In 1984, American Express revolutionized corporate philanthropy when it introduced a highly successful campaign to restore the Statue of Liberty. The company offered to donate 1 cent from every charge made on its cards over a three-month period to help rebuild and restore the statue. The campaign raised $1.7 million and encouraged customers to pull out their cards to make purchases. During the campaign, card use rose 28 percent compared with the same period a year before.
Aligning business campaigns with nonprofit ventures has become known as cause-related marketing. The idea is to enlist consumers in a philanthropic effort by using a company's services. Such efforts can help worthy causes, bolster business and spruce up a company's image.
Cause-related marketing is also a staple of "strategic philanthropy," in which executives of corporate foundations work closely with their colleagues on the business side of the company.
"Corporations have recognized that their philanthropy should be as strategic as all of their business operating programs," said Carole Cone, a strategic philanthropy consultant in Boston.
Because large corporations like American Express have aligned themselves with philanthropies, there were expectations after the Sept. 11 terrorist attacks that the business world would help with the relief efforts. Initially, their response involved donations of cash and services. Then, American Express and other companies found ways of responding through strategic philanthropy.
For American Express, the challenge was complicated by the company's own circumstances. The foundation's headquarters were on the 48th floor of the World Financial Center, a block west of the World Trade Center. When the staff evacuated its offices on Sept. 11, several checks for nonprofit groups were left behind.
"We had just cut checks to several of our grantees, and we had no way to retrieve them," said Mary Beth Salerno, the president of the American Express Foundation. "So, we made lists from memory and began contacting our grantees to assure them they would receive their grants as soon as possible."
Every year, the American Express Foundation makes about $30 million in grants to a range of nonprofit groups, many of which indirectly help promote the company's services. About a third of the foundation's grants support cultural heritage projects around the world; many of these promote travel and tourism.
For example, the company has given $10 million over the last decade to the World Monuments Fund, which tries to protect endangered works of art and architecture. The foundation also supports financial literacy programs.
In the aftermath of the attacks, Ms. Salerno and her staff helped to shape the company's philanthropic response. Like other large companies, American Express's immediate reaction was to donate cash. On the morning of Sept. 13, the company's executives committed initial grants of $250,000 each to the Red Cross and to the newly formed September 11 Fund.
The company announced that it would give $1 million to the families of its 11 employees who were lost at the World Trade Center. And the American Express Foundation set aside $1 million to create and administer a disaster relief fund.
Then came Part 2. "The cash and supplies were the first wave, and now there is a second wave, dealing with other issues not as immediate or obvious," said Bradley Googgins, the executive director of the Center for Corporate Citizenship at Boston College.
One of the company's first decisions was to use philanthropy to cement bonds with employees. American Express wanted to acknowledge that employees were deeply affected by the events of Sept. 11.
A week after the attacks, the company held a rally at Madison Square Garden for 5,000 employees. At the rally, the company announced that its relief fund would be part of the employees' giving campaign. The company promised to match donations made to the fund by retirees, financial advisers and employees.
"We don't usually collect money at the foundation, but we opened it up to allow employees to contribute," Ms. Salerno said. So far, employees have pledged $1 million.
Then, foundation and business executives worked together to redirect cause-related marketing programs. Those campaigns are run by the business side of the company, but its executives frequently turn to Ms. Salerno for advice.
"Our role in many of these is to be advisory, to help with contacts," she said.
American Express helped to reschedule Restaurant Week, which encourages cardholders to patronize New York City restaurants that offer $20.01 lunch specials. After the attack, the event was moved to Oct. 15 instead of January and was extended to two weeks from one.
The company also used advertising to remind diners that Lower Manhattan restaurants had reopened.
"We ran newspaper ads noting that the lights are on, and now the customers need to come," said Steve Squeri, the president of the company's establishment services division for the United States and Canada, which handles relationships with businesses that accept the card.
Another company campaign, Membership Rewards, was also tweaked. That program allows cardholders to accumulate points and redeem them for travel certificates, merchandise and donations to groups like United Cerebral Palsy and the Special Olympics. American Express added Sept. 11 relief groups to its list of eligible charities and offered to match 2001 donations to all charities, up to $200,000 over all.
A result: "We have had a 250 percent increase in redemptions for charities since Sept. 11," said Susan Sobbott, the company's senior vice president for loyalty rewards and alliance development.
The question now is how long the outpouring of generosity can last. In the months before the attacks, American Express laid off 6,100 employees as its stock price plunged. The company is now facing an even tougher business climate. Late last month, it reported that quarterly earnings fell 60 percent, while travel sales fell 28 percent from the year before.
In an economic downturn, will corporations like American Express continue to finance both relief efforts and other commitments to nonprofit groups?
"If these large donations come out of existing budgets, then something has to give," said Curt Weeden, the chief executive of the Contributions Academy in Charleston, S.C., and a former vice president of corporate contributions at Johnson & Johnson. "If something else happens, are those deep pockets still going to be there?"
Ms. Salerno said that American Express was making contributions to the relief fund partly from discretionary money.
"I think it is important to not just take a 180-degree turn from other things that we're doing," she said. "A lot of nonprofits, in New York and elsewhere, were having a difficult time before Sept. 11."
Copyright 2001, The New York Times