General Motors is eliminating its philanthropic organization as it redirects $30 million in annual donations to focus on global development and education in science, technology, engineering and math.
GM is cutting the GM Foundation to centralize its charity contributions in hopes of stamping a greater global and social footprint, according to Tony Cervone, senior vice president of global communications. The actions, he said, will not reduce overall philanthropic spending.
"Rather than be limited by only those that are restricted under foundation-type rules, GM can work with partners that it chooses to drive specific social change," Cervone told Automotive News.
The overhaul involves passing the foundation's duties to the GM Global Corporate Giving department, which will handle the automaker's worldwide charity efforts and distribute money directly from the corporation. Previously, the money was given to the foundation and then distributed.
The new process will focus dollars on areas with potential to make the most impact on communities, GM contends. The automaker says it's a priority to hone its charity efforts to align with its core values, such as: bettering vehicle safety, reducing accidents and injuries, increasing high school graduation rates and supporting global economic development in cities, especially those where GM has operations and employee presence.
The readjustment began in 2015 when GM hired Jackie Parker to head the company's global philanthropy and corporate giving, a position created to transform 'charity into a more global organization.
With the moves, the automaker is "realigning our GM Foundation and Corporate Giving structure to provide sharper geographical focus and sustained corporate support for our charitable and community activities," a GM spokeswoman told Crain's Detroit Business in 2015.
In Detroit, the company sustains hundreds of small contributions -- some as little as $200 -- to local groups such as food banks, historical museums, high school music programs and fundraisers. GM also funds various worldwide organizations such as the Make-A-Wish Foundation, United Way and the Special Olympics.
The redirected charity dollars won't come as a surprise to the organizations that depend on funding, Cervone said.
"All partners have been involved in either modifying the focus of their programs or have been on a reasonable wind-down of funds if there isn't alignment," he said. "Unless there were very limited funds going to a specific entity, we have worked very hard to limit the financial impact on institutions."
Cervone said GM will "remain fully transparent" in the process by which partners can solicit funds.
Since its founding in 1976, the GM Foundation has donated nearly $1 billion to U.S. charities, educational organizations and disaster relief efforts worldwide.
The company would not disclose contributions for 2016 because tax filings have not been completed.
Notable donations that GM pre-approved for future payments include over $7 million to Buick Achievers Scholarship, a $2 million endowment to the Detroit Institute of Arts and $1.6 million to Kettering University in Flint, Mich.