The previous sections indicated that transnational corporations can sometimes advance components of social development. It is important to note, however, that there was no evidence in this discussion that TNCs felt obligated to provide such benefits; instead, when transnational corporate activities did further social development, these positive consequences were merely unintentional by-products of TNCs' profit-maximizing activities. That is, the provision of jobs, promotion of health through consumer products, transfer of technology, supply of tax revenues and advancement of economic growth constitute only unintended positive externalities of TNCs' true raison d'etre: the accumulation of money.⁹⁸ This section discusses the primary methods by which transnational corporations may intentionally undertake commitments to advance social development and integration: direct corporate giving programmes and corporate-sponsored foundations.⁹⁹

Although there do not exist data specifically examining TNC charitable activities, the extent of such activities is evident in statistics based on corporate charity in the United States, the country with the strongest tradition of corporate philanthropy. In 1993, over 1,700 corporate foundations and over 600 direct corporate giving programmes operated in the United States.¹⁰⁰ Direct corporate giving totalled 6 billion dollars and corporate foundations disbursed over 1.5 billion.¹⁰¹ Transnational corporations were responsible for a large majority of these funds: IBM, the largest donor, disbursed 141.5 million dollars for grants and gifts in 1992;¹⁰² Exxon's charitable activities totalled 73 million;¹⁰³ the philanthropy of General Electric exceeded 66 million;¹⁰⁴ Phillip Morris distributed 46.3 million dollars in grants;¹⁰⁵ and the AT&T Foundation gave away over 31 million.¹⁰⁶

Corporate charity focuses upon a number of important areas related to social development and integration, including education, health, culture and community development. TNCs have helped to build and operate hospitals; donated medical and pharmaceutical products to health agencies; and trained health professionals.¹⁰⁷ They have also helped to build schools;¹⁰⁸ donated funds to minority education programmes;¹⁰⁹ and contributed to educational institutions.¹¹⁰ Additionally, TNCs have fostered economic and community development by supporting housing assistance programmes, recreational facilities, cultural events and infrastructure systems.¹¹¹

Although transnational corporations conduct some of their charitable activities internationally, TNCs' host countries are the primary beneficiaries of corporate philanthropy programmes. In 1992, for example, international grants and gifts comprised only 22 per cent of IBM's charitable programmes,¹¹² 19 per cent of Exxon's,¹¹³ 13 per cent of Mobil's,¹¹⁴ 1  per cent of AT&T's,¹¹⁵ and 4 per cent of General Electric's philanthropic activities.¹¹⁶ Furthermore, most of this international corporate charity is directed towards industrialized countries;¹¹⁷ developing countries receive very little.¹¹⁸

While the philanthropic activities of transnational corporations can certainly advance social development and integration, there exist a few cautionary caveats. First, the money TNCs dedicate to charity has been declining; US-based corporate giving, for example, has decreased every year since 1987. While, in 1987, American companies gave 7.01 billion dollars in 1992 inflation-adjusted dollars, they gave only 6 billion in 1992.¹¹⁹ Second, although the aggregate totals of TNC giving might seem impressive, these figures can be misleading. For example, they constitute only a minimal proportion of TNC earnings; in 1992, American corporate giving constituted only 1.61 per cent of pre-tax income.¹²⁰ Furthermore, because corporate charity is tax-deductible in many countries, the cost of philanthropy to TNCs is reduced. For example, companies may endure only 5 million dollars in costs to donate 10 million to charity. Additionally, because corporate-sponsored foundations do not access current corporate funds, grant making by these foundations does not detract from current TNC profits. A third caveat is that corporate philanthropy is often self-serving. For example, pharmaceutical companies might train health professionals in developing countries so that these individuals will market and distribute their goods; petroleum companies might assist with infrastructure systems so that they can more easily transport their products; and chemical companies might finance low-cost housing so that their employees can live closer to company plants, thus spending more time working and less time commuting.

98 8. As the case study of the automotive industry in Brazil depicted, for example, transnational corporations acted as unintended levers of social and political change in this country. See the subsection on "Employment" in part 1 of this paper.

99 9. There exists an important distinction between direct corporate giving programmes and corporate-sponsored foundations. While the former are based solely on annual corporate funds, the latter usually derive from a seed grant, a portion of which the foundation disburses each year. Some companies engage in only direct giving and others possess only corporate foundations; still others conduct charitable activities through both avenues.

100 00. Foundation Center, 1993, p. vii.

101 01. AAFRC Trust for Philanthropy, 1993, p. 106; Foundation Center, 1994b, p. 38.

102 02. Foundation Center, 1993, pp. 349-350.

103 03. This includes 55 million dollars in direct giving and 18 million dollars through its foundation (TAFT Group, 1994, p. 464; Foundation Center, 1994a, p. 639).

104 04. This includes 46 million dollars in direct giving and over 20 million dollars through its foundation (TAFT Group, 1994, p. 474; Foundation Center, 1994a, p. 639.

105 05. Foundation Center, 1993, pp. 555-556.

106 06. Foundation Center, 1994a, p. 639.

107 07. McGuire, 1983, pp. 21-27.

108 08. In Zimbabwe, for example, Union Carbide helped to build a technical college and nine other schools offering free education to students (ibid., pp. 29-32).

109 09. For example, AT&T donated 3.7 million dollars to the United Negro College Fund, a American organization dedicated to the advancement of African-American education (AAFRC Trust for Philanthropy, 1993, p. 111).

110 10. Japanese companies alone donated approximately 100 million dollars to American educational institutions (AAFRC Trust for Philanthropy, 1993, p. 110). ARCO Chemical Company donated 2,500 dollars to the Jakarta International School (TAFT Group, 1994, p. 659).

111 11. McGuire, op. cit., pp. 35-39. For example, IBM donated 190,000 dollars to the Small Home Building Loan Fund in Johannesburg, South Africa (Foundation Center, 1993, pp. 349-350).

112 12. Percentage calculated from figures in Foundation Center (1993, pp. 349-350) and TAFT Group (1994, p. 491).

113 13. Percentage calculated from figures in Foundation Center (1994a, p. 639) and TAFT Group (1994, p. 464).

114 14. Percentage calculated from figures in TAFT Group (1994, p. 515).

115 15. Percentage calculated from figures in Foundation Center (1994a, p. 639) and TAFT Group (1994, p. 404).

116 16. Percentage calculated from figures in Foundation Center (1994a, p. 639) and AAFRC Trust for Philanthropy (1993, p. 110).

117 17. AAFRC Trust for Philanthropy (1993, pp. 109-110); TAFT Group (1994, pp. 401, 491).

118 18. As notes 107-111 indicate, however, transnational corporations do sometimes conduct philanthropic activities in developing countries.

119 19. AAFRC Trust for Philanthropy, 1993, p. 106.

120 20. Ibid.