By Jonathan O'Connell and Marjorie Censer
Monday, August 9, 2010; 12
The Washington area has been exceedingly fortunate -- or skilled, depending on one's perspective -- at attracting the headquarters of top American corporations in recent years. Fairfax County landed two major headquarters in 2008 (Volkswagen of America and CSC), another two in 2009 (Science Applications International Corp. and Hilton Worldwide) and learned this year that Northrop Grumman would arrive by 2011.
Governors, county executives and mayors jockeying to land company headquarters frequently cite jobs as the top reason to offer subsidies and incentives, but those sometimes amount to far less than anticipated. But there's another reason corporate relocations are considered important: the expectation that the companies will bring with them heaps of charitable dollars.
And not just dollars. Terri Lee Freeman, president of the Community Foundation for the National Capital Region, said approaches to giving can vary. For example, she said consulting firm Deloitte offers thousands of hours of pro bono expertise, providing analysis and business management expertise to local nonprofits, while Capital One, the financial giant based in McLean, has long operated a locally focused grant program through its foundation.
"We want all the companies that are here to look at this region as their home and make as much [of] an impact through their community efforts as they do from the fact that they are employing people from the region," Freeman said.
When hundreds of executives move into a region, there will always be an impact, said Steve Gunderson, president and chief executive of the Council on Foundations, an Arlington-based national association for foundations and corporate giving programs.
"It's very clear that when you bring a corporate headquarters to your community, what you do is you bring the upper-level compensated people within that company into your community, and simply by virtue of doing that you are going to have individuals engage civically and philanthropically in ways that would not happen otherwise," he said.
Here's what Washington can expect from its five newest corporate citizens, based on e-mailed responses from the companies and interviews with past and current charitable partners.
Hilton's community impact begins with its president and chief executive, Christopher J. Nassetta, an Arlington native. Though Hilton moved from Beverly Hills only last year, Nassetta, a former chief development officer for the Oliver Carr Co., already has deep ties to the area. He is a member of the Federal City Council, has served in multiple positions for the Arlington Free Clinic, is on the board of directors for the Wolf Trap Foundation for the Performing Arts and serves on the corporate fund board for the John F. Kennedy Center for the Performing Arts.
What won't be coming to Washington with Hilton's headquarters is the foundation established by the company's founder. The Conrad N. Hilton Foundation, which made a whopping $80.1 million in grants last year, is no longer connected to the company and will stay put in Los Angeles.
Not only that, but business in the hotel industry has been no trip to the beach in recent years, which has affected the giving of chains like Hilton. Still, it has already begun making contributions to some D.C. charter schools.
The McLean-based government services company has had a local presence for years, but after moving its headquarters here from San Diego, it now has 17,000 area employees and 70 Washington area locations.
SAIC provides donations directly through its company. It did not disclose giving figures, but it prioritizes support for science, technology, engineering and mathematics education for students in elementary, middle and high school; helping members of the military and their families; and cancer research. Locally, the firm sponsors the annual carnival Celebrate Fairfax and works with the Thomas Jefferson High School for Science and Technology Partnership Fund to promote science and math education.
Walter P. Havenstein, SAIC chief executive, lives in Bethesda and serves on the board of both the U.S. Naval Academy Foundation and the nonprofit For Inspiration and Recognition of Science and Technology, which seeks to interest kids in science and technology.
Havenstein asks company leaders to make a "3-2-1" commitment to community or charitable causes -- meaning participating in three relevant events per year, making two speeches and belonging to one organization.
Volkswagen Group of America
The German carmaker got off to a bang after moving from Detroit. At the 2008 opening of its new U.S. headquarters in Herndon in 2008, it announced a $2.6 million partnership with Northern Virginia schools, among them Fairfax County Public Schools, Northern Virginia Community College, the Excel Institute, George Mason University and Virginia Polytechnic Institute. This year, the company also gave the Herndon Police Department a pair of Passats tailored for emergency response.
Company giving is highly geared toward engineering and technical training that supports the auto trade, but Volkswagen also encourages its executives and employees to support other causes, matching employee donations up to $5,000 per employee annually to six organizations, including two well-known local groups: the Chesapeake Bay Foundation and the Boys & Girls Clubs of Greater Washington.
In Europe, Wilhelm Krull, Volkswagen secretary general, is a major philanthropic figure and serves as head of the Volkswagen Foundation and a board member of the European Foundation Centre.
CSC is pondering a decision many corporations confront: whether to provide charitable dollars directly through the company or to launch a separate charitable foundation. "Do we create a CSC foundation or do we have some kind of central pot of money for giving at the corporate level?" said Susan Pullin, CSC vice president for corporate responsibility and analyst relations.
The Falls Church-based company, which also came from Southern California, is both a contractor and a commercial business, with more than 13,400 employees at 80 offices in the Washington-Baltimore area. CSC said its giving priorities are education, child welfare, the environment and promoting diversity in staffing.
Already, Michael W. Laphen, CSC's chairman, president and chief executive, serves on the board of McLean-based CharityWorks, a bridge between donors and charities. The company has also partnered with neighboring Falls Church High School to provide judges for its science fairs and art shows, tutor students and provide discussion leaders for brown-bag lunches.
Regardless of the structure of donating in the future, Pullin said giving is "about growing relationships, business relationships, because business is built on trust."
"I wish I could say we did it because we want to do it because we are so charitable and magnanimous, but you do it because it's good business and because it encompasses all areas of your business," she said.
Northrop just announced in July that it is moving its headquarters to Fairfax County from the Los Angeles area by 2011. In the 2009 calendar year, the company made $18.2 million in contributions, employees gave $6.8 million and the company's foundation provided another $4 million.
Tamara Copeland, president of Washington Grantmakers, a local association of charitable givers, said she expects Northrop's local grantmaking to grow. "What I'm hearing from them is education, veterans of the military and the environment," she said, adding that she expects the company to get involved in the D.C. public school system.
Northrop said it will be some time before it announces its philanthropic plans for the region.
"We are working on a positive exit from Southern California where we have had many longtime, highly valued associations," said Northrop spokesman Gustav Gulmert. "2011 will be something of a transition year, and the full impact of Northrop Grumman's move to the D.C. region, in terms of corporate philanthropy, will not be felt until 2012."