Company Giving Feels Effects of Mergers

By DEBRA E. BLUM

Mergers and acquisitions among large companies can have a profound impact on the companies’ philanthropy, according to a new report.

Published by the Conference Board, a New York research group financed by 3,000

companies, the report is based on a study of 26 businesses that were involved in some of the biggest mergers and acquisitions during the 1990’s. The report examines the impact of the transactions on what the board calls corporate citizenship — how a company is involved in and supports the communities where it operates.

Among the study’s findings:

• Merging companies that have their headquarters in the same region are more likely to cut contributions budgets and to reduce the staff size of corporate-giving offices than are companies based in different areas.
• Banks and other financial institutions may be more inclined and financially able to increase the level of contributions after a merger than are companies in other industries.
• In order to assuage the concerns charities may have about losing support from companies that are merging and moving their headquarters or business operations, it has become common practice for companies to pledge millions of dollars to organizations in the region they are leaving.

The report cites the example of the merger last year of Honeywell International and AlliedSignal. Within days of the announcement that Honeywell would be moving its headquarters from Minneapolis to Morristown, N.J., where AlliedSignal was located, the companies promised to give to Minneapolis charities in 2000 the same amount Honeywell had been giving each year before the merger — about $7-million.

The report cites other strategies employed by merging companies to win the support of worried non-profit and community leaders. For example, a few years ago when SBC Communications was in negotiations to acquire Nevada Bell and Pacific Bell in California, the Texas-based company published a booklet summarizing its record of charitable giving in the regions where it operated.

Copies of the report, “The Impact of Mergers and Acquisitions on Corporate Citizenship,’’ will be available soon from the Conference Board’s customer-service department at (212) 339-0345, or from order@conference-board.org. The report may also be ordered from the publications section of the board’s Web site at http://www.conference-board.org. Refer to publication No. 1272-00-RR. The report costs $45 for Conference Board members and $180 for all others.