A Philanthropy Rush in Corporate Brazil
<a href=www.nytimes.com>NY Times March 30, 2003 By TONY SMITH
SÃO PAULO, Brazil -- If Brazilians needed any proof that having a social conscience is in fashion here, they got it recently, when, during São Paulo Fashion Week, the supermodel Gisele Bündchen gave half her $30,000 runway fee to Zero Hunger, a program to eradicate poverty in this country.
Not coincidentally, Zero Hunger is the mainstay project of Brazil's left-leaning new president, Luiz Inácio Lula da Silva. For that reason, many executives are eager to emulate Ms. Bündchen, the icon of Brazil's fashion industry, and to do — or at least be seen to be doing — their part. The leaders of a growing number of companies, including multinational giants like I.B.M., Ford Motor, Bayer and Unilever, are clamoring to support Zero Hunger, which says it needs $1.5 billion in financing over the next four years.
Their motives, government officials say, range from naked opportunism to a conviction that Brazil desperately needs to distribute its wealth more equitably. Whatever the reason, officials said, the aid is welcome.
Despite Brazil's success in curbing hyperinflation the last decade, the number of poor Brazilians has stayed stubbornly at around 60 million — more than a third of the population. Lackluster economic growth and rising unemployment in recent years means that 46 million Brazilians — about one in four — still live on less than $1 a day, according to Instituto Ethos, an association of companies that champion corporate responsibility.
According to statistics from the United Nations, Brazil has the third most unequal distribution of wealth in the world, trailing only Swaziland and Nicaragua. The wealthiest 10 percent of the people here take in more than half of the national income, while the poorest tenth receive less than 1 percent.
"Business always tries to please the government currently in office," said Oded Grajew, special aide to Mr. da Silva for mobilizing corporate support for social projects. "If you want to impress this government, then your visiting card has to be the social question."
It appears to be working. Perusing a letter from Bayer in his office as he waited for the chief executive of IBM Brazil to arrive for a meeting, Mr. Grajew said he was "drowning in offers of help."
Nestlé has pledged 1,000 tons of food aid; Ford is donating 440 pounds of food for every truck it sells for a month, while the leading supermarket chain Pão de Açúcar has agreed to help with distribution.
The Institute of Applied Economics Research, a government agency, found that 462,000 companies spent a total of $2.5 billion in 2000 on social projects, from improving adult literacy to financing local dance troupes. While that is only a quarter of what corporate America spent in absolute terms on similar projects, it is four times as much as companies in the United States spend when calculated as a percentage of the economy's size.
Eduardo Monteiro, institutional marketing director at Pão de Açúcar, says his company now spends more than $6.5 million a year on social projects, up from $4 million two years ago. It is increasing its food donations to 250 tons a month from 140 tons and is hiring 500 young people to assist in the Zero Hunger project.
OR that, Mr. da Silva can be thankful.
With the jobless rate soaring to nearly 20 percent in some parts of the country and violent crime spiraling, underfinanced public schools, the health service and other social support agencies appear increasingly unable to cope.
Ricardo Young, president of Instituto Ethos, said companies "got a wake-up call" when they realized that Brazil's social fabric was so frayed.
"In a country with a social apartheid like Brazil has today, all our businesses are at risk," Mr. Young said.
Instituto Ethos, founded by 16 chief executives in 1998, now has more than 700 corporate members, which employ more than a million people and have sales of about a third of Brazil's annual economic output.
In some projects run by these companies, street youths learn to read, shantytown dwellers get their first jobs and drab streets are brightened with graffiti art.
The number of companies encouraging their employees to join volunteer work programs is also rising. Ford workers paint hospital wards on their own time (the company lends them a truck to carry the equipment), while BankBoston employees help regularly in soup kitchens and tell stories at child care centers.
Recently, 200 employees from Unilever, which sponsors centers for handicapped children and runs volleyball clubs in São Paulo shantytowns, distributed condoms on a beach near the northeastern city of Recife for a local program to fight AIDS.
Milu Vilela, a businesswoman who is president of Faça Parte, Brazil's main volunteer institute, estimates that the number of Brazilians doing some sort of voluntary work more than doubled, to about 44 million last year, from 20 million in 2000.
"Before, people used to think they could buy their place in heaven by writing a check," Ms. Vilela said. "Today they know it's not just a question of dipping into their pockets, but rolling up their sleeves and getting their hands dirty."
Ms. Bündchen's agent and manager, Monica Monteira, said her client donated her fee "because she wanted to serve as an example to all Brazilians who could help so that they would help," but it also helped to burnish her image after months of bad publicity for wearing fur on the runway.
In the same way, charitable companies could have a lot to gain by being seen to do good.
Ford became the first automaker in Brazil to set up a department for social responsibility, in 2000, after a struggle with unions tarnished its image.
Ford now spends half a million dollars a year on social projects in Brazil, joining a trade union in an adult literacy program and supplying cars and spare parts to a mechanics' school for underprivileged adolescents. It also encourages workers' committees to come up with ideas and expects to donate and deliver 200 tons of food to Zero Hunger in February.
"It's not opportunism," said Flavio Padovan, director of Ford's truck division. "I won't sell any more trucks because of this campaign, but it's certainly good for brand image."
Nestlé took out advertising in major newspapers to deny an article in the daily Folha de São Paulo that suggested that its donation could influence the government antitrust agency, which is about to rule on Nestlé's acquisition of a local chocolate maker, Garoto.
But for many, motives are not important.
"Yes, some people want to be close to the government; they want to be in the family photo," said Guilherme Leal, chief executive of Natura, a cosmetics company that has burnished its reputation by harvesting rare Amazon fruits and herbs from sustainable forest plantations. "But it doesn't matter, because they end up participating and committing themselves," he said. "Once you're involved, it's costly in image terms to get out."