REIT and REOC managements are always looking for the best ways to invest their human and financial capital to maximize returns for the good of their companies and their stockholders. Many of these companies have found that charitable giving and volunteerism in their communities can be another kind of investment as well. These investments have both direct and indirect benefits for the companies while simultaneously providing the charities they benefit with the financial and volunteer support they need.

Management teams are finding that charitable programs that grow out of their business interests help them give back to their communities while improving local economic conditions, developing the local workforce and showing a human face to what might otherwise be seen simply as a large, corporate entity.

Connecting Business and Community

"The programs we support do have a connection between our business and our communities," says Robert E. Burke, executive vice president–operations, with Boston Properties, Inc. in Boston, MA.

Prior to forming the REIT, Boston Properties' giving programs tended to take on priorities set by the outside organizations that would solicit their assistance. Charitable organizations would approach the firm's executives with compelling appeals. Business and professional firms associated with Boston Properties would also solicit and receive support for their favorite causes. But there was no set plan for which causes should receive funding.

"It was a reactive kind of giving," Burke says. "Several years ago, we decided we wanted to rationalize this informal process."

That decision led to six annual giving allocations distributed among Boston Properties' five operating regions and the corporate headquarters in Boston. The five operating regions are Boston, MA; New York, NY; Princeton, NJ; Washington, DC; and San Francisco, CA.

Allocations among the regions are fairly equal, with the corporate office allocated a touch more and Princeton, which covers a relatively small geographic area, getting about 40 percent of the allocations made to the other regions.

Burke prefers not to cite actual numbers but says that the company's overall annual giving approaches the mid-six figures.

Executives in the five regional headquarters determine where their gifts go with a nod to corporate guidelines. "We try to work with organizations in the five geographic areas," Burke says. "We would be less likely to give to a national organization unless it had a strong regional focus. We are more likely to give to grassroots organizations that provide basic services to local communities. We also focus on organizations whose work enhances educational, cultural or safety initiatives in a community."

YouthBuild USA, for example, illustrates the type of program favored by Boston Properties. This national organization operates in most Boston Properties regions and provides job-training, education, counseling and leadership development opportunities to unemployed young adults, aged 16–24, who are out of school. YouthBuild programs focus on the construction and rehabilitation of affordable housing. Many of the program's graduates go on to construction-related jobs or studies.

"Another organization we have been involved with is the National Foundation for Teaching Entrepreneurship in New York City," Burke says. "This organization develops and provides public high school programs that teach students in urban areas about starting their own businesses."

Boston Properties' interest in such programs stems from its desire to help building contractors develop a better skilled local workforce. The young workers benefit by gaining marketable job skills, the contractors get a better trained workforce and the local economy expands its tax base and reduces unemployment. Boston Properties, of course, also benefits, because the contractors they work with are enhanced through the program.

Burke says the company also looks favorably on requests to support community cultural efforts, such as libraries and other public facilities. "In communities where we are a major landlord, we take an interest in programs that will benefit direct employees as well as tenants working in our buildings," he says.

Finding Jobs for the Underemployed

General Growth Properties, a Chicago-based retail REIT, also structures its philanthropic efforts around business needs, but does so in quite different fashion. "At the corporate level, the Bucksbaum family, the founders of the company, have done a variety of things," says Robert Michaels, president of the retail REIT. "Most notably, they have created a $1 million fund for the International Council of Shopping Centers. This fund promotes the hiring and training of minority students in the shopping center industry."

Proceeds from the fund pay for summer internships. Participating students generally work during the summers between their junior and senior year of college or senior year and a masters program.

"Last year, 15 regional mall companies employed minority students as interns," Michaels says. "This is one of the best programs of its type that I've seen. It has been going on for two years now, and I believe that it benefits the interns as well as the companies that hire them. These students are bright, aggressive young people, many of whom we hope will come to work in our industry, with developers or retailers."

General Growth also participates in United Way fund-raising drives every year and encourages its centers to develop relationships with local community charities.

Centers for Giving in the Community

JP Realty, Inc. of Salt Lake City, UT, has found that fund-raising drives for charities can help promote its retail malls, while providing support for community programs.

The company organizes each of its grand openings around a drive for a local charity. At the end of 1999, for example, JP Realty held a gala sneak preview of its new Mall at Sierra Vista in Sierra Vista, AZ, to benefit JUST KIDS, Inc., a foundation managed by the San Pedro Kiwanis.

The event drew 800 guests and raised $15,000 for the foundation, $10,000 of which came from JP Realty, with $5,000 collected from community members attending the event. JUST KIDS' main annual project is its Stocking Stuffer Program that purchases new clothing for 700 to 900 needy children during the holiday season.

A similar gala held on the eve of the grand opening of Provo Towne Center in Utah saw John Price, chairman and CEO of JP Realty, present a check for $10,000 to the Celebration of Health Foundation, an organization that helps pay for travel and accommodations for the families of children seeking treatment in area medical facilities.

JP Realty also encourages each of its malls to organize giving programs, says Toni Carter, vice president of marketing for JP Realty. And most do, usually during the holiday season. "Our malls are strategically positioned in smaller, middle market areas and have become gathering places for the communities," says Price. "We believe we have a responsibility to be a good community partner, and offering these kinds of programs is one of the ways we do that."

Philanthropic Hospitality

Two hospitality REITs offer still another take on giving. "Clearly we're in business to make money and increase shareholder value," says Robert Parsons, CFO with the Host Marriott Corporation in Bethesda, MD. "This philosophy involves being a good community member and giving our employees an opportunity to participate in activities that help others. By doing this, we believe our employees will enjoy their work more."

As a company, Host Marriott regularly participates in several major community service activities. Last year, for example, the REIT gave employees a couple of days off to work for a shelter for troubled adolescents. About one-third of the REIT's employees pitched in to help clean up and maintain the grounds at these shelters, building walkways through the woods, rebuilding handrails and benches and fixing up the fences surrounding the homes. Host Marriott provided the materials for the work as well as the labor.

Later in the year, the company gave employees time off to paint a local shelter serving homeless families. About 70 employees participated in the project.

One of Parsons' favorite programs is "Denim Friday." In this program, employees make a minimum donation to a local charity. The company matches the contributions and gives permission for the employees who contribute to wear jeans to work on Friday. "Even though we have a casual dress policy, we don't allow jeans and denim," chuckles Parsons. "So this is a way of saying to employees, let's give to charity, and we'll make it fun for you."

Host Marriott also makes direct cash contributions to a variety of local charities. "It's a meaningful number, in the hundreds of thousands of dollars every year," Parsons says. "But while contributing cash is important, we believe that working together with our associates on local projects has a great value."

FelCor Lodging Trust, based in Irving, TX, focuses its philanthropic activities on a few specific charities, so that its giving programs can have a stronger impact on the chosen causes.

"When you become a public company, you are inundated with requests," says Tom Corcoran, president and CEO of FelCor. "While all these requests seem worthwhile, we decided to pick a few and put our heart and soul into them, rather than scattering our activities over a large number of diverse options."

Based on the recommendation of FelCor's general counsel, the REIT has made the cause of the Dallas chapter of the Juvenile Diabetes Foundation (JDF) its own.

Each year, the Dallas JDF organizes a fund-raising walk. In the months leading up to the annual walk, FelCor generates enthusiasm for the event by encouraging employees to organize small ad hoc fund-raisers, with the proceeds going to JDF.

At a recent company picnic, for example, employees bought and sold the rights to throw water balloons at each other.

FelCor hosts a number of CEO luncheons at its facilities over the course of the year, functions at which Corcoran and other CEOs cook and eventually vote on who cooked the best meal. Recently, FelCor collected the recipes from these luncheons and published a cookbook. "We're selling the cookbooks and turning the proceeds over to JDF," Corcoran says.

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