The Disappearing Donor Blues

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The beginning of the apparent end of the Borg-Warner Foundation can be traced back to July 1987, when the parent corporation opted to go private to avoid what management perceived as a hostile takeover. (Chairman and CEO Jim Bere was unavailable for comment.) The company assumed a huge debt to finance the buyout, and then began selling assets to pay it off. As Borg-Warner’s senior management changed, so did the names on the foundation’s board of directors and the focus of the foundation’s efforts. According to its last president Ellen Benjamin, Borg-Warner began to trim its arts giving and focus on education-related grants. Years passed, the parent corporation was unable to maintain the foundation’s assets, and the foundation slowly but surely slipped into its present near-moribund state.

Other corporations with a local history of giving to the arts, such as Continental Bank and Inland Steel, have greatly reduced their cultural grants. Still other corporations and foundations have altered their grant-making guidelines or redirected funds. Citibank, for instance, has gradually focused more and more on education; it gives general support to arts organizations depending on their emphasis on educational programs, though money still is available from the bank’s marketing department for sponsoring individual projects. “In a time of belt-tightening, doing something that focuses on educating our children makes more sense than underwriting a musical extravaganza,” says Betsy Howland, Citibank’s national director of educational and cultural giving. The McCormick Tribune Foundation is expected to significantly trim its contributions for the next few years while it pays off more than $60 million in recent grants made primarily to educational institutions, including a $30 million grant to Northwestern University’s School of Engineering and Applied Sciences. “The first time we will be able to look at new grants of much substance will be 1993,” adds McCormick executive vice president Claude Smith.

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