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St. Paul, Minn. — Target Corporation gets a lot of public relations mileage from its indisputably generous corporate giving program. The company says it gives five percent of its pre-tax profits to charitable causes, which amounts to more than $2 million a week. (MPR receives some funding from Target Corporation.)
Marshall Field's supports arts, education, and social service organizations. Target doesn't specify how much is currently given in Marshall Field's name. The Minnesota Council on Foundations says Marshall Field's donated about $6 million in 2001.
But May Department Stores Company donations ranged from 1.2 percent to 2 percent of the prior year's pre-tax profits over the last three years, according to company reports. That's a lower rate than Target's.
So, will May cut back Marshall Field's giving?
Tony Woodcock, president of the Minnesota Orchestra, which receives support from Target Corporation in the name of Marshall Field's says he's optimistic giving won't shrink.
"The fact that they're keeping the name, the fact that they're keeping the terrific staff they have in place at the moment, I think bodes very very well for the community and what they want to do here," says Woodcock.
May issued a statement saying the company "has a long-standing commitment to support the communities where we operate. May's policy for Marshall Field's charitable giving will be consistent with our other divisions. However, we are just beginning the transition with Marshall Field's, including the area of charitable giving."
May doesn't disclose how it determines annual giving amounts. But a company official noted Marshall Field's current level of giving is unknown, and questioned the validity of assuming that May's lower overall contribution rate could mean shrinking donations from Marshall Field's.
And Jack Kerber, a fundraising consultant in St. Louis, doubts May would back off on Marshall Field's level of giving, or change its focus, at least for the first few years.
"It's pretty typical for a community to become worried, about, 'Gee, these guys have always helped us to do this,' whatever the 'this' is. And that the new guys coming into town, you don't want to be seen as an occupier. You want to be seen as a citizen," says Kerber.
Research indicates consumers care about corporate giving. "There definitely are plenty of survey and marketing studies that show that consumers, given a choice, often will prefer to do business with companies that have active community contributions or philanthropy. So it can be a comparative advantage," says Jon Pratt, who heads the Minnesota Council of Nonprofits.
May company's philanthropy is substantial. Its $16 million in total contributions in 2002 would have ranked it seventh among Minnesota corporations, according to numbers compiled by the Minnesota Council on Foundations. And May's giving has held up over the past three years, even as profits fell.
The company's home state is clearly a major focus. Last year, at least 31 percent, the largest portion of May's charitable contributions, went to Missouri organizations. States that are home to divisional headquarters also were among the top destinations.
For its part, Target will lose the Marshall Field's profit stream, but those profits have shrunk dramatically -- almost two thirds since 1999. It represents just 3 percent of the pre-tax profits Target's three chains generated last year. As a result, Joan Grathwol-Olson, development director of the Minneapolis Institute of Arts doubts the change of ownership will affect Target's giving much. And she says Target's headquarters remains in the Twin Cities.
"That's a really important asset for this community. And a lot of their executives serve on boards, are involved in the community, are giving back in ways more than just monetary, but have a stake in this community. So I think those three things are equally important as the profit picture when thinking about what's the future impact," according to Grathwol-Olson.
And the sale of Marshall Field's is ultimately an effort to improve Target's profits. Target Corporation officials say the company will continue giving 5 percent of its pre-tax profits, and retain control of Marshall Field's giving until the sale is final.