Unlike stock-market investments, which may be bought and sold several times in a day, foreign direct investment usually comes with a decades-long commitment to local communities. When a company expands and grows in the U.S. market, it depends on the region where it sets up operations.
The company also packs along a few cultural traditions. In many cases, that rich heritage involves being deeply connected to the communities. Economist Dan Ikenson, director of the Herbert Stiefel Center for Trade Policy Studies at the Cato Institute, has researched the connection between global investment and community connection. In a study that looked at a decades worth of data, he found that FDI companies in the United States increased their charitable contributions by 125 percent, while the economy-wide average grew by 14 percent.1
Many FDI companies offer their employees the opportunity to volunteer and help direct the company’s corporate social responsibility efforts. Here are a few examples of that diverse community involvement:
The Sanofi Foundation for North America, although not geographically based near the affected area, felt a personal connection to the people of Flint, Michigan. The Foundation donated $25,000 to the Children’s Health Fund in order to fund mobile medical units to be used in and around Flint, which has seen its water contaminated with lead. The units will be used for screenings, health education and will also connect children and their families to intensive medical support.
At a more local level, Sanofi, which is based in New Jersey, donated $100,000 to 11 different nonprofit organizations in the Garden State. The Sanofi in Our Communities: Celebrating Diversity provided each of the company’s nine groups an opportunity to fund up to two nonprofit organizations. Each group selected a New Jersey organization to fund based upon their own unique initiative and demographic that their employee members support.
National Grid has also had an impact on its local communities. Based in New York, the natural gas and electricity company runs a grant program specifically for economic development in its New York service territories. The program aims to promote job growth, infrastructure development, urban revitalization, and disaster recovery, among others. The grant program has awarded more than $70 million for projects that have supported 40,000 area jobs.
National Grid also provides $7 million a year in support of programs geared towards STEM (Science, Technology, Engineering and Mathematics) education. The company further helps its community through its “Power to Serve” program, which coordinates several events focused on local issues, including environmental awareness, hunger action and cancer awareness.
Stop & Shop has taken local recycling to another level with its new initiative. Its Freetown, Massachusetts facility will convert inedible foods (foods that cannot be donated or sold to local food shelters or farms) from all 212 of its New England stores into a biogas that can be used as a power source. The resulting biogas will fuel up to 40 percent of the energy that the facility needs to run for the entire year while keeping 34,000 tons of waste out of landfills. In fact, Stop & Shop already sends approximately 90 percent of its waste to places other than landfills. Ahold USA, the parent company of Stop & Shop and Giant, has also donated more than 5.8 million pounds of safe meat through its “Meat the Needs” program, which offers meat to food banks or other food services.