WASHINGTON - The nation's largest financial institutions gave $599 million of corporate donations in 1999, a survey conducted by the Financial Services Roundtable found.
The roundtable, which represents 87 of the nation's biggest banking, insurance, and investment firms, said the charitable giving figure was significantly higher than previous years' surveys of its membership - a nearly 43% increase over 1998. Fifty-five member institutions responded to the most recent survey. It was not reported how many respondents were covered in prior surveys, of 1997 and 1998.
The roundtable also found that members made $293 billion in community development loans in 1999, the first year the topic was included in the survey of community involvement.
In a year of record profits and soaring stock prices, roundtable members contributed to charities as diverse as donating houses to North Carolina flood victims, bringing Degas paintings to a New Orleans museum, and giving 500 customers who could not afford personal computers special phones to access home banking.
"The financial services industry is among the more involved, most charitable sectors," said Steve Bartlett, president of the Financial Services Roundtable, which surveyed its members on their donations, community lending, and employee volunteer work.
His comments were backed up by an informal comparison of the roundtable's donations data to data compiled by the AAFRC Trust for Philanthropy. The latter organization said overall corporate giving rose 14.2% last year, to $11.02 billion.
According to the roundtable study, members last year gave $114 million to medical and human services groups, almost $110 million to educational causes, $107 million to community development groups, and $72 million to cultural organizations. Of those donations, $36.8 million represented matching grants to employee contributions.
Bank of America, the fifth-most-profitable company in America in 1999, was the largest roundtable donor, giving $95.5 million of its $680 billion of assets to charity. A breakdown of donations by other roundtable members was not available.
The bulk of roundtable member contributions went to 33 nonprofit beneficiaries including the American Cancer Society, American Red Cross, America's Promise, Boy Scouts and Girl Scouts, Catholic Charities, Junior League, Nature Conservancy, Special Olympics, and the United Way.
Additionally, direct contributions were made to victims of natural disasters. Associates First Capital Corp. donated 35 manufactured homes, valued at $1 million, to North Carolina flood victims, as well as three trailers to truck food, water, and emergency supplies to Oklahoma and Kansas communities hit by tornadoes.
A year before the vote recount in Florida, Bank One Corp. funded Kids Voting, an Ohio program to educate students about the importance of voting and civic participation.
First Tennessee created a school-to-home communication service for more than 650 Tennessee schools that lets parents hear messages recorded by their children's teachers over a phone.
Wachovia Corp. committed $100,000 to expanding the Salvation Army facilities in Columbia, S.C.
But some community groups said banks are not doing enough.
Robert Gnaizda, policy director and general counsel of the Greenlining Institute, said that financial institutions often give much more in compensation to their top executives than they are to any charities. He also noted that much of the giving was not going to low- and moderate-income projects, but was being used to fund prep schools or private universities.
"We believe that philanthropic contributions should always exceed the aggregate top five compensation packages to executives," said Mr. Gnaizda. "They should also measure their philanthropic contributions as a percentage of their pretax income, instead of the basic dollar amount."
Mr. Gnaizda said many of the biggest banks are giving large amounts of money, but that it is a "relative pittance" compared to the amount of bank profit.
The roundtable, which has been conducting the community involvement survey for three years, calculated its members' community development lending for the first time. It found that in 1999, members made $293 billion in community development loans.
As expected, the bulk of the credit came from banks, which are required by the Community Reinvestment Act to make loans, to invest, and to provide banking services in the communities in which they operate.
The roundtable's report on the survey noted that the loans are profitable, though it did not provide any data.
"Community lending and investment is simply good business for roundtable members," the report said. "Through community lending and investment, roundtable members reach wider segments of their market areas, often attracting customers who might not otherwise have made contact with the institutions."
The largest share of the community development lending - $1.57 billion - went to fund housing in poor areas, for which banks get not only CRA credit from their regulators but also federal low-income housing tax breaks.
Roundtable members in the survey group invested $89.2 million in community development corporations, which in turn supplied capital to build homes and businesses in poor areas. For example, Chase Manhattan committed $1 million last year to a fund that provides venture capital to minority- and women-owned businesses in low- and moderate-income communities across the country.
Additionally, surveyed institutions gave five million hours of employee time to community service projects in 1999. About half of the institutions surveyed provide low-cost checking or check-cashing services to low-income customers.
Rob Blackwell contributed to this story.
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