Strategic Philanthropy.

More and more companies doing business in Latin America are reaching into their pockets to do good deeds. But don't call it charity

WHEN BRISTOL-MYERS SQUIBB HELD A NEWS CONFERENCE last December in Mexico City to announce its more-than $5 million contribution to fund a project to treat children with HIV or the AIDS virus, the person given the honor of making the official announcement was not a corporate executive. The company used Mexico's Health Secretary Juan Ram6n de la Fuente, who boasted about the project and how the company would pay the full cost of training dozens of Mexican pediatricians and other health-care workers at Baylor University's College of Medicine in Houston.

Clearly, Bristol-Myers Squibb was playing the role of the good corporate

citizen. But the good deed was not merely a random act of charity. It also ties into the company's overall business strategy to grow its pharmaceutical and consumer medicine businesses in Mexico and the rest of Latin America. The multinational expects sales in the region to increase 25% to at least $1 billion over the next three years.

For Bristol-Myers Squibb, the multimillion dollar project accomplishes at least two business goals: Sharing the spotlight with Mexico's health secretary helps the company build a good relationship with the Mexican government, and paying for the training of pediatricians gives the company a lasting image with the very people who write prescriptions. "This is really corporate philanthropy at its best:' says Luciano Camara, general manager of Bristol-Myers Squibb Mexico. "It works very well for everybody."

What Bristol-Myers Squibb is doing in Mexico is not an isolated case. It's being repeated all over the region by a growing number of multinationals that describe the concept as "strategic philanthropy." It has especially caught on in Latin America, where the 1990s have ushered in a parade of multinationals who need to build a good brand name in an emerging market.

The Foundation Center, a U.S.-based organization that tracks U.S. corporate philanthropy, found that grants to charities working abroad rose 1% to $679 million between 1990 and 1994, the last year for which figures are available. The number of grants awarded for international projects jumped 30% to 6,649.

Experts say competivive pressures abroad are forcing companies to get involved in communities outside their base headquarters. In the past, many companies simply gave money away, paying little attention to the connection with their business. Those days are long gone. Now, a company bases its decision on the needs of their customers, their employees and corporate goals.

"[These companies] are more like long-term investors and venture capitalists than speculators and gamblers," says Reynold Levy author of Give and Take: A Candid Account of Corporate Philanthropy, a recently published book about corporate philanthropy (Harvard Business School Press). "Companies understand that philanthropy contributes meaningfully to business success."

The trend toward opening the corporate wallet in places like Latin America is also a direct result of the new global economy according to Dan Gertsacov, a coordinator at Business for Social Responsibility (BSR), a San Francisco-based organization made up of 1,400 U.S-based companies. He specifically works with companies doing business in Latin America and the Caribbean.

"As companies become more global, they realize they must become more involved in the places around the world where they do business. And Latin America is no different from any other part of the world for them:' Gertsacov says. "Besides, it's good for a company s image and their bottom line because suppliers will want to do business with them, talented people will want to work with them and customers will want to buy their products."

Indeed, those three factors top the strategic philanthropic agenda of many companies, especially those doing business in Latin America who are hungry to learn more about the concept. For example, a conference on corporate responsibility held in Sao Paulo in June drew more than 350 people representing more than 200 companies. The conference was put together by BSR and the Ethos Institute of Social Responsibility, an organization founded just last year in Sao Paulo. It represents 175 corporate members in Brazil, including Grupo Libra, Banco Itau, Hewlett-Packard, General Electric and Visa.

Similar organizations are up and running in Peru and Mexico. The Mexican Center on Philantropy (Centro Mexicano para la Filantropia) was formed 10 years ago. Talks about putting together more such organizations are happening in Chile, Argentina and El Salvador, BSR's Gertsacov says. European companies are also getting into the act through the Prince of Wales Business Leaders Forum, which last year opened up an office in Guayaquil, Ecuador.

In matching their gift-giving goals with their business strategy several multinationals have become quite creative. At Coca-Cola, where Latin America represents more than 11% of worldwide sales, the company donated $1.5 million to the Carter Center and Emory University in Georgia. But the money will fund scholarships to graduate students from Latin America and fund "high-level" conferences to help bring more investment dollars to the region.

Starbucks, the U.S-based coffee retailer, is also getting involved. It has partnered with Conservation International, a nonprofit environmental organization based in Washington, to assist growers in El Triunfo Biosphere Reserve, a mountainous area in Chiapas, Mexico, that is home to a large number of endangered species. The growers harvest their coffee beans in a "buffer zone" under the shade of the forest canopy a farming technique that protects forests, streams and the wildlife. "We are a coffee retailer and we want to support the very communities and lifestyles of the small growers who produce the coffee we buy:' says Helen Chung, a Starbucks spokesperson. "It just makes sense.

In one of the region's most ambitious projects, the Cisneros Group of Companies and Galaxy Latin America, partners in the satellite television business, have teamed with the Monterrey Technological Institute (Instituto Technologico de Estudios Superiores de Monterrey) to offer 1,800 primary school teachers in 115 schools an eight-month training course to improve basic teaching skills via satellite and the Internet. Educators in Argentina, Colombia, Costa Rica, Ecuador, Mexico, Panama and Venezuela are taking part in the program, known as Actualizacion de Maestros en la Educacion. If successful, it may be expanded to thousands of other teachers.

At the time of the project announcement last December, then-Galaxy Latin America CEO Jose Antonio Rios proudly declared, "We not only want to do business here, but we also want to contribute to the growth and development of Latin America:'

Rios might have added that what's good for growth and development in Latin America is also good for the satellite television business.