The Historical Development of Business Philanthropy: Social Responsibility in the New Corporate Economy M. MARINETTO University of Wales, Swansea Companies and business leaders have long engaged in different forms of alf of this paper is to explore of business-led social action during the early years after the Second World War. Our contention in this analysis is that business philanthropy was shaped by the new is development meant the use of shareholder assets for philanthropic activities was rendered legally problematic. Hence, whilst company giving to social causes was still permissible, industrial concentration and the growth of Sharebolder-owned entities placed significant limits on the ability of and, ultimately, to society. ‘country undertook ‘along. social- Business History, VoL41, No-t (Oct. 1998), pp.1-20 PUBLISHED BY FRANK CASS, LONDON2 BUSINESS HISTORY (GGiRERE PARP Mois entaited a radical break with the dominant social licies of the inter-war period. There was ‘concerted state intervention in reconstruction was the formation of the This held major implications rally, the introduction of the welfare st the dominant form of source of. ‘welfare provision up to the 1920s both dependent upon the public sector for funding and peripheral to the state services. ‘On closer inspection, however, social action on the part of industrialists ‘and charities did not become superfluous in the post-war era. While charities in the welfare sector had certainly lost ground to the new state agencies, the voluntary sector continued to flourish after the establishment of the welfare state, as shown by Green and Murphy in an early post-war ‘study of charities.’ Prochaska writes in a similar vein: Though little reported, voluntary traditions carried on with considerable vigour after 1945, shifting ground where necessary and pioneering terrain which the state dared not enter. Moreover, a concentration of attention on those charities fulfilling welfare services ‘obscured the many other voluntary campaigns which prospered.* j ‘This suggests that there were still opportunities for enlightened business ‘owners and industrialists — as non-statutory agents ~ to engage in social ivi jects. Indeed, evidence shows that ss in the business role of contributions were often fragme! sector, there were some notable, ‘Christian business leaders have a role in ‘corporate philanthropy, especially in the post-war years. A profile of leading businessmen in 1955 found evidence of fairly extensive religious affiliation. But many of these entrepreneurs did not seek to promote a Christian ethic in business.’ The passive stance of these individuals was not reflected throughout the Christian or business community. Some church leaders, such as Archbishop William Temple, argued that Christianity had to make up ground lost to the influence of secular forces in wider society. Such Eoncems were not lost on the missionary and ecumenical leader JH. ‘Oldham, who moved in the same circles as Temple in the 1930s. Both wereBUSINESS PHILANTHROPY 3 involved in the Life and Work conferences which sou; ing such concerns was ‘rontier ly he pursued tian News-Letter in 1939. Oldham extended the work began under the Christian News-Letter by forming the Christian Frontier Council. The first meetings of Christian Frontier, as it was initially known, took place in the early months of 1942.* Several public and professional figures of note attended these gatherings. Amongst those involved in the first two meetings were the MPs Henry Brooke and Henry Willink, Minister of Health 1943-45, A. Wilfrid Garrett, the Chief Inspector of Factories, and Lady Cripps, wife of Sir Stafford. Significantly, there were representatives from the world of commerce: George Goyder, general manager of the Newsprint Supply Company; Humphrey C.B. Mynors of the Bank of England; and Allan Campbell Macdiarmid, managing director of Stewarts & Lloyds. The main principles of association agreed in April 1942 were as follows: to discuss the application of Christian beliefs; to direct modern society towards Christian influences; and to co-operate with groups attempting to promote similar ideas. Oldham sought to realise these objectives primarily through conferences, study groups and articles.” ‘One key battleground was the arena of business and industry. In 1942, Oldham acknowledged in the CNL that much of the discussion taking place was dominated by academics. Oldham as a result formed various study groups to ensure greater industrial and business representation. The CEC hhad established seven of these groups by the summer of 1942.* Four such groups were convened to examine business issues. The group looking at the profit motive in industry was co-ordinated by the businessman George Goyder and the manager and accountant Basil Smallpeice. In addition, the CFC managed to attract some high profile names from the business world. One illustrious company head to join Oldham’s Christian Frontier Council ‘was Samuel Courtauld — chairman of the textile manufacturing company Courtaulds. A strict Unitarian background instilled in Courtauld an attitude that riches bring social responsibilities. Courtauld attended his first CFC ‘meeting in November 1942 and was actively involved as treasurer and then ‘chairman of the finance committee until his death in 1947 The CFC provided what in modem parlance might be termed a networking forum. Its central protagonists were policy makers, industrialists and religious leaders. Within the forum there were ‘opportunities for the interchange of ideas. Most notably, the CRC could lay claim to having influenced George Goyder's seminal texts, The Future of4 BUSINESS HISTORY ion of @ co-operative structure where directors would act as trustees, safeguarding the interests of different stakeholders. This could be written joyder’s writings, which germinated in the CFC, held certain resonance in the business community. The entrepreneur Emest Bader was inspired by Goysder's ideas to transfer the ownership of his plastic resins business. This ‘was one of the many innovations which inspired E.F. Schumacher to write his influential treatise on small work units and communal ownership. However, the overall influence of the CFC could not be described as far- reaching or comprehensive. The lack of progress of this organisation beyond 1950 indicated that the movement was a diminishing force, especially in the business community.” By the 1950s, the composition of the CFC began to shift. There was an influx of high-ranking civil servants and politicians. At the same time, various key members of the CFC rescinded their membership. Some notable representatives from industry and commerce gave up their involvement in the CFC due to increasing business commitments. After the late 1950s, individuals joining the CFC were generally from outside the business elite. A CFC membership list from the late 1950s showed that 11 of its 39 members were business representatives but few of these hailed from major companies. The diminution of big business representation in the CFC reflected a significant trend: that businesses in Britain seemed to be disengaging from the church, particularly the established tradition. A notable illustration of this development was the composition of the Church of England’s lay leadership during the 1950s. For example, the House of Laity in the Church Assembly, traditionally dominated by professionals, saw a decline in the number of business leaders. ‘The proportion of members of the House of Laity holding directorships declined from 28 per cent in 1907 to 17 per cent in 1955."* There was also a diminution in the number of representatives in the House who hailed from the 100 largest companies. The proportion fell from 16 directors in 1907 to six in 1955. Jeremy notes: ‘On these bases capitalism was distancing orBUSINESS PHILANTHROPY 5 eS issue will be explored in greater detail in the next section, The prospects for British capitalism in the immediate aftermath of the war settlement seemed bleak. For a start, commercial expansion was hindered by economic depression and by general managerial inexperience in coping ' with large amalgamations. However, the impediments placed on growth came to an abrupt end in the 1950s. This was a decade when the movement towards concentration got under way with grea Census of Production are revealing. argest 100 companies increas 26 per cent in 1953 to 38 per cent in 1963. Generally, most of this post-war concentration movement was brought about through mergers. Much of this activity centred around those major industrial groups established in the earlier wave of amalgamations during the 1920s. (New players were beginning to emerge in the field, such as Glaxo and Plessey.)" ‘A number of factors contributed to stock banks, insurance firms . = i Inez and jm sce“ poertl ail Be tad ia Scott estimates ion of y families and individuals declined from 65 per cent in 1957 to 28 per cent in 1981. During the corresponding period, the holdings for financial institutions increased from 21 per cent to 57 per cent." To attain strategic control over their industrial investments, financial institutions cultivated networks both in financial houses and in industri They extrapolated from such developments that the Jinks between the ownership and control of capital had been abrogated. This division was perceived to have facilitated a greater interest in wider social6 BUSINESS HISTORY corporations is responsible to constituenc ‘Its responsibilities to the general public are ‘widespread: leadership in local charitable enterprises, concer with factory ‘architecture and landscaping, provision of support for higher education, and even research in pure science ey as mad In the heady days of the post-war economic b of the welfare state, this managerial thesis seemed to havi ‘Nichols tested this thesis in a study of businessmen from a specific city location, given the pseudonym of Northern City." In the study, many of the themes ‘relating to the managerial hypothesis — business ideology, ‘ownership and control and corporate social responsibility — were carefully scrutinised. The study was based around a survey of 65 business managers selected from 15 companies. interviews, Nis It was concluded that ‘the conception of social responsibility held by most Northern City businessmen was some distance removed from that advocated or implied in much of the ‘management literature’. ‘The sample of businessmen in the Northern City study was not entirely representative of private sector managers in this period. However, there is substance to Nichols’s findings that modem day businesses have not wholeheartedly aspired to social and political goals, as envisaged by several, mainly American, theoreticians. Indeed, these findings were ‘supported by other studies of corporate giving and charitable activities. ‘The erroneous assertions made by managerial theorists derive mainly from their lack of real insight concerning moder capitalist ownership. Studies of ownership patterns in Britain and America have shown that traditional family-controlled enterprises are no longer the dominant form of private 0 al ‘Most companies are controlled through what John Scott terms aBUSINESS PHILANTHROPY 7 (CGoRMETAHONOF MENS This includes personal investors, but more importantly institutional shareholders and financial intermediaries.” Clearly, evidence from research reveals that managerial theorists have been over-optimistic about the separation of ownership and control. However, modern corporations did not disregard socially responsible avtivinivy rour court. Uhabubtealy, the tegat ownerstitp claims of individual and institutional shareholders established well defined parameters for corporate giving to charity. But within these legal and financial limits, companies still reserved funds for charitable causes and voluntary organisations. The 1962 Jenkins Committee on Company Law Reform asserted that directors should be able to make charitable donations without the threat or fear of court action by shareholders. Charitable giving was regarded by the committee as a way of maintaining the goodwill of the wider public.” A study by the Economist Intelligence Unit (1957) examined the incidence of business philanthropy during the early post-war years.* The Intelligence Unit approached a total of 900 British firms categorised according to 16 different industrial categories. Out of 381 replies, only 232 were suitable for statistical analysis, but these respondents covered all 16 of the sectoral categories used by the researchers. ” Only 12 of the 381 companies examined actually had definite policy guidelines. These outlined suitable organisations and preferred causes for charitable gifts. The companies in this early study seemed to operate their own informal criteria when making contributions. The criterion used was instrumental in concern, Such an emphasis was not surprising in view of the movement towards industrial concentration and the high level of competition which prevailed in the 1950s. For 60 per cent of respondents, giving was guided by the possible benefits they would bring to the company and its employees. ywed that into va a doy man cement emergence of large, predominantly shareholder-owned corporations restricted the financial autonomy of company heads in making donations. Such developments placed pragmatic criteria — that charitable gifts should promote commercial interests — on giving policies. Compared to the industrial philanthropists of the Victorian period, these developments made for a staid and passive approach on the part of enterprises towards social responsibility. ‘Throughout the early post-war years, corporate involvement was equated with the provision of formal donations to the subscription lists of8 BUSINESS HISTORY large charitable and voluntary organisations.” Symptomatic of this was the emergence of charitable foundations, such as Nuffield Foundation (established in 1943). These trusts reflected the vast wealth generated by some individuals due to economic expansion. They also tended to suggest that businesses were beginning to institutionally separate their social and commercial practices, although not all charitable trusts, the Leverhulme ‘Trust being one, conformed to this pattern. This contrasted with the more proactive strategies adopted by American corporations in the late 1950s and 1960s. Heald notes with regard to the US: Formal monetary contributions, of course, were by no means the only form of corporate assistance to community and philanthropic agencies. Loans of company personnel, gifts in kind and services, use of company clerical and other facilities, payroll deduction plans, sponsorship of community activities, advertising, and a host of similar services added untold amounts to the values actually contributed by business firms.” By the 1960s, American corporations were prepared to tackle major social problems. Neubeck studied the initiatives taken by companies — including ghetto factory projects, housing development and educational schemes ~ to rejuvenate the urban district of St Louis in Washington.” ‘This emerging interest in corporate social ital ‘transformation in the nature of ong-term economic de undermined the stability that marked the early decades of the post-war period. This economic recession proved deep-seated and highly unsettling, forming part of an intemational crisis of confidence afflicting all OECD countries. Major economic indicators — high unemployment, rapid inflation and slow growth — revealed that the post-war economic boom in many Western states, including Britain, was coming to a dramatic end.BUSINESS PHILANTHROPY 9 As economic conditions worsened throughout the 1970s, politicians endeavoured 10 address the problems by focusing on wage inflation, Wilson's Labour government in 1968 began the whole process by attempting to reconfigure industrial relations." This meant restricting free collective bargaining and introducing incomes policy measures to hold down inflationary pressures.” These interventions were ultimately futile and in fact led to a deterioration with regard to industrial relations and economic management. yur Party's industrial strategy ~ published in Labour's Programme for Britain in April 1973. This was subsequently incorporated into its election manifesto of February 1974.” The Labour programme offered a more fundamental programme of action when compared with incomes policies edad . As explained in the manifesto, this was to be achieved by combining state intervention with democratic controls over the private sector. The most controversial element in the policy was over the creation of a National Enterprise Board (hereafter, NEB). It was envisaged that this body would carry out selective nationalisation and provide subsidies for manufacturing firms. The strategy also made proposals for ‘planning agreements’. Here financial assistance from government would be provided in retum for public control and democracy in the workplace. Although this proved a radical agenda for Britain, even Heath's tive government, in the same period, published a White Paper on ‘The paper is private sector was growing debate about business responsibility. Business spokesmen and sympathetic academics penned several articles and texts on the subject of social responsibility between 1973 and 1976.” Possibly the most significant and comprehensive publication was the CBI’s Company Affairs Committee report on The Responsibilities of the British Public Company. In the report, the recommendations for companies to However, there was disapproval of any external interference in company affairs to secure compliance with social objectives. Here the report seemed to be tacitly referring to Labour's ‘manifesto commitments over the NEB and planning agreements,10 BUSINESS HISTORY Indeed, when Labour came into power after the 1974 election the proposals for the NEB and planning agreements faced intense opposition from the private sector. Companies and their representative organisations mounted a virulent campaign of opposition to the 1974 White Paper on industrial regeneration. Despite preparing the legislative ground for the NEB and planning agreements, the worst fears of the private sector did not materialise. The Labour leadership did its utmost to dilute the plans for industrial development, adopted by Labour while in opposition. The provisions of the Industry Act, passed in November 1975, was a pale version of the original NEB planning agreements strategy. After the Act, planning agreements were organised on a purely voluntary basis, The only agreement conducted by TheNEB was with the Chrysler company at the end of 1978; in fact, many subsidies were handed over without planning agreements or conditions placed on public and democratic control. The Labour government had abandoned many of its original proposals. As such, a revised version of the industrial strategy was formally presented after a meeting of the National Economic Development Council in November 1975. ‘mainly confined to areas deemed acceptable to the private sector, In accordance with the CBI’s recommendations, the government established 40 sectoral working parties to improve industrial performance. These sectoral plans made no mention of nationalisation or planning agreements. ‘The events culminating in this revised strategy and the nature of the new policy generally augmented direct links between government and business. In addition, the economic and political vicissitudes in Britain during the 1970s led a number of large companies to form specialist in-house departments for liaising with the government. For the Labour government, such links provided a symbolic demonstration that its new industrial and, for business, such co-operation created strategy was succeeding; tripartite model of partnership for industrial policy ‘especially in education, partly as a ploy to reinforce co-operation in the former area. There was a proliferation of national organisations: the Department of Industry's Industry/Education Unit, the CBE-sponsored Understanding Business Industry (UBI) and the Industrial Society, and local bodies to develop closer liaisons between industry and education.* ‘Studies done at the time confirmed the general raising of interest and ‘awareness among companies over corporate responsibility. In one survey,BUSINESS PHILANTHROPY " med rejected the view that profit is the sole priority of business.” In another study of company policy statements, Melrose-Woodman and Kemdal demonstrated how enterprises, both in statements of philosophy and concrete actions, took seriously the noti ‘programmes was the British subsidiary of the American computer hardware ‘company, IBM. The schemes pioneered byl IBM) placed the onus on businesses ass v ‘The company helped establish two projects, which are now folklore in the history of modern corporate philanthropy. The first project was the Trident ‘Trust, established in 1970 through the work of IBM’s public affairs director, ‘The Trust functioned as a progenitor for vocational schemes under local education authority management. A close relation of the Trident initiative was the Action Resource Centre (hereafter ARC), founded in 1973. The organisation was formed to act as a clearing house for business secondments to community and voluntary groups." Other British-owned corporations were also beginning to contribute to social schemes during this time. These early programmes were mainly directed at tackling the problem of unemployment through small business creation. Initially, it was industrial firms such as British Stee! and Pilkingtons who were involved. Such firms supported small firm development through the provision of work-space and advice. This assistance was targeted in localities where these companies had carried out ‘major redundancies. Engagement in this type of social activity was widened to include service companies which were not under the same pressures to streamline as heavy industries. Shell UK in 1978, under the Chairman of the Shell Transport & Trading Company, C.C. Pocock, created the Shell ‘Small Business Unit. Again, this provided entrepreneurial advice for those interested in forming their own businesses. Following Shell, the Midland Bank, in 1979, announced a financial support package for the small business sector. In addition to assisting the small enterprise sector, the Midland supported ARC and furnished secondments to the GLC London Industrial Centre.” An important factor in widening business interest in small firms concerned the growing collaborative ties between Whitchall officials and2 BUSINESS HISTORY senior company directors. A coterie of significant officials within the DOE and DTI realised the interest in small firm development in the corporate sector. As such, they brought together the directors of nine major ‘corporations, including Shell and IBM, to pursue this policy in the late 1970s. The result of their work was the setting up of the London Enterprise Agency (hereafter LENTA) in 1979 —an agency which pooled the resources ‘of private companies to help small firm development and inner-city rejuvenation in the London area.” The formation of LENTA provided the template for the subsequent expansion of corporate social involvement throughout the next decade. political and economic evenls of these years, as we we seen, legitimised more extensive private sector involvement in society. Symptomatic of this was the Labour government's general attempt to embrace the precepts of the market in response to economic and political pressures." The Labour government's dalliance with the market proved a decisive turing point in British politics. However, the adoption of monetarism by Labour was an expedient response to crisis; for the incoming Conservative government in 1979, this economic philosophy became a strategy in its own right. A key element in all this was the use of market mechanisms to reorganise the public utilities and social services. Towards this, the Conservatives envisaged greater opportunities for business involvement in ‘community action and in shaping public policy.” Influential ministers and officials began to champion and promote the idea of corporate social /olvement within government and the private sector. Charitable and community contributions provide an objective measure by which to gauge the growing importance of corporate social involvement in this period. Theoretically, charting the level of corporate giving to charities should be a straightforward matter. Section 19 of the 1967 ‘Companies Act, amended by the 1980 Statutory Instrument No. 1055, required public companies to disclose charitable and political contributions exceeding £200. Passing a law and enforcing it are completely different matters. As such, companies have not filed the information on giving as required by the 1967 Act. Studies of corporate disclosure have found thatBU: /ESS PHILANTHROPY 1B the social information, both qualitative and quantitative, included in ‘company reports has been limited in value.” Researchers in tum have used alternative sources of information to compile a statistical profile of company giving. The government's National Income and Expenditure Survey published in 1981 and charity statistics, such as those provided by the Charities Aid Foundation, have enabled Norton to develop a profile of charitable giving by the top 200 companies between 1979 and 1987. In accordance with the rising significance of corporate social involvement during the 1980s, there is a real increase in charitable giving in this period ‘At the same time, the process of corporate giving Conservative administrations throughout the 1980s introduced new fiscal measures to attract company giving. These measures were introduced by the Conservatives immediately on entering office. The 1986 Lawson Budget presented a £70 million package of fiscal reforms for charities. According to its author, this package was guided by the assertion ‘that the best way to make such concessions is to assist, not the charities themselves, but the act of charitable giving’.* To encourage corporate donations, the 1986 Budget gave companies tax relief of up to three per cent of their annual dividend to shareholders for single donations to charities and voluntary organisations. TABLE 1 DONATIONS TO CHARITY BY THE TOP 200 COMPANIES (ADJUSTED TO 1987 PRICES) Donations Year (Emittion) % of Pre-Tax Profits 1979 397 ous, 1980 20 019 1981 374 021 1982 400 024 1983 412 021 1984 493 os, 1985 498 020 1986 608 022 1987 63 wa ‘Sources: The information for this table was based on figures found in M. Norton, Corporate Donor's Handbook (London, 1987), p.7; and idem, A Guide 10 Company Giving, 1985-89 Edition (London, 1988), pS.14 BUSINESS HISTORY Such has been the effectiveness of these fiscal reforms, coupled with the ‘growing preoccupation in corporate social involvement, that increases in corporate giving continued into the 1990s. A 1990 survey of 1,355 companies by the Directory of Social Change found that charitable donations totalled £134 million and declared community contributions at around £225 million. This amounted to a 50 per cent increase since 1989, with charitable contributions representing 0.25 per cent of pre-tax profits and community contributions 0.42 per cent." A later survey of 1,430 ‘companies in 1992 found that total charitable donations equalled £169 million — a 15 per cent increase since 1990. The top corporate contributors to social activities tends to shift over time, albeit not too dramatically. For example, the list of top corporate contributors in 1986 included Nat West in first place with donations of over £8 million, followed by IBM United Kingdom with £3.6 million and the third most generous company was Marks & Spencer donating £2.9 million.® The top donors in 1991-92 saw a number of significant changes, in fact it contained only five of the companies that were in the top ten bracket in 1986. The company with the highest community contributions was British Telecommunications with donations of £14.5 million. In 1986, it stood at forty-ninth in the list of top 50 corporate donors. British Petroleum was the second highest social benefactor in 1991-92, donating £14.1 million, Marks & Spencer, which was the third most generous corporate donor in 1986, gave £5.5 million in 1992 and secured the tenth spot. Survey techniques of company giving have grown in sophistication, Thus, it is now possible not only to trace how much companies give but where their donations are destined for. The Charities Aid Foundation conducted a major survey of the leading 400 company givers in Britain during the 1991-92 period. Within the sample of responding companies, the CAF chose a sample of 86 companies in order to compare their giving practices over a four-year period between 1988 and 1992. These companies gave £136.2 million in 1989-90 and this increased to £148.1 million in 1991-92. Respondents also gave details about the type of voluntary and community activities supported by their charitable contributions. The CAF listed 14 main categories of charitable activity. Only £42.9 million was directed towards these 14 categories in 1991-92, bbut the amounts given do give an indication of the areas supported by companies. Educational activities gained the largest slice of money at 35 per cent. The next major beneficiary of company donations was medicine, which gained £4.8 million in 1991-92, amounting to 11 per cent of the total. The arts were well supported, gaining £3.7 million from the 86 sample companies, whilst the environment gained 4.9 per cent of cash donationsBUSINESS PHILANTHROPY 15 worth £2.1 million. A less methodical survey of the community and social activities supported by corporations was conducted by Gillies for the Per ‘Cent Club ~ a body that seeks to promote charitable giving in the corporate sector. It was found that 80 per cent of board policies actually state the areas in which companies will become involved. These were spread across a range of fields but the core areas of company support were education and training with 87 per cent of respondents identifying these as core areas of involvement, environmental issues at 73 per cent and economic regeneration at 58 per cent.” Although these studies are revealing about the extent of corporate social involvement throughout the 1980s and early 1990s, they only tell part of the story. Corporate social action during the 1980s was not confined to philanthropic giving schemes. A characteristic feature of this period were the efforts made by the government and by sections of the private sector actively to involve business in society. There were increased opportunities for private sector involvement in public policy and in dealing with social problems. The then Secretary of State at the DOE made a telling statement of intent concerning business social involvement. In a speech to the London Chamber of Commerce in February 1981, Michael Heseltine drew parallels between the Victorian commercial philanthropists and socially active role that modem day business leaders could play: ‘The founding fathers of the great cities of Britain ... put back amenities, schools and parks into an area which they too lived close at hand ... I want to engender the belief that if the private sector takes on a more positive, assertive role in local affairs, the benefits to the community will be enormous.” Carrying on from projects which began in the 1970s (see above), the social initiatives involving business during the early 1980s focused on assistance to the micro-business sector. (For proponents of corporate social involvement, aiding the development of the small firm sector would also contribute to the well- being of local economies and communities.) ‘The immediate context and cause for this emerging interest in corporate social action in the small firm sector was the recession of the early 1980s. In response, the government, inter alia, introduced a whole panoply of ‘measures to develop and support the small firm sector. The micro-sector economy was vaunted as better equipped than monolithic state-owned entities for the task of stimulating enterprise in local communities. Such interest gave a significant boost to those officials within the DOE who had endeavoured since the late 1970s to promote corporate involvement in local economic matters. Indeed, concern surrounding the small business sector was used to consolidate interest in corporate social responsibility. After the 1979 election, the same civil servants, who were involved in the formation of LENTA, were still in place. They embarked on the task of16 BUSINESS HISTORY winning over the new Secretary of State for the Environment, Michael Heseltine, to the idea of local enterprise agencies for promoting the development of small businesses. Heseltine proved himself receptive to the overtures being made by the DOE mandarins. He subsequently agreed to visit the St Helens Community Trust, one of the first local enterprise agencies to be established. Heseltine was suitably impressed by the Trust, and after the visit be launched plans to create 30 enterprise agencies by the end of 1980.° ‘The Secretary of State at the DOE played an important part in trying to centhuse the private sector about the contribution that businesses could make to urban and local economic regeneration.” To help the process, an Anglo- ‘American conference on corporate social involvement was organised in April 1980 by the Department of Trade and Industry (hereafter DTI) and the DOE. ‘The conference gave company representatives, mainly from the United States, ‘an opportunity to share their experiences regarding business involvement in social action.” The discussions, though, produced concrete results: it was concluded at the conference that a national umbrella organisation was required to promote local enterprise agencies throughout the country. ‘A working group on community involvement was formed, consisting of DTI and DOE officials, senior managers from BP, Fison, the Coal Board and high-profile executives ~ Marcus Sieff from Marks & Spencer, and Alastair Pilkington. The group mulled over the possibilities of forming a co- ordinating agency of the type discussed at the conference. Subsequently, report containing a proposal for a Business in the Community Unit was published by the working party four months later. By I June 1981, Business in the Community (hereafter BITC) was officially constituted, with two full-time administrators seconded from the DOE and Shell. The organisation soon attracted major figures from the corporate world to act as executive board members. For instance, Tiny Milne, then at British Petroleum, assumed the position of part-time director.” ‘Once formed, BITC continued to promote partnerships between government and business representatives. The objective was to create a support network for local enterprise agencies. In this formative phase, BITC was assisted by a number of seconded assistants that operated in tandem with the Small Firms Minister, David Trippier, to establish enterprise agencies in specified areas. Helped by BITC’s co-ordinating work and the provision of tax concessions for local enterprise agencies, the number of agencies grew dramatically from 40 in 1981 to 100 by May 1983. By the late 1980s, this figure increased to 250 and by the early 1990s there were over 300 local enterprise agencies operating in Britain.” ‘What is most significant about BITC and the local enterprise agencies has been their contribution towards mobilising corporate interest in localBUSINESS PHILANTHROPY yn economic rejuvenation. For instance, two and a half years afer being founded, BITC’s membership rose from 20 to 200 companies. The number of businesses sponsoring enterprise agencies also grew appreciably: within the space of a year, between 1984 and 1985, the sum total of businesses actively engaged in furnishing monetary support for enterprise agencies rose from 1,477 to 2,242. The actual contributions from these companies totalled £10 million for that year.* Significantly, as the 1980s progressed, BITC expanded its concerns. By the middle of the decade, the organisation was developing programmes to encourage corporate involvement in environmental protection” and in providing support for education.* With mounting interest in corporate social involvement, as indicated by the work of BITC, a number of enterprises established specialist in-house units for organising corporate social activities across a variety of areas — not only small firm assistance.” One survey of the community policies of 230 firms, provided evidence on the specific causes adopted by socially active companies. The environment, education and local economic development were the most popular areas of intervention for the businesses in the study.* There is also a growing body of qualitative evidence which is detailing the community activities of companies. Some of the practices include the representation of directors on semi-public bodies such as the Urban Development Corporations, the secondment of staff to voluntary “organisations, and the involvement of full-time public or social affairs staff in supporting community-based programmes.” Overall, such evidence shows that some of the most significant developments in the post-war history of business social involvement have taken place in recent years. Research now needs to assess whether corporate social activism has been able to address social problems in the way so confidently envisaged by governments during the 1980s and early 1990s. NOTES. 1. L Green and G.W. Murphy, “The Income of Voluntary Social Services of Manchester and ‘Salford in 1951 and a Comparison with 1938", Social WeYfae, Vol.9 No.4 (1954), pp-78-96. 2 Prochaska, The Yointary Impulse: Philanhopy in Moder Briain (London, 1988), ppl 3. J-Boswell and J. Peters, Capizalism in Contention: Business Leaders and Political Economy in Modem Britain (Cambridge, 1997), p10. 4. DJ. Jeremy, Capitalists and Christians: Business Leaders and the Churches in Britain, 11900-1960 (Oxford, 1990), pp.193-4, 5. Ibi. p.196 6. Bid, p.198, 17. Toi, pp.198-9, 8 Ibid, p.200. 9. Tid pp.201-3. 10. Ibid, p.207,