Corporate
Philanthropy in the New Urban Economy: The Role of
Business-Nonprofit Realignment by Leonard
Nevarez Department of
Sociology Vassar
College Accepted for publication in
Urban Affairs Review November
2000 To study corporate philanthropy,
I used ethnographic and quantitative methods to compare
business support for community nonprofits (a) among the
three new urban economy sectors and (b) against local banks,
a control group from the traditional urban business
community. With their centrality in financial and civic
networks, local banks are leading institutions in the
traditional urban business community (Kono et al. 1998;
Mintz and Schwartz 1985, 196). However, they do not
intervene in city politics as much or strategically as
developers, who are usually the largest business
contributors to electoral campaigns (e.g., Warner, Molotch
and Lategola 1992, 96-98) and philanthropic areas like as
the arts (Whitt and Lammers 1991). Thus, banks offer a
reasonable baseline of significance with which to compare
the new urban economy sectors. Out of the vast array of
community nonprofits to study, I purposively selected three
fields that exemplify differing civic traditions and
political consequences. Importantly, the first field is
found inside the business community's traditional civic
arena, whereas the last two lie outside. The first,
traditional charities, includes venerable health,
welfare, and social service providers like the United Way,
the Boys and Girls Club, Red Cross, and the Police
Activities League. These nonprofits characteristically have
a politically quiescent or centrist thrust that makes them
suitable for generating a "nonpolitical" ideology that
contrasts to the "political" efforts of the business
community's progressive opponents (see Hyland, Russell, and
Hebb 1990; Rose-Ackerman 1980; Piven and Cloward 1977).
Philanthropy and voluntary service to these traditional
charities also confers upon business leaders a measure of
status in the local "old boys network." A Santa Monica
restaurateur explained to me how this worked: "You were
president of the Boys Club, then you were president of the
chamber, and then you got on the city council, and you did
all the favors for all your buddies that you knew." These
charities can also reinforce local dependence when, for
example, the traditional urban business community's favored
nonprofits join local chambers of commerce and become
clients of local businesses like banks and phone companies.
For these reasons, corporate philanthropy to traditional
charities serves as an indicator of conventional
business-nonprofit alignments in the traditional civic
arena. The second community nonprofit
field, environmental organizations, refers to locally
headquartered organizations (as opposed to local chapters of
national groups) that address ecological impacts of human
systems, habitat and animal conservation, and other
environmental issues. In the research sites, they mobilize
grassroots activism and legal action against unwanted
development and growth, and they advocate local policies,
like environmental regulations and land-use restrictions,
that businesspeople usually lambaste as hazardous to job
growth and a "probusiness" climate (Pertschuk 1982). For
this reason, growth coalitions and traditional industry
often view environmental groups as "the enemy." Corporate
philanthropy to environmental organizations thus indicates
an unconventional and more progressive alignment between
business and nonprofits that lies outside the traditional
civic arena. The final community nonprofit
field, higher education, refers to local universities
and community colleges, institutions that assume greater
significance in the new urban economy as high-tech leaders
look to them to conduct basic research and train future
workers. At least in the places I studied, higher
educational institutions have had poor "town and gown"
relations and weak links to the traditional urban business
community. Therefore, corporate philanthropy to higher
education represents a second site for business-nonprofit
alignment outside the traditional civic arena, albeit one
with perhaps less ideological antagonism to the business
agenda than environmental organizations. I gathered quantitative data on
two forms of philanthropy&endash;financial gifts and
personal service by either the firm or top-level
executives&endash;for the largest nonprofit institutions in
the three targeted fields at each of the three research
sites, for a total of nine nonprofits. To place these data
in their ethnographic context, between 1996 and 1998 I
interviewed 75 informants whom I organized into two pools.
The first was a snowball sample of 43 executives or business
organization leaders from the software, entertainment, and
tourism sectors. I asked them about how and why they
supported community nonprofits through philanthropy and
collaboration, as well as comparable attitudes and behavior
that others in their industry held. The second informant
pool consisted of 32 purposively sampled community leaders,
such as traditional business leaders, local politicians, and
community nonprofit staff; it also included executive and/or
development officer from the nine targeted nonprofits, as
well as five environmental organizers and two social service
nonprofit executives from other prominent community
nonprofits. I also gathered ethnographic data from corporate
and organizational brochures, Internet websites, and
newspaper articles. Before I examine
business-nonprofit alignment in the three targeted fields, I
address how typical philanthropy is among these sectors.
Although my nonrandom sampling technique prevents me from
making probablistic generalizations, at least three fourths
of my entertainment and tourism informants gave some kind of
money, in-kind gift, or service, even when their generosity
was modest. By contrast, only between one third and one half
of my software informants said their firms undertook
philanthropy of any kind. Given that my sample favors
industry leaders, these rough levels suggest that for
software firms, philanthropy does not appear to be normative
behavior. In nonphilanthropic firms, informants usually
offered explanations like, "We don't have the time or the
money right now to participate very fully." Executives from
younger companies frequently cited having insufficient
profits for philanthropy (although this factor did not
always deter younger or unprofitable companies from giving,
or encourage older or profitable companies to give). As for
their lack of voluntary service, many executives cited a
lack of free time. In a typical comment, a software CEO told
me, "I travel for maybe 40% of my time, so I can't get
involved in projects where there are regular meetings. I end
up dropping the ball because I've got to do my
job."
in Regime Politics