Opening Up to Charity

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Bertelsmann's insistence on running its projects sometimes attracts controversy too. Some educators question how independent Bertelsmann the foundation is of Bertelsmann the media company — and are worried that commercialism might arise in schools as a result. One school initially refused to participate in the program unless Bertelsmann sold its TV operations.

In Italy publicly held UniCredit is modeling its year-old foundation, Unidea, on those of U.S. philanthropists such as the Fords and Charles Stewart Mott, a General Motors pioneer. UniCredit CEO Alessandro Profumo says that the work these foundations have been doing to foster civil society in Eastern Europe is "a source of inspiration." Unlike more parochial Italian donors, Unidea is spending 60% of its grants on projects in Africa, including ones to combat AIDS in Mozambique and improve public health in Burkina Faso. Also, the bank set up one of the first gift-matching programs in Italy, meeting employee donations euro for euro. "We wanted to raise the awareness of employees that they are part of a company that believes in a value system that is far bigger than a simple creation of value for shareholders," Profumo says.

UniCredit's approach is a stark contrast to the more traditional, political kind of philanthropy that some Italian savings banks have practiced. Owned by communities, they were expected to serve as patrons for local causes. In the mid-1990s new laws required them to split off their philanthropic divisions, creating 89 foundations, with endowments totaling $45 billion. They included the $6 billion Monte dei Paschi di Siena Foundation, which has financed art exhibits, restored churches and renovated a Siena hospital, buying a new MRI machine. Just $5 million of the $175 million Monte dei Paschi disbursed last year went outside Italy. "We pay a lot of attention to the territory where we operate," says Giuseppe Mussari, the foundation's president.

For all the creeping altruism, the notion of giving back is still not as ingrained as it is in the U.S., largely because Europeans are used to paying so much in taxes. John Logan, who runs a foundation that Britain's Vodafone set up in 2002 and is urging its subsidiaries to do the same, has a hard time explaining the need for corporate philanthropy in some parts of Europe. For example, in Sweden, where taxes are among the highest in Europe, Logan says, "persuading our friends that they should be encouraged to give is quite a difficult job."

In France raising money also continues to be a struggle. Marie-France Blanco, a former teacher and social worker, has battled since the mid-1980s to find funding for a program for children of prison inmates. Blanco, who was appalled to discover that the children of French prison inmates are often forgotten by the authorities who lock up their parents, could get the help of only her husband, an executive at the French subsidiary of farm-equipment manufacturer Massey-Ferguson, before she decided to create an association. "When I said prison, everyone turned their head," she recalls.

Then a contact referred Blanco to the Van Leer foundation, which agreed to fund her group. She has since expanded to a national federation with 17 regional associations. Thanks to her, several French prisons have facilities for visiting children. After three years of arm twisting, the Fleury-Merogis prison outside Paris last month let her stage the first Father's Day party for kids and their jailed dads. Blanco still has to struggle to raise money. She recently wrote to all 63 companies in her local chamber of commerce. Not one gave a euro.