HOW BUSINESS HELPS SCHOOLS All but 2% of the companies responding to a Fortune poll contribute to education -- but some are more committed than others. Want ideas? Read on.
(FORTUNE Magazine) – BY NOW it is clear: Corporate involvement in public school reform has become serious business. Since the education system has failed to check the erosion of basic skills, companies are proposing increasingly innovative measures to help schools turn out a new generation of workers who can read, write, compute, and think. Do you buy the argument that remedial education is the automatic answer to dropout prevention? Chevron doesn't. By 1992 it will have given $1.5 million to the Stanford University Accelerated Schools program to expand a project, currently in place in 39 schools, that builds the skills of disadvantaged youngsters by accelerating their elementary school studies. Want to really make a school partnership work? Cigna not only supplies equipment and employee volunteers to the five Philadelphia schools it has adopted, but also provides management training for school administrators as part of the $1.5 million it has committed over a three-year period ending in 1991. The list of such imaginative programs is growing. To find out just what America's leading companies are doing to save public schools, and to encourage others by their example, FORTUNE polled all FORTUNE 500 and Service 500 companies. Many of the questions were the same as those posed last year in a longer FORTUNE magazine-Allstate Insurance survey of the same group of corporations. In 1989, 404 companies returned their questionnaires. This year, 305 responded. Only seven of this year's companies, 2%, do nothing for education, down from 4% in 1989. Though 41% of the companies that participated in the 1990 poll give less than $100,000 annually to public schools, 28% donate from $100,000 to $500,000, and a laudable 18% contribute $1 million or more a year. More impressive, 70% of top executives are now actively involved in their companies' efforts. The survey asked companies for a brief description of any interesting public school programs in which they are involved. This year's responses were heartening, and rarely brief. The table on the following pages highlights several strategies that 88 of the most involved companies are taking. The directory, which includes some companies not on either FORTUNE 500 list, generally describes only elementary and high school initiatives, although each company is credited with its entire annual financial contribution to education.
The biggest benefactors are corporate household names. In its 1989 annual report, International Business Machines mentioned almost casually that it had targeted a hefty $46 million (between 1989 and 1993) toward improving elementary and secondary education. The company is no newcomer to the field -- it first declared its commitment to education in the early 1930s -- which may explain why it is now the kingpin of corporate givers. IBM's worldwide contributions to all levels of education in 1988 totaled $81 million, according to the Taft Group, a firm in Rockville, Maryland, that tracks corporate contributions using IRS data, company reports, and matching grants. (Therefore, this figure is higher than IBM's own calculations.) No. 2 in spending on the Taft list is Procter & Gamble, with $19 million, followed closely by General Electric and AT&T, with $18 million each. Rounding out the top ten, with contributions from $16 million to $8 million, are Du Pont, Minnesota Mining & Manufacturing, Shell Oil, Ford Motor, Eastman Kodak, and Boeing. Where is the money going? Over 80% of the companies in the FORTUNE survey report that they give to colleges or universities. Graduate programs and high schools come next. Last year graduate programs took second place with 57% support, followed closely by high schools with 55%. The order was reversed this year, with 58% of companies contributing to high schools and 52% to grad schools. That's because as the importance of early academic intervention becomes better known, the numbers are turning in favor of the lower grades. Over the past few years, IBM and GE have shifted contributions toward elementary and secondary schools, and US West and Texas Instruments are even funding preschool efforts. Mobil, which currently targets an estimated 5% of its current $7 million education budget on kindergarten through 12th grade, may soon increase that percentage by supporting programs that encourage more minorities and women to become science teachers. The ways in which companies can help American schools -- and American students -- include contributing money, offering summer jobs to children and teachers, and encouraging employee involvement. While the majority of this year's FORTUNE respondents participate mainly by writing a check, a significant 50% or more report more direct links, with employees serving on school boards or as tutors in classrooms. Nearly half of all companies polled underwrite school partnerships in which corporations adopt one or many schools. School partnerships are what the partners make of them. Involvement can range from minimal (a Central Fidelity bank in Richmond has run a minibank at Chimborazo Elementary since 1988) to substantial (Cray Research gave $500,000 last year to its 70 school partners in northwest Wisconsin to promote math and science). The National Center for Education Statistics reports that 40% of public schools were involved in partnerships during the 1987-88 school year, up from 17% in 1983-84. Businesses sponsored 70% of all partnerships in 1987-88. Meanwhile, political efforts to reform public schools -- lobbying legislatures for educational change or supporting bond issues -- seem to be losing popularity. The 1989 FORTUNE/Allstate survey found that 33% of respondents were pressing for educational change in their states. That number is only 22% this year. In addition, corporate support for educational bond issues has fallen by four percentage points. Successful educational programs are usually the ones close to home. One true pioneer is Climax Molybdenum, a mining subsidiary of Amax. Concerned about the quality of rural education in its Colorado hometown, Climax formed an advisory committee in 1958 to start student scholarships and teacher training programs. Even when prices for minerals, especially molybdenum, fell sharply in the 1980s and Climax was forced to cut its Colorado payroll from 5,000 employees to 1,000, the support continued. Says Terry Fitzsimmons, an Amax public relations director who started with Climax in the 1950s: ''Management could have said that our scholarship programs were just cream, but they didn't. We've been very pleased.'' Banks and insurance companies are pros at making the most of neighborhood connections. All 16 Citibank branches in Florida's Dade County have adopted local schools, and through a special fund the bank is giving out cash grants averaging $500 to local educators who devise ways to cut Miami's dropout rate. Connecticut Mutual Life, ITT Hartford Insurance Group, and Phoenix Mutual Life Insurance have all adopted or funded programs at Hartford schools, providing them with everything from a dance floor to summer jobs for students. Approximately 15% of the Phoenix staff in Hartford, for example, each week tutors fourth-, fifth-, and sixth-graders from Fred D. Wish Elementary School in the company cafeteria. On the theory that good incentives are a good idea, Jostens, the school-ring company in Minneapolis, designed an innovative reward system two years ago for junior high and high school students. Called the Renaissance Program, it encourages students to get high grades in exchange for such perks as reserved parking or exemption from final exams. By September the program will be in effect in 1,000 schools nationwide. Elsewhere, pharmaceutical companies such as Upjohn and Merck are loaning out scientists or opening their corporate labs to teachers for science research projects. Companies are beginning to look at educational contributions the way they've traditionally regarded research and development costs -- as long-term investments. Though 55% of the respondents to this year's FORTUNE poll believe that their educational efforts have made little, if any, impact so far, that number was 75% in the 1989 survey. As in business, companies should look at -- and learn from -- both the successful programs and those that are not working as well. Top managers should also realize that many, perhaps even most, of their investments in the schools may ultimately pay off. Says Albert Shanker, president of the American Federation of Teachers: ''We have hundreds of people struggling to find the same answers. We need a system of sharing and communication.'' With that in mind, FORTUNE presents the following list.
BOX: WHAT COMPANIES ARE DOING TO HELP PUBLIC EDUCATION*
Contribute money 78% Offer students summer or part-time jobs 76% Contribute materials or equipment 64% Encourage employees to run for school boards 59% Encourage employees to tutor or teach 50% Participate in school partnerships 48% Offer teachers summer jobs 26% Lobby legislatures for reform 22% Support tax increases or bond issues 18% Loan executives to schools 12%
*Figures do not add to 100% as companies were allowed to choose more than one answer.
WHERE CORPORATE CONTRIBUTIONS GO*
Preschool 14% Elementary school 27% Junior high school 32% High school 58% Vocational school 38% College 81% Graduate school 52%
*Figures do not add to 100% as companies were allowed to choose more than one answer.
ANNUAL CORPORATE CONTRIBUTION TO PUBLIC EDUCATION
Under $100,000 41% $100,000-$499,999 28% $500,000-$999,999 7% $1 million-$4,999,999 14% $5 million or more 4% No answer 6%
HOW INVOLVED IS TOP MANAGEMENT?
Very involved 32% Fairly involved 38% Not too involved 25% Not at all involved 5%
HAS CORPORATE INVOLVEMENT MADE ANY DIFFERENCE?
Big difference 6% Fair amount of difference 33% Not much difference 48% No difference 7% No answer 6%
CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: WHERE THE MONEY IS GOING