement - scale: small donor among very large- high level of access and influence within donors in targeted funding area the company - determining most effective use of- customer service relationship with grantees limited funds in trying times- employee engagement programs - lack of revenue while carrying full- significant national impact despite limited funds operating expense of foundation

3.2 History of Japanese Philanthropic Activities in the United States

All of the participating foundations were founded in the late 1980s and early 90s, an era in which there heightened tensions in the U.S.-Japan relationship due to Japans rising position in the global economy. Prior to that time, Japanese companies had a strong tradition of corporate giving, primarily sizeable multi-year donations made directly to U.S. universities and cultural organizations.

Participants characterized the creation of charitable foundations by Japanese companies as part of an Americanization strategy reflecting Japanese companies long-term commitment to doing business in the U.S. market. Japanese companies began to move manufacturing to the United States,

Chapter 3


hire Americans to make their products, and list on the New York Stock Exchange. They pursued ways to demonstrate to Americans that they, like American companies, wanted to contribute to American society. Endowing a corporate foundation was one means to do so.

All participants agreed that the creation of corporate foundations in the United States was a very bold and courageous step, one that required a large allocation of resources in a short time period, and one that represented a steep learning curve for Japanese executives. Many described the corporate executives who lead the efforts to create these new foundations as innovators. One such executive put his own money on the table to launch the foundation. Some of these individuals who helped create these organizations remain involved in foundation affairs today.

3.3 Evolution of Japanese Philanthropic Activities in the United States

By the mid 90s roughly the mid-era of contemporary Japanese philanthropy in the United States American hostility towards Japan had lessened. Japan was one of the U.S.s most important economic partners and a very close ally of the United States. With the dispersion of the initial tension, the long-term challenge was to integrate Japanese corporate foundations more fully into their respective companies. In this phase, Japanese corporate foundations began to:

-Identify ways to integrate their activities with corporate priorities for example: Some foundations created multiple community involvement committees throughout their U.S.

companies. Some of these committees have access to matching funds from their foundation for their own company-sponsored community initiatives. The foundations of regulated financial institutions support community-based organizations

including low-income housing and economic development groups which are compatible with the Community Reinvestment Act (CRA). During CRA regulatory exams, charitable donations supporting community development purposes are evaluated. Banking participants in the roundtable stressed such community partnerships and their success in leveraging grants with loans and executive involvement. Some foundations created matching gifts and dollars for doers grant programs for corporate

employees, linking employee engagement in the community to grantmaking. -Define a role in building reputation and name recognition for the company (in contrast to quiet

philanthropy in the early days). While none claim to be as directly aligned with corporate goals as is, for instance, the Coca Cola Foundation with its clean water initiatives, most are seeking to explore how to add business value.

Roundtable participants stressed that their own concerns during this period were no different than those of most U.S. corporate philanthropic representatives: how to be more integrated with the business objectives of the company and how to demonstrate strategic value.

Roundtable participants uniformly wished that Japanese executives in the United States were more outspoken about their companies significant global philanthropic experience. During an era marked by a rise in the global dialogue regarding the role of business in society, Japanese executives were relatively silent despite noteworthy corporate tradition and commitment as global companies. In the late 80s and early 90s, no other foreign companies, it was noted, were subjected to the criticism targeted at Japanese companies; none made the uniform and deliberate investment in philanthropy that Japanese companies made. Thus, given the success, Japanese executives should be encouraged to share

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these experiences.During this same period, however, cash support and more recently investment income for

foundations stalled, with one notable exception and with intermittent deposits of CRA-related awards by financial institutions into their respective foundations. A reflection of Japans domestic economic challenges and corporate cost cutting, some foundations report that they began to absorb some if not all of the operating expenses formerly paid by the company.

3.4 How Japanese corporate philanthropy differs from that of U.S. companies

In contrast to most Japanese companies, U.S. companies that are thoughtful and deliberate about their philanthropy often intentionally use it to differentiate themselves in the marketplace. Some are significantly evolved with respect to building brand identity and integrating with other core competencies of the company (e.g., with specialized employee volunteer engagement, product donation, corporate communication, advertising). Another difference is the commitment of CEOs to philanthropic activities. Generally speaking, CEOs of U.S. companies are more actively engaged and play more of a leadership role in philanthropic activities than their Japanese counterparts in the United States.

Significant areas of difference were identified as follows:

Japanese companies U.S. companiesfocus/ little change since inception; frequent changes in focusinterest area leads to long-term relationships and strong records of achievement in targeted issue areas

executive rotation limits understanding and turnover occurs, to be sure,involvement program progress but philanthropy is more embedded in corporate culture/less dependent on changes in executive office

communication executives seem reticent to tell the story corporate executives speak readily of corporate philanthropy to external about community involvement audiences as part of company branding

funding with few exceptions: no donations to large endowments or often pass principal since foundation inception; through foundations modest or no annual support that are funded annually as cost centers regular additions to principal during annual corporate budget cycle

operation variety of models for foundation oper- corporations typically absorb cost of ating costs; some foundations pay all foundation salaries and operating


costs and salaries; others expense, with exception of tax filing pay no or minimal expenses fees and the like

employee with one exception, no incentives for release release time during work hours isvolunteerism time during work hours standard practice

product little organized, deliberate in-kind donations; for real sector companies (non- philanthropy not an integral component of philanthropy financial) this is the fastest-growing component of corporate giving and is seen as an opportunity to build brand loyalty and provide nonprofits with needed goods

3.5 Future of Japanese Philanthropic Activities in the United States

The state of philanthropic activities of Japanese companies is characterized as somewhere between stable and declining, compared to the vigorous establishing activities of the late 80s and early 90s. The economic crisis that began in 2008 has cast a shadow over the growth of these foundations and their related companies in the U.S. market. There is considerable concern over two critical factors:

Fiscal structure of foundations: Due to dependence on endowment earnings, and due to lack of an ongoing revenue stream to maintain or build principal, there is a declining amount of money available to foundations during this current economic crisis. There is reluctance on the part of executive management to view additions to foundation endowment in the same way that they think about investments in HR development, leadership development, reputation building, marketing and the like.

Japans waning interest in the United States: Japans interest in the United States seems to be waning in favor of China and other global markets. Japan has enthusiastically embraced CSR/Corporate Social Responsibility but continues to be reluctant to speak about its U.S. philanthropy experience and impact on the global stage. Without an effort to understand and promote their own impact, Japanese companies cannot expect others to validate those activities. But in this challenge also lies opportunity: the United States is a global center with many actors such as international organizations, foundations and nongovernmental organizations in the field of global issues. Philanthropic activities in this country can have impact beyond the United States. There is great potential for Japanese companies to extend their philanthropic reach if they proactively seek collaboration with these U.S.-based international organizations and nongovernmental organizations.

Strategies of U.S. foundations of Japanese companies in the face of these challenges should focus on further integrating with the company and demonstrating philanthropic activities as an asset to the company. Roundtable participants agreed that they should be more focused, measurably effective and impact- oriented under these tough circumstances. One participant recommended that each foundation should redefine its own core competencies and establish mid & long term strategic plans that play to these strengths. Others, in the spirit of kaizen, the Japanese system facilitating continuous improvement, will continue to engage in making ongoing, incremental improvements to their operations,

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grantmaking and impact. Some additional ideas for further strengthening philanthropic activities in Japanese companies are:- Employee volunteerism can demonstrably add value particularly in the face of corporate mergers

in promoting teamwork, raising employee morale, and strengthening a sense of common identity and shared purpose.

- Linking U.S. activities to the larger global context can also add value. One participant reported some success in supporting the exchange of U.S. curriculum and classroom models with colleagues in other countries, as a means of serving the companys global interests.

- Communicating and sharing the value of philanthropic activities within the company is crucial. Philanthropic activities should be considered assets, not costs. Companies with strong commitment to philanthropic activities will attract consumers and investors, appeal to highly motivated and talented young people as potential employees, and assure the sense of loyalty, pride and shared values among employees.

- Exploring strategies for periodic reinvestment in the corporate foundation asset.- Adopting a research and development mindset that views the foundation as a societal asset that will

benefit from a spirit of continual attention and improvement. - Philanthropic activities are part of Corporate Branding efforts which add to the value of companies.

3.6 Proposals

1. Encourage and prepare CEOs to talk on the global stageat professional conferences, at executive forums and the like -- about the experiences and successes of Japanese philanthropic activities in the United States as part of their own global CSR story.

2. Commission a survey to document the collective efforts and impact of Japanese corporate philanthropic activities in the United States. Develop a communication plan for dissemination of results. Seek candid input from the Keidanren and CEOs of Japanese headquarter companies regarding the future of Japanese corporate philanthropic activities in the United States.

3. Confirm and reinforce the lessons and values of philanthropic activities as a corporate asset that requires annual investment. Content would include:

Structural aspects of foundations and best practices among foundations of U.S. companies (e.g., pass-through foundations, annual contributions to endowment, assignment of operating cost, pay-in and pay-out ratios, operating ratios) Philanthropic activities as a corporate asset, to include:- Employee morale and team-building potential of philanthropic activities- Opportunities to build brand and maximize profits - Opportunities to serve the larger purpose of the corporation: such as stimulating innovation

or community investment- Source of information for risk management and helping establish new markets for the firms

products and services- Improved relations with regulators and interest groups- Mitigating the negative effects on reputation from violations


4. Explore the potential of product philanthropy and/or employee volunteer- based philanthropy as an adjunct to cash philanthropy.

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Results of the Survey on Philanthropic Activities of Japanese Companies in the United States of America

Chapter 4




Chapter 4



26


4.1 Outline of the Questionnaire Survey on Philanthropic Activities of Japanese Companies in the United States of America

The Japan Foundation conducted the Survey on Philanthropic Activities of Japanese Companies in the United States of America. The outline of the survey is as follows:

Survey method:From 2007 to 2009, questionnaires entitled Questionnaire Survey on Philanthropic Activities

of Japanese Companies were sent twice to member companies of Japanese Chambers of Commerce and Industry in the United States. Responses were collected through mail, e-mail, or fax.

Cooperation for the survey:

Japanese Chamber of Commerce and Industry of Chicago (member companies: 400)Japan Business Society of Detroit (member companies: 280)Japanese Chamber of Commerce of Georgia (member companies: 146)Japan Business Association of Houston (member companies: 80)Japanese Business Association of Portland (member companies: 96)

Japanese Chamber of Commerce and Industry of New York, Inc. (member companies: 350)Japan Commerce Association of Washington, D.C., Inc. (member companies: 111)Japan Business Association of Southern California (member companies: 500)

Survey period:December 2007 to the end of February 2008 (First term)December 2008 to the end of February 2009 (Second term)

Respondents: 148 companies

The following items were surveyed:Attributes of respondents (time and form of expansion into the United States, business contents, the number of employees and their composition)Points taken into consideration in business operationsCurrent status of philanthropic activitiesFields and forms of philanthropic activitiesSupport needed in undertaking philanthropic activitiesReasons for not undertaking philanthropic activities and future plans for philanthropic activities

The following are the results of the survey.

Chapter 4


4.2 Attributes of Respondents (Time and Form of Expansion into the United States, Business Contents, the Number of Employees and their Composition)

(1) Time of expansion into the United StatesIn response to a question about the time of expansion into the United States, 102 of the 148

respondents replied that they expanded in or before 1990 (68.9%), which was the largest number, followed by the answers between 1996 and 2000 (15 companies, 10.1%), between 1991 and 1995 (11 companies, 7.4%), and between 2005 and 2007 (nine companies, 6.1%).

Nearly 70% of the respondents expanded into the United States in or before 1990 (Fig. 4-1).

(2) Form of expansion into the United StatesIn response to a question about the form of expansion into the United States, 132 of the 148

respondents replied that they expanded as an overseas subsidiary (89.2%). Thirteen companies (8.8%) are branches, sales offices, or liaison offices of Japanese companies in the United States (Fig. 4-2).

Nearly 90% of the respondents are overseas subsidiaries.

Figure 4-1 Time of Expansion into the United States

Between 1991 and 199511 companies, 7.4%




No answer3 companies, 2.0%

In or before 1990102 companies, 68.9%

Respondents:148 companies


Fig. 4-2 Form of Expansion into the United States

Branches, salesoces, or liaison

oces of Japanesecompanies in the

United States13 companies, 8.8%


Overseas subsidiaries132 companies, 89.2%

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(3) Business contentsIn response to a question about business contents, 77 of the 148 respondents replied that they

are engaged in the service industry (52.0%), and the manufacturing industry followed (62 companies, 41.9%) (Fig. 4-3).

Nearly half of the respondents are engaged in the service business.

(4) Number of employeesIn response to a question about the number of employees, 39 of the 148 respondents replied

that they have 11 to 50 employees (26.4%). The second largest answer was 101 to 500 employees (34 companies, 23.0%), followed by 10 employees or less (33 companies, 22.3%).

Nearly 85% of the respondents are small and medium-sized enterprises with not more than 500 employees (Fig. 4-4).


Fig. 4-3 Business Contents


Services77 companies, 52.0%Manufactuing(including manufacture and sale)

62 companies, 41.9%


Fig. 4-4 Number of Companies by Employee Size

4 companies, 2.7%8 companies, 5.4%

10 companies, 6.8%

34 companies, 23.0%

20 companies, 13.5%

39 companies, 26.4%

33 companies, 22.3%

0, 0.0%

10 or less

501 to 1000

11 to 50

1000 to 5000

51 to 100

5000 or more

101 to 500

No answer


(5) Number of Japanese employeesRegarding the number of Japanese employees, 33 of the 148 respondents replied that they hold

50 to 99 Japanese employees (22.3%). The answers 10 to 19 Japanese employees (25 companies, 16.9%), 1 to 4 Japanese employees (22 companies, 14.9%), and 20 to 29 Japanese employees (21 companies, 14.2%) followed (Fig. 4-5).

The largest number of companies replied that their Japanese employees account for 50 to less than 100% of the entire staff (33 companies, 22.3%). The replies that such percentage is 1 to less than 5% are second largest in number (26 companies, 17.6%). In nearly half of the respondent companies, Japanese employees account for less than 20% of the entire staff (Fig. 4-6).


Fig. 4-5 Number of Japanese Employees

6 companies, 4.1%

4 companies, 2.7%

21 companies, 14.2%

14 companies, 9.5%

33 companies, 22.3%

8 companies, 5.4%

22 companies, 14.9%

15 companies, 10.1%

25 companies, 16.9%

010 to 1950 to 99

1 to 420 to 29100 or more

5 to 930 to 49No answer/Unknown


Fig. 4-6 Percentage of Japanese Employees

4 companies, 2.7%

6 companies, 4.1%

33 companies, 22.3%

16 companies, 10.8%

18 companies, 12.2%

3 companies, 2.0%

26 companies, 17.6%

17 companies, 11.5%

25 companies, 16.9%

5 to less than 10%30 to less than 50%No answer/Unknown

0 to less than 1%10 to less than 20%50 to less than 100%

1 to less than 5%20 to less than 30%100%

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4.3 Points Taken into Consideration in Business Operations

(1) Consideration for acting as a corporate citizen in the United StatesResponding to a question about the points they take into consideration as a corporate citizen

in operating business in the United States, 104 of the 148 respondents cited corporate ethics and compliance (70.3%), which was the largest number, followed by those citing enrichment of customer relations (87 companies, 58.8%), contributing to local communities where the company operates (51 companies, 34.5%), and creating and maintaining employment (45 companies, 30.4%) (Fig. 4-7, multiple answers (up to three) allowed). Those citing resource saving, energy saving and other measures to protect the environment were 44 companies (29.7%).


Fig. 4-7 Points Taken into Consideration in Business Operations(multiple answers (up to three) allowed)

Corporate ethics and compliance

Enrichment of customer relations

Contributing to local communities where thecompany operates

Creating and maintaining employment

Resource saving, energy saving and othermeasures to protect the environment

Fullling tax liability

Management transparency and informationdisclosure

Contribution to local economy

Cooperative relationship betweenmanagement and labour

Technology transferInformation disclosure and other responsive

actions in situations of misconduct orcontingency planning

Dividends to stockholders

Mcnat (supporting art activities)

Others0

104 companies 70.3

87 companies58.8

51 companies, 34.5

45 companies, 30.4

44 companies, 29.7

44 companies, 29.7

30 companies, 20.3

27 companies, 18.2

24 companies, 16.2

9 companies, 6.1

8 companies, 5.4

6 companies, 4.1

2 companies, 1.4

5 companies, 3.4 10 20 30 40 50 60 70 80


(2) Local CSR policies originally established and their contentsOut of the 148 respondents, 88 companies (59.7%) replied that they have established local CSR

policies originally, independent of the headquarters in Japan. The most common was personnel policy (49 companies, 33.1%), followed by policy on environment (40 companies, 27.0%), and policy on human rights (37 companies, 25.0%) (Fig. 4-8, multiple answers allowed).

As more and more companies are participating in the United Nations Global Compact, corporate activities in the fields of the environment, human rights, and labor have come to attract attention globally. Japanese companies expanding into the United States are also keen on activities in these fields as global companies.

When asking those 88 companies about the contents included in their local CSR policies, the most common answer was recruiting and training without regard to age, gender, disability or ethnicity (63 companies, 71.6%), followed by recycling (33 companies, 37.5%), and regulations on harmful substances, improvement of employability (employees capability for better employment), and improvement of work-life balance (balance between the employees work and life) (21 companies each, 23.9%) (Fig. 4-9, multiple answers allowed).

Based on the Green New Deal advocated by the administration of U.S. President Barack Obama, which came into office in 2009, the field of the environment will attract more attention and CSR activities in this field will be further promoted in the United States. In addition, the necessity of diversity in management has been emphasized since the late 1980s, and U.S. companies now regard the promotion of diversity as a crucial part of their corporate strategy. Diversity is also a very important factor for CSR activities of Japanese companies that are expanding into the United States. They are intending to incorporate environmental policy and personnel policy, including human resource training and education, into their overall CSR policies.

88 companies asked

Fig. 4-8 Local CSR Policies (multiple answers allowed)

Personnel policy

Policy on environment

Policy on human rights

Policy on community affairs

Policy on procurement

Policy on customer satisfaction

Policy on mcnat

No specific policy

49 companies, 33.1

40 companies, 27.0

37 companies, 25.0

30 companies, 20.3

18 companies, 12.2

15 companies, 10.1

5 companies, 3.4

60 companies, 40.5

403020100 5 15 25 35 45

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A Recruiting and training without regard to age, gender, disability or ethnicity B Recycling C Regulations on harmful substances D Improvement of employability (employees' capability for better employment) E Improvement of work-life balance (balance between work and life of employees) F Consideration of human rights and work environment when forming procurement policy G Green procurement H Information disclosure, communication, transparency I Responsible re-structuring and withdrawal J Promoting fair trade K Guidelines for eco-conscious production and/or eco-design L Developing innovative products/services in response to diverse market expectations, i.e.

universal design products M Introduction of renewable and/or alternative sources of energy N Pro-active stakeholder communication O Technology transfer to entrepreneurs and less advantaged areas P No specific policy

0 10 20 30 40 50 60 70 80

ABCDEFGHIJKLMNOP

88 companies askedFig. 4-9 Contents of Local CSR Policies (multiple answers allowed)

63 companies,71.6

33 companies, 37.521 companies, 23.921 companies, 23.9 21 companies, 23.9

15 companies, 17.0 14 companies, 15.9

11 companies, 12.5 9 companies, 10.2 9 companies, 10.2





4.4 Current Status of Philanthropic Activities

Out of the 148 respondents, 93 companies replied that they are undertaking philanthropic activities (62.8%) (Fig. 4-10).

Fig. 4-11 shows the results of the questionnaire survey conducted by the Japanese Chamber of Commerce and Industry of New York, Inc. with its member companies (274 companies) in October 2008. Those replying that they engage in corporate philanthropy account for 84% of the 197 respondents (Fig. 4-11).

According to the survey we conducted across the United States, including major cities, nearly 60% of respondent companies are undertaking philanthropic activities, and the above-mentioned questionnaire survey conducted in New York, where many of the headquarters of Japanese companies are located, shows a higher percentage of nearly 80%. These figures indicate that a high percentage of Japanese companies engage in philanthropic activities in the United States.

Fig. 4-10 Current Status of Philanthropic Activities

No answer1 company, 0.7%

Undertaking93 companies, 62.8%

Not undertaking54 companies, 36.5%


Source: "2008 JCCI MEMBER BUSINESS SURVEY RESULTS The State of Japanese-Aliated Corporations in the New York Metropolitan Area," JAPANESE CHAMBER OF COMMERCE & INDUSTRY OF NEW YORK, INC., MEMBER-SHIP DIRECTORY 2008-2009, p.52

Fig. 4-11 Corporate Philanthropic Activities

NO 16%

YES84%

Does your company engage in any type of corporate philanthropy?

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By employee size, only 48.9% (45 companies) of companies that have not more than 100 employees are undertaking philanthropic activities, while the percentage is as high as 81.8% (18 companies) for those with over 501 employees and 88.2% (30 companies) for those with 101 to 500 employees (Table 4-1).

By the year of expansion into the United States, only 35.3% (6 companies) of companies that expanded in or after 2001 are undertaking philanthropic activities, while 61.5% (16 companies) of those that expanded between 1991 and 2000 as well as 67.6% (69 companies) of those that expanded in or before 1990 engage in such activities (Table 4-2).

These figures imply that the larger the company is and the longer a company has conducted business in the United States, the more apt the company is to engage in philanthropic activities.

Table 4-1 Philanthropic Activities by Employee Size

Undertaking Not undertaking No answer Total N=148

100 employees or less 4548.9%46

50.01

1.192

100.0Upper: Actual number

101 to 500 employees 3088.24

11.834

100.0Lower:

Over 501 employees 1881.84

18.222

100.0

Total 9362.854

36.51

0.7148

100.0

Table 4-2 Philanthropic Activities by Year of Expansion into the United States

Undertaking Not undertaking No answer Total N=148

In or before 1990 6967.632

31.41

1.0102

100.0Upper: Actual number

Between 1991 and 2000 1661.510

38.526

100.0Lower:

In or after 2001 635.311

64.717

100.0

No answer 266.71

33.33

100.0

Total 9362.854

36.51

0.7148

100.0


4.5 Fields and Forms of Philanthropic Activities

(1) Fields of philanthropic activitiesWhen asking the 93 companies that are undertaking philanthropic activities about activity

fields, the most common answer was local community projects (68 companies, 73.1%), followed by education/sports (55 companies, 59.1%) (Fig. 4-12, multiple answers allowed).

(2) Forms of philanthropic activitiesRegarding the forms of philanthropic activities, 79 companies out of the 93 questioned replied

that they offer financial support (donations/sponsorship, etc.) (84.9%). Those adopting employee volunteers were the second largest in number (50 companies, 53.8%), followed by those making contribution of products and services in-kind (48 companies, 51.6%) (Fig 4-13, multiple answers allowed).

93 companies askedFig. 4-12 Fields of Philanthropic Activities (multiple answers allowed)

Local community projects

Education/Sports

Arts/Culture

Disaster support/relief

International exchange/cooperation

Environment

Healthcare/Social welfare

Humanitarian support

Academic study/research

Preservation of cultural assets

Others

68 companies73.1%

55 companies, 59.1%

41 companies, 44.1%

39 companies, 41.9%

34 companies, 36.6%

33 companies, 35.5%

32 companies, 33.3%

25 companies, 26.9%

25 companies, 26.9%

5 companies, 5.4%

7 companies, 7.5%

80706050403020100

93 companies askedFig. 4-13 Forms of Philanthropic Activities (multiple answers allowed)

Financial support(donations/sponsorship, etc.)

Employee volunteers

Contribution of productsand services in-kind

Self-organized initiatives(scholarship payment, organization of events, etc.)

Providing company facilitiesfor external activities

Others

50 companies, 53.8%

79 companies, 84.9%

48 companies, 51.6%

26 companies, 28.0%

14 companies, 15.1%

7 companies, 7.5%

0 20 40 60 80 100

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4.6 Examples of Philanthropic Activities

Out of the 148 survey respondents, we have collected 191 concrete examples from 93 companies that are undertaking philanthropic activities.

The following are the characteristics of each field and major examples.

(1) Local community projectsCited examples concerning this field were the largest in number, at 63.The most common is support for nonprofit organizations and nongovernmental organizations

with their local activities. Specifically, employee activities such as food drives and toy drives, which are activities to collect food, toys and other goods from corporate employees and donate them to local organizations, are carried out widely.

Many companies also cited donations by employees and matching-donation programs to large-scale intermediate support organizations, such as the Red Cross and United Way, which are carrying out activities all over the United States.

Furthermore, some companies hold a charity event or an exchange event with local residents through Japanese American Associations and Japanese Chambers of Commerce and Industry, and others encourage employee volunteer activities.

One example that shows area characteristics is a support program for local administrative agencies, such as fire departments and the police, in California, where disasters such as wildfires frequently occur. As firefighters and the police play a significant role in protecting the lives of local residents, multiple companies support their activities in cooperation with local administrative agencies.

(2) Education/Sports42 philanthropic activities were cited in the field of education and sports. The number is the

second largest.In particular, support activities for Japanese educational institutions are common. Specific

examples are donations to Japanese schools and Japanese language supplementary schools, in-kind donations for charity bazaars held by these institutions, and donations to nonprofit organizations that support the promotion of the Japanese language in the United States.

In addition to financial support and in-kind donations, several employee volunteer activities are also observed. Some companies hold a lecture meeting run by employees for local schools, accept local students visits to their facilities, or offer internships for students with disabilities.

There are also cases where companies offer scholarships for employees children as a support program for the employees.

(3) Healthcare/Social welfareThere were 29 philanthropic activities in the field of healthcare and social welfare.The most common is support via a large-scale nonprofit organization or foundation, especially

in the form of financial support and employee volunteers for certain campaigns, such as charity events and walking rallies held by the Red Cross or other organizations, such as the March of Dimes, which work toward reducing premature births, and the Pink Ribbon Campaign for eliminating breast cancer.

(4) International exchange/cooperation23 cited philanthropic activities were in the field of international exchange and cooperation.


The most common is in the form of sponsorship for events held by Japanese Chambers of Commerce and Industry, Japanese Associations, or Japanese Companies Associations for the purpose of promoting cultural exchange between Japan and the United States. Cited events include the Japan Day held every summer in New York since 2007, the National Cherry Blossom Festival held every spring in Washington, D.C., and the Japan Fest held in Georgia.

There are also several self-organized programs, such as a seminar to enlighten U.S. business persons on mutual relationships between Japan and the United States, and a program to solicit high school teachers nationwide for overseas training.

(5) Arts/Culture11 philanthropic activities were cited in the field of arts and culture.In particular, companies positively offer support to art-related public facilities, organizations,

and foundations in major U.S. cities like New York and Los Angeles. Many of these companies cite their financial support for representative facilities and organizations in the field of arts and culture, such as the Lincoln Center, Metropolitan Museum of Arts, MOMA, and American Museum of Natural History.

(6) EnvironmentThere were 10 philanthropic activities in the field of environment.In many of these cases, financial support for environmental organizations and employee

volunteer activities in collaboration with such organizations are promoted. Some companies establish an environmental preservation program together with an environmental organization, foster environmental leaders, support other environmental programs, and promote employee volunteer activities.

(7) Disaster support/reliefThere were seven philanthropic activities in the field of disaster support and relief.Specific examples include monetary donations via the Red Cross and other organizations for

victims of Hurricane Katrina and the flood damage in New Orleans.

(8) Academic study/research and othersSix philanthropic activities were cited in the field of academic study/research and others.These include financial support for the construction of a university library of Japanese books

and support for a Japanese business economy center established in a business school. One company provides research institutions with data on air that is collected during flights in the course of its main business.

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4.7 Support Needed in Undertaking Philanthropic Activities

When the 93 companies that are undertaking philanthropic activities were asked about needed support, 55 companies replied that they need information about programs in which participation is possible with a limited budget (59.1%). The second most common answer was examples of activities of other Japanese companies engaged in philanthropic activities (50 companies, 53.8%). Other questionnaire options were also chosen, which implies that companies require various types of information for continuing their activities, not only information limited to specific support (Fig. 4-14, multiple answers allowed).

93 companies askedFig. 4-14 Support Needed in Undertaking Philanthropic Activities (multiple answers allowed)

Information about programs in whichparticipation is possible with a limited budget

Examples of activities of other Japanesecompanies engaged in philanthropic activities

Information sharing/knowledge sharingfrom other Japanese companies

Information about collaborating in programsby the Japanese Chambers of Commerce

and Industry, Japan Foundation, etc.

Information regarding NPOs, NGOs, culturalorganizations, public interest organizations, etc.

Support in publicizing philanthropic activities

Assistance for personnel in charge ofphilanthropic activities, e.g., consulting

Others

50 companies, 53.8%

43 companies,46.2%

35 companies, 37.6%

34 companies, 36.6%

31 companies, 33.3%

8 companies, 8.6%

5 companies, 5.4%

55 companies,59.1%

0 10 20 30 40 50 60 70


4.8 Reasons for Not Undertaking Philanthropic Activities and Future Plans for Philanthropic Activities

(1) Reasons for not undertaking philanthropic activitiesWhen asking the 54 companies that are not undertaking philanthropic activities to choose

reasons therefor (up to two), 38 companies replied that they cannot spare human resources for these activities (70.4%). The second most common answer was no budget for these types of activities (20 companies, 37.0%), and one company chose the answer not thought to be necessary (1.9%) (Fig. 4-15, multiple answers allowed).

(2) Future plans for philanthropic activitiesOut of the 54 companies that are not undertaking philanthropic activities, more than half

replied that they have no plans to do so in the future (31 companies, 57.4%), while 18 companies are currently reviewing the situation (33.3%) (Fig. 4-16).

54 companies asked

Fig. 4-15 Reasons for Not Undertaking Philanthropic Activities (multiple answers (up to two) allowed)

Cannot spare humanresources for these activities

No budget for these typesof activities

Don't know how to start/what to do, etc.

Not thought to be necessary

Others

38 companies

survey of philanthropic activities by japanese companies ... · survey of philanthropic activities...

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