By Corporation reporting staff
Published: 2008-05-30

By reporting staff
From Corporation, page 25, issue no. 369, May 25, 2008
Original article:

Is a corporate donation an impulsive act of selflessness, or the result of careful consideration? Is it a burden, or a measure by which to improve competitiveness?

In the aftermath of the devastating May 12 Sichuan earthquake, companies all over China have claimed they have assumed extra social responsibilities--but not all of their donations have received the same treatment.

Some companies donated significant amounts only to be criticized or else ignored. Indeed, it seems there's another hidden set of principles by which to judge the form and amount of a donation.

The Value of a Donation
Holding a 30 million yuan donation card in his hand, Zhang Xiangqing announced that his company would add another 70 million to help reconstruction work in quake-stricken areas.

Zhang and his company won great praise at the CCTV disaster relief show for the gesture. Now serving as the board chairman of Tianjin Rockcheck Steel Group, Zhang lost his parents in the last massive earthquake in Tangshan, Hebei 32 years ago.

"Years later, people would still remember that a quake victim once donated 100 million yuan when another quake occurred," said Zhong Hongwu from the research center of corporate social responsibility under the Chinese Academy of Social Sciences.

The disaster relief show that was broadcast live on May 18 set a record with 550 million viewers, and 49 countries and regions reran it or rebroadcasted it live, CCTV claimed.

But there are other benefits as well. China Oceanwide had donated a total of 26.83 million yuan, with further donations being discussed. As a result, the company not only enjoyed positive publicity, but also raised staff morale.

Zuo Haimo, an intern at China Oceanwide as an intern, said she had made up her mind to become an employee of the company because "it has such a strong sense of social responsibility".

Though charity can't be measured simply in stark sums, the totals donated do have implications. Vanke, the leading real estate developer in China, suffered a backlash for a two million yuan donation which was considered too small in relation to its size. Before the earthquake the company had made considerable contributions to charities and was once regarded as a model of fulfilling its social responsibility.

In response, Vanke's chairperson Wangshi then wrote an article in his blog, arguing that two million yuan was a suitable amount, which sparked off even more anger among netizens. "This really upset us," said one employee who has worked in the company for several years, adding that some colleagues even thought of quitting.

On May 21, Vanke published a notice claiming it would participate in rebuilding work in Zundao, Sichuan and the budget for this would be 100 million. Though the announcement allayed criticism to some extent, suspicion arose later that the company was seeking business opportunities in reconstruction after quake.

Behind the Decisions
Many on the verge of bankruptcy have been enthusiastically involved in donation.

Jiugui Liquor, which has just eliminated the risk of going private, made a 200 thousand yuan donation of materials and cash. According to its deputy corporate planning manager Fu, the company is still financially pressed, but they "didn't even give it a thought when it came to a donation."

Aucma, a Qingdao-based electrical appliance producer which is currently struggling its way out of a financial crisis, pledged a millon yuan in cash and 600 thousand yuan in materials. In 2007, this company encountered a loss of 559 million yuan.

However, for most local private companies, every important decision is marked by the personality of its chief.

Wang Laoji Herbal Tea, a subordinate company under Duojiabao Group, donated 100 million yuan during the CCTV disaster relief show. The Group's chairman of the board, Chen Hongdao, is known as a follower of Buddhism and a man of charity.

However, for some well-publicized companies in China, it was difficult to make the decision of such a huge donation.

Shanghai Jahwa, a daily cosmetic company, left the problem to its staff, who were asked to give opinions on how much it should donate in a poll. After study of these opinions, the final amount was set at three million yuan. As it's a listed company and stakeholders' interest is involved in a donation, the company also issued a notice informing the investors of its decision and that they could contact it if they disagreed.

Zhang Jindong, chairperson of leading electrical appliance producer Suning, is perhaps both a model and an exception; he donated 50 million yuan to quake-stricken areas while his company contributed five. It was the biggest personal donation in Chinese history thus far.