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Ford: Scrooge or Santa?

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By Jeremy MacNealy
January 4, 2007

Only three days left in this season's Foolanthropy campaign! Visit www.foolanthropy.com to learn about five reader-nominated charities and make a donation.

In our "Scrooge or Santa" series, we've taken a look at Wal-Mart's (NYSE: WMT) charitable efforts, particularly its involvement with disaster relief. Then we checked out Johnson & Johnson (NYSE: JNJ) and looked at the ways it manifests corporate social responsibility. Clearly, in Johnson & Johnson's case, it is the fight against HIV/AIDS in Africa.

Nancy Lewin, a Johnson & Johnson employee and director for the company's Worldwide Wound Care as well as its Caregiver Initiative, took the time to respond to the article. With her permission, I have included a sampling of her letter. Nancy writes:

"I have worked here [J&J] for 15 years, and it was so nice to read your comments on Our Credo and the passion our employees have for helping others. As in your Wal-Mart example, there are so many grassroots programs at each of the J&J operating companies in addition to the Corporate Contributions programs of which you speak. Johnson & Johnson is truly a great company, and it was just so nice of you to take the time to write about us!"          

As investors, we need to gather as much information as we can on the companies we are putting our money and trust in. I believe that one important part of that research process is to identify ways in which the respective company is using its power and place in society in a positive manner.

Today, we will look at an enterprise whose history of philanthropy almost makes the company's namesake synonymous with giving -- Ford Motor (NYSE: F).

A rich history of philanthropy
In a league with Wal-Mart, Johnson & Johnson, General Electric (NYSE: GE), and ExxonMobil (NYSE: XOM), the recent giving from Ford's corporate foundation makes it one of the leading charitable contributors. It can be argued that no other company on the list from the Foundation Center, an organization that tracks corporate giving, has as rich a history of philanthropy as Ford does.

Its history of corporate citizenship can be traced all the way back to founder Henry Ford. One of his best-known acts of social engagement was his Ford Peace Ship, which set sail across the Atlantic in 1915. Many criticized his pacifist stance, all the while failing to recognize the enormous profits the company could, and eventually did, garner from manufacturing war supplies.

Henry Ford used his personal wealth for philanthropic purposes, and his company's legacy of giving continued when his enormous sums of wealth were used to start the Ford Foundation in 1936. This foundation's charitable acts over the years are too vast to list here, but from the formation of the Public Broadcasting Service, to the Green Revolution and the fight against world hunger, all the way to providing the initial support for the widely documented Grameen Bank, the Ford Foundation has made enormous contributions to society.

Ford Motor went public in 1956, when the Ford Foundation began to divest itself from the company. Yet while the company and the foundation remain wholly independent of each other, that doesn't mean the parent company has taken a break from its responsibility to contribute to social well-being.

Today, Ford contributes to society in three major ways: through its Ford Motor Company Fund, through the company's operations, and from employee volunteerism.

Ford Motor Company Fund
The fund gave more than $79 million in 2005 toward projects ranging from education to hunger relief.

One particular initiative that I wish to highlight here is its Ford Partnership for Advanced Studies (Ford PAS). This effort creates a partnership among public schools, higher-education institutions, community organizations, government entities, and businesses to provide a non-traditional, coordinated, real-world education program for students from "underserved populations."

Now, instead of trying to comprehend engineering and physics concepts from a dry, dusty old textbook, students can learn from concrete examples. The response to the program has been overwhelmingly positive; there is now a move to implement the concept nationwide.

Ford does more than put muscle in a Mustang
In an article on former Canon (NYSE: CAJ) CEO Ryuzaburo Kuku and his thoughts on corporate social responsibility, we saw how research and development can be a powerful tool for companies to not only produce sustainable profits but also make sustainable contributions to society.

Ford's European research center is on the forefront of transportation technology ranging from "green" technology like hybrid engines to vehicle-safety technology to vehicle recycling. Its Asia-Pacific operations, such as the Jiangling plant in China, are also contributing, particularly in areas of "green" manufacturing -- an effort to reduce emissions from facilities to "nearly zero."

Ford's operations in South Africa aren't being left behind on social-responsibility initiatives. With nearly one-fifth of South Africa infected by HIV/AIDS, Ford Motor Company of South Africa has made awareness of the epidemic a critical part of doing business. In a non-discriminatory manner, it regularly communicates to its employees about the risks of HIV infection. The company also provides confidential voluntary counseling as well as testing to its employees in South Africa.

An AIDS awareness program in South Africa, a solar-powered plant in Wales, and a "green" Ford dealership in Sweden all point to a company dedicated to making positive contributions to major social and environmental issues.

A motor company powered by volunteers
The driving force behind Ford's charitable efforts is its people. How engaged in the community are its employees? Consider that for Michigan's Habitat for Humanity, more than half of its volunteers are Ford employees. This is a remarkable testimony to the kind of people Ford employs.

No question, since the late 1990s, Ford has struggled as a company. Certainly it will need to retool its operations to make it a compelling investment again. But where the company has long been in the fast lane as a leader is in being a corporate citizen. Now if it can just gets its operations back in the fast lane.

For more socially responsible Foolishness:

The Motley Fool has its own philanthropic endeavor, Foolanthropy. More information can be found at our Foolanthropy site.

Johnson & Johnson is a Motley Fool Income Investor pick. Wal-Mart is a Motley Fool Inside Value selection. Check out any of our newsletter services free for 30 days.

Fool contributor Jeremy MacNealy is writing a law and ethics thesis paper on corporate social responsibility as part of a graduate program at Duke University. He has no financial interest in any company mentioned. The Motley Fool has a disclosure policy.