Between March and May of 2005, over 800 maquiladoras in the six border states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo Leon and Tamaulipas were contacted (via email, fax, and/or phone) to solicit their participation in this first-ever Border Philanthropic Survey of the Maquiladora Industry with the aim of gaining a better understanding of their tendencies for charitable giving. In the end, 110 maquiladoras completely answered the survey questionnaire (another 23 completed partial surveys, although their responses were not included in this analysis).[1] The maquiladoras participating in this survey represent 8.2% of the total border area’s maquiladora workforce. Additionally, a representative sample of 50 nonprofit leaders from along the border were also interviewed with the goal of assessing current trends in corporate giving in the border region so as to better develop ways in which border area community foundations may contribute to catalyzing expanded philanthropy and volunteerism among corporations doing business on both sides of the U.S.-Mexico border.

The key findings were as follows:

• While there are notable exceptions of corporations setting the standard through their philanthropic leadership, for the vast majority of companies operating maquiladoras along Mexico’s northern border, charitable giving is substantially lower in Mexican border communities when compared to contributions made in the U.S., even when total employee size is taken into account. As a case in point, of the companies surveyed, 65.5% contributed $10,000 or less in cash donations to charitable causes annually, and 25.5% contributed nothing to charities along the border where the operated. Only 9.1% gave over $10,000 annually. As previously noted, an often overlooked reason for this is the current fiscal disincentives that exist in the Mexican tax code, which unduly impact maquiladora operations, together with a very weak philanthropic culture in Mexico and the border region in general.

• U.S. Companies and multinationals with the intent to remain in the border region because of its unique competitive advantages (proximity to U.S. market, relative labor cost, productivity) are more inclined to give charitably in the communities where they operate (to promote employee retention and good community relations) than those companies and/or industrial sectors facing pressures to relocate to other offshore locations. So, sustainability and long-term commitment to border communities is still an important challenge. • Corporate giving in the border region takes many forms including financial support to nonprofit charities, in-kind gifts including products and services, as well as employee volunteerism and employee matching gifts. Among maquiladora operations, the preferred form of charitable assistance is on an in-kind basis. 68.2% of maquiladoras surveyed made in-kind gifts. As cost centers, financial contributions made by U.S. companies operating maquiladoras in the border region are more limited except in those cases where companies have the support of a headquarters’ foundation or corporate giving program.

• Corporations located along the border give charitably for a variety of reasons including a desire to be a good corporate citizen, to strengthen the company’s image or brand, and to build employee morale. In some cases, corporations support social development initiatives locally not because they are concerned about unsatisfied needs in the border region, but because of global Corporate Social Responsibility (CSR) policies.
• Some border corporate giving is clearly reactive, in response to governmental regulatory compliance issues or to rectify environmental problems caused directly or indirectly by a specific company’s operations. Other charitable giving is based on social pressures and/or personal commitments made by plant managers or other senior employees to support specific charity events or onetime requests by local service organizations (e.g. Rotary Clubs, Kiwanis, Optimists, Lions) or maquiladora associations. Finally, along the border, numerous examples of corporate charitable giving efforts that are more pro-active or strategic in nature are aimed at addressing a priority community-based issue or need over a sustained period of time. These efforts are usually with the commitment of not just financial or in-kind resources by a given company, but also the investment of employee time and/or matching grants.

• The single biggest determinant for charitable giving by companies operating in the border region is the presence of a strong champion or champions within a given company for a specific nonprofit or charity. More often than not, key funding decisions are not taken by headquarters but rather based on the recommendations of plant managers. Here, the level of knowledge and/or level of engagement by a specific plant manager with a given nonprofit is among the most important factors leading to future support. Notwithstanding, in some cases there is evidence that suggests that these companies do not follow a rigorous selection or screening process that guarantees the optimal allocation of their contributions. In most cases, maquilas simply support those organizations that knocked on their door, were the most visible in the community or offered assistance to those organizations identified by their employees.

• The proximity of corporate headquarters and/or senior management to the border region truly does matter. Companies with headquarters or regional office locations within close proximity to their border operations are more inclined to have senior managers actively involved with border area charities on a voluntary basis, and subsequently, are more inclined to be strong advocates for specific charitable causes. For example, Mattel, based in El Segundo, CA, has a longstanding commitment to Hospital Infantil de las Californias through their annual sponsored golf tournament.

• The level of corporate giving varies from community to community along the U.S.- Mexico border. For example, corporate giving represents a larger share of charitable giving among nonprofits in major maquiladora centers and retail markets such as San Diego/Tijuana and El Paso/Juarez. Smaller communities such as Tecate and Nogales are more reliant on support from the government, individual contributions, and other income sources including fee for services. In smaller communities the pressure to give among their maquila peers was also less visible, so having a critical mass of companies giving at some level (even if it is small) contributes to other companies that are less philanthropically inclined to give.

• In some cases, local corporations have come together as a united front to strengthen civil society through charitable giving via voluntary monthly contributions, as exemplified by Fundacion Empresarial Chihuahuense (FECHAC) and Fundacion Empresarial Sonorense (FESAC). Where this has occurred, local corporations have set an example for engaged corporate community, establishing solid trusted institutions that can properly manage and distribute funds in their respective communities. As a result of both FECHAC and FESAC, communities in both Chihuahua and Sonora have seen a marked increase in corporate giving, and as a result, civil society has been strengthened. Here, an opportunity exists to establish similar corporate donor circles in Baja California and Tamaulipas, working in close collaboration with Fundacion Internacional de la Comunidad (FIC) and the Fundacion Comunitaria de Matamoros.

• Given the limited resources currently available by many companies for charitable giving in the border region, there is a desire by some companies to partner with other likeminded companies and/or funders in support of worthy charities. This is highlighted by the active role that local Rotary Clubs and Fondo Unido (United Way) chapters play to engage maquiladora managers in coordinated charitable giving to communities along the border. Here, border area community foundations, in particular those members of the Border Philanthropy Partnership (BPP), have a potential catalytic role to play in bringing like-minded corporate actors together to make a difference as well as exploring ways in which they can partner or collaborate with Fondo Unido (United Way) and other service organizations like Rotary International, Lion’s Clubs and Kiwanis Clubs.

• Increasing foreign competition has led to the closure of a growing number of maquiladora operations and facilities in U.S. border communities over the past four years. Fortunately, this has not necessarily led to all these companies walking away from their charitable commitments as exemplified by Levis Strauss & Company honoring its previous charitable commitments in El Paso and South Texas. Still, Levis Strauss is more the exception rather than the rule.

• Companies have a preference toward funding more established charities and those with an existing U.S. 501(c)3 counterpart organization. Here, companies are looking to fund nonprofits with an existing track record and proven achievements, a strong board of directors with recognized community/civic leaders, and a high degree of transparency including a commitment to annual independent financial audits.

• Companies operating border area maquiladoras are also more inclined to be involved in charities focusing on health and education, as well as children and youth issues. In contrast, they are less inclined to support nonprofits in the areas of the environment or human rights/social justice.

• Among corporate givers, the strength of a nonprofit’s brand matters and is increasingly becoming more important under the new face of philanthropy. As Keith Epstein highlights, “In an attempt to become more strategic in their philanthropy, corporate donors are tying their gifts more closely to their company’s business objectives, short-, medium-, and longterm.”[2] Those nonprofits with a strong brand identification and/or visible presence in a given community (e.g. FEMAP in Cd. Juarez, Hospital Infantil de las California, and Fundación para la Protección de la Niñez I.A.P in Tijuana) are more apt to receive corporate funding/support. To the extent that a corporation is able to strengthen their brand or corporate identity by aligning themselves to a selected nonprofit, the probability of charitable giving dramatically increases.

• Given corporate funding preferences along the border, there is a widening gap between the “haves” and “have nots” among nonprofit organizations. The nonprofits and charitable causes that are less likely to receive support are generally the smaller organizations and those without “donatario autorizado”[3] status, or the economic means to pay for an annual audit. Here, border community foundations can play a critical role in serving as fiscal sponsors to help worthy but otherwise overlooked border area nonprofits to receive corporate funding or to improve the likelihood that smaller, less known, nonprofits are considered for funding.

[1] Of the participating maquiladoras surveyed 87% identified the origin or location of their parent company predominantly in either the United States or Mexico

[2] Epstein, Keith. Philanthropy, Inc. Stanford Social Innovation Review, Stanford, Summer 2005. Pg. 22

[3] Term used to refer a nonprofit organization with tax deductibility.