Sunday, September 4, 2005
Springs Industries Inc. of Fort Mill, S.C., wants to comfort victims of Hurricane Katrina, so it plans to send comforters. And sheets. And blankets. The parent company of Wamsutta, Springmaid and Regal bed-and-bath accessories is doing what it knows best to ease the terrible suffering caused by the United States' costliest natural disaster.
Less than a week after the storm devastated the Gulf Coast, dozens of giant corporations such as Springs Industries have offered more than $100 million and all manner of products and services to victims in the region. "And this is just the beginning," said Johanna I. Schneider, executive director of external relations for the Business Roundtable, an organization that represents 160 of the nation's biggest companies.
The speed of the response is unprecedented. "This is the most rapid outpouring of corporate help I've ever seen," said Stephen C. Jordan, executive director of the Center for Corporate Citizenship, an affiliate of the U.S. Chamber of Commerce.
Corporations have a history of opening their coffers and distributing free goods after catastrophes. Their most generous stretch came after the attacks of Sept. 11, 2001, when donations totaled $750 million. Last year's tsunami in South Asia attracted $600 million in corporate donations. Depending on how severe the situation in Louisiana, Mississippi and Alabama becomes, corporate aid could approach the amount donated after the tsunami.
Companies contribute, in part, out of altruism and a sense of community. "It's the right thing to do. It's what many customers have come to expect. And it's part of many companies' overall marketing strategies," said Caryn R. Pawliger, a senior director at the Public Affairs Council, a nonprofit group that trains executives on how to deal with public policy controversies.
But corporations also know that good-heartedness is good business. They are charitable not only to help the helpless but also to benefit themselves.
"Some folks would say that's crass or calculating or opportunistic, but that's how businesses think; these [donations] are an investment in a company's future," said Patricia Lewis, a marketing professor at American University. "How a business conducts itself in the region today will leave an indelible mark on that business's reputation. And given the choice, consumers will be predisposed to do business with companies that have good reputations."
After the tsunami, executives of major corporations decided to coordinate their responses to natural disasters. The Business Roundtable took the lead and now tries to connect companies that want to provide charity with the right people in government and the nonprofit world. Last week, its office was deluged with e-mail offerings from companies, and it helped them get in touch with liaisons at the American Red Cross, the Department of Homeland Security and elsewhere.
But logistics were so problematic that not everything that companies wanted to give could be used right away. Priority was given to the most immediate concerns: housing and transportation. Other types of services had to wait.
Still, companies of every imaginable type have promised to help. Among the most active were drugmakers, auto manufacturers, consumer products and financial services companies, telecommunications firms, and retailers. Oil companies, whose profits have ballooned as the price of gasoline has soared, have also provided millions of dollars toward the recovery.
The biggest single promise of support has come from Wal-Mart Stores Inc., the country's largest retailer. Chief executive H. Lee Scott Jr. called the White House to pledge $15 million to "jump-start" the rescue efforts, the company said. Wal-Mart has a significant presence in the South and is conducting a national campaign to improve the public's perception of the company.
As part of its commitment, Wal-Mart said it would establish mini-Wal-Mart stores in the ravaged region to give out clothing, diapers, baby wipes, food, baby formula, toothbrushes, bedding and water to people in need. The company also said it would provide food, clothing, shelter and money to employees who have been dislocated by the storm.