How GE gives away money

The easy way to do corporate philanthropy is to write a little check to everyone who asks. Many companies operate this way–$5,000 to the Boy’s Club, $5,000 to the YMCA, $5,000 to the local cancer society or heart association. This is mostly a feel-good exercise, performed, it must be said, with other people’s money.

Today’s Sustainability column at fortune.com and cnnmoney.com is about GE, and the company efforts to be strategic in its corporate giving. I met Bob Corcoran, who runs the GE Foundation, on a trip to Ghana in 2004, and had a chance to see GE’s health care initiative in action there—the company donated medical equipment, a generator, money and lots of expertise to a hospital in rural Ghana. Last week, Bob and I had a chance to catch up when he was in Washington.

Here’s how the column begins:

I’m not a big fan of corporate philanthropy. Too often, it’s a feel-good exercise, generating little value for a company’s shareholders. At its worst, it allows CEOs to use other people’s money to glorify themselves. (Tyco once pledged $5 million to Seton Hall University, which named a building or two after its then-CEO, Dennis Kozlowski.) Rarely is corporate giving both benevolent and strategic.

General Electric (GE, Fortune 500) is one company that does philanthropy right. On Monday, the company announced a new donation – a five-year $18 million grant from the GE Foundation to the New York City public schools, the largest-ever single corporate contribution to the school system. New York is the sixth city to join in what GE calls its “Developing Futures” program, which is aimed at improving schools in Atlanta, Cincinnati, Louisville, Stamford, CT and Erie, PA, all places where GE operates. GE has been working on school reform for decades.

The company’s other charitable focus – health care in poor countries – is newer. I had a chance to see it up close in 2004 when I traveled to Ghana, with Bob Corcoran, GE’s vice president for corporate citizenship and president of the GE Foundation. (See Money and Morals at GE in the Fortune archive.) Back then, GE had promised to donate $20 million of equipment and to lend its expertise to public hospitals and clinics in Africa, beginning in Ghana – a country where it does no business. Corcoran and GE’s CEO, Jeff Immelt, justified the Africa initiative in several ways: They told me the company had been asked to do more in Africa by its African-American employees, that GE wanted to develop good will in a region that soon could grow into a real market, and that knowledge gained from working in poor countries might pay off in unexpected ways for GE.

You can read the rest here.