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GM and Ford-give-back-through-charities-for-education
General Motors

March, 2011

he General Motors Foundation is ramping up charitable spending again, restoring millions of dollars in aid cutback in 2009 as automakers fought to survive bankruptcy.

But the foundation, GM's charitable arm, has a new focus: education.

While the foundation historically has been a stalwart supporter of the arts and community causes, and will continue to underwrite those pursuits, it increasingly is throwing its philanthropic weight behind Detroit's ailing public schools and other educational institutions.

The shift parallels state and national movements among corporate foundations, as they emerge from the recession with a vigor for investing in education.

The amplified commitment to education isn't totally selfless on the part of the businesses that spawned them — particularly auto companies — which need well-educated workers to compete in their global industry.

"Education has always been a priority, but it's an even bigger priority because everyone is worried about making sure we have a trained work force in Michigan that's prepared," said Rob Collier, president of the Council of Michigan Foundations, in Detroit and Grand Haven.

In the past few months, the GM foundation has been particularly visible about donating to educational causes. It announced a $27.1 million gift to the United Way of Southeastern Michigan in December, to boost high school graduation rates — its largest gift ever.

And in February, it announced a $4.5 million nationwide annual scholarship program to assist 1,100 college students, especially those studying math, science and engineering.

"It's nice and magnanimous, but it's also a necessity," said Kristin Dziczek, director of labor and industry at the Ann Arbor-based Center for Automotive Research.

Like the General Motors Foundation, GM the company is pitching in on education. The automaker auctioned its first sellable Chevrolet Volt, raising $225,000 for math and science programs in Detroit schools.

GM CEO and Chairman Daniel Akerson made a personal donation of $10,000 to Detroit Public Schools athletics last fall.

And North American President Mark Reuss, in an impassioned speech last year, vowed to support public education in the region and assist efforts to establish specialized academies with smaller class sizes.

"We don't want to be the generation that walks away," said Reuss, also a GM Foundation board member. "This country simply can't afford to fall any further behind the rest of the industrialized world in educating its citizens."

Others heed call

Other automakers also are heeding the call.

The Ford Motor Co. Fund sponsors college scholarships, and has partnered with public schools to advance technical learning and other skills through its Ford Partnership for Advanced Studies.

Ford's charitable arm works with a network of charter schools to provide college prep courses in math, science and the humanities through the Henry Ford Learning Institute.

The Chrysler Foundation backs several scholarships and gives to public education, including a recent $125,000 gift for high school robotics teams.

Steve Wasko, a DPS spokesman, said GM's $27.1 million gift represented a "turning point" in corporate support for the financially troubled school system. Other companies have also pitched in.

In May, the school district received its largest corporate donation ever, $2.1 million from Pittsburgh-based PNC Bank.

The GM Foundation's stepped-up spending is a relief to nonprofits hit hard during the recession, when many of their key donors pulled back.

Others, such as the Ford Fund, also plan to pump more money into organizations in need this year. But spending remains constrained, and it could be years before it returns to pre-recession levels.

"The good news is there has been a good pick up in spending," Collier said. "The bad news is it will be another two years before endowments are back to where they were."

Biggest recipients

At the height of the recession in 2009, the GM foundation — the state's largest corporate foundation — slashed spending to $8 million, compared to $23.1 million in 2008. Its list of grant recipients shrank from 17 pages to four pages, according to Internal Revenue Service filings.

Among its biggest local recipients that year: the United Way of Southeastern Michigan, Focus: Hope, the Michigan Opera Theatre and the Detroit Renaissance Foundation.

Like other corporate foundations, its coffers were hit hard by the Wall Street meltdown. As a separate entity from the automaker, which itself hasn't made a contribution to it since early 2000, the foundation relies heavily on money earned by investing its assets.

This year, its spending in Michigan and nationwide could be in the range of $15 million-$20 million, depending on board approval, said John Montford, the foundation's president. The GM fund doesn't issue a separate tally for spending in specific categories, such as education.

Likewise, the Ford Fund hopes to increase spending this year to $24 million, up from $19 million in 2010.

But its largesse is still far short of the $36 million it gave in 2007, prior to the recession.

Despite the cutbacks, the Henry Ford Institute and the United Way of Southeastern Michigan remain among its biggest recipients last year.

"Even in the past few years, when we've had our challenges as a business, we've continued to invest in community," said Jim Vella, the Ford Fund's president.

Meanwhile, the Chrysler Foundation is running down its reserves. The automaker, its only source of funding, halted contributions in mid-2008, and has yet to say when they'll resume.

Last year, the foundation's charitable spending fell to $900,000, down from $20.8 million in 2008.

Jody Trapasso, the foundation's president, said Chrysler's immediate priorities are turning a profit and repaying government loans. But FiatSpA and Chrysler CEO Sergio Marchionne says he is committed to giving back to the community.

"We haven't disengaged from our communities," Trapasso said. "We're trying to do what ever we can with the resources we have."



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