March 6, 2006

Cable Philanthropy: The Gift That Keeps On Giving

While cable rightly congratulates itself on its charitable work and donations, nobody has ever calculated the monetary value of this critical part of cable's local advantage. In fact, few have tried. Until now.

By Peter Caranicas

When Cable Positive holds its benefit evening honoring Cox's Jim Robbins in New York this week, the organization's president, Steve Villano, will be smiling broadly. This will be the eighth consecutive Cable Positive dinner to raise more than $1 million. That will push to about $16 million the amount Cable Positive has raised to fight HIV/AIDS since the group was founded in 1992.

POSITIVELY RETIRING: Only Cable Positive's Steve Villano (right) could coax retired Cox chief Jim Robbins to be a guest of honor. Good move--the March 7 dinner should bring in more than $1.25 million to fight AIDS.

But cash is only part of the story. Villano and his small, six-person staff leverage cable's media power and local connections to extend Cable Positive's influence beyond dollars. "For every dollar invested in Cable Positive," Villano says, "at least 10 are returned to the community when you include not just the money but the value of airtime for PSA campaigns and the connections we make to local service organizations."

Indeed, there are other examples of how cable's dollars given for good works have multiplied. Dr. John Lange, superintendent of high-poverty schools near Denver, leveraged a $50,000 donation from Comcast and VH1's Save The Music Foundation into $350,000, resurrecting an instrumental music program that's led to higher test scores. As Villano says, "I'd love to find a system to calculate the value" of cable's philanthropy.

The Cable Television Public Affairs Association (CTPAA) quietly took a stab at doing something like that. Last year the D.C.-based public affairs organization commissioned a survey that asked cable operators and programmers detailed questions about their charitable giving and good works in 2004, requesting dollar amounts and details on other kinds of contributions. CTPAA sent out questionnaires to 31 operators and 203 programmers; some of the programmers that responded represent multiple networks.

Of the 34 questionnaires returned, 18 were from operators representing 79% of total industry subscribers and 16 were from programmers, representing 42% of total industry subscribers for programming networks. Extrapolating from these numbers, the survey estimated cable's giving and philanthropic work in 2004 totaled a whopping $1.36 billion.

Naturally, since programmers tend not to be local companies, the bulk of their contribution was in the form of PSA time. And to be fair, some of that contribution spills over into the satellite arena. "We didn't break out the programming percentage that would be carried on satellite," CTPAA executive director Steve Jones notes.

Still, cable's charitable contribution is huge, especially considering that the $1.36 billion total does not include most of the spending and in-kind contributions from such organizations as the Comcast Foundation, the Time Warner Foundation and industry groups like Cable in the Classroom, the Walter Kaitz Foundation and Cable Positive.

IS ANYONE KEEPING THE BOOKS?

But if Villano, or anyone else, wanted to put that figure into historical context, perhaps compare it with totals from other years, they'd be out of luck. In spite of the many organizations that cable funds—and plenty say privately that several of them duplicate each other—this was the first survey of its type. "It's a little surprising that an industry that has been at the forefront of supporting local community organizations over its 50-year-plus history has never, until now, attempted to add up the sum total of those efforts in terms of their financial worth," Time Warner Cable SVP Mark Harrad wrote in an introduction to a report on the findings. Harrad is co-chair of CTPAA's Committee to Create a Favorable Environment for Business Growth.

Indeed, it would be helpful for cable to be able to document its public-minded spirit and localism with facts and figures, especially as it girds itself for a new round of competition with DBS and the telcos. Axioms are repeated when cable gathers for events like this week's Cable Positive fundraiser, but they might be truer than ever: The industry's public face has never been more important as it attempts to generate the goodwill it hopes to translate into market share—and customer retention.

In this ongoing battle, cable's localism is one of its most effective weapons. While DBS and the telcos are engaged in philanthropic causes, none can quite match cable's grassroots relationships.

HOW MUCH DOES DBS CONTRIBUTE?

Being a national business, DBS takes a more centralized approach to philanthropy. For example, in the wake of Hurricane Katrina, EchoStar's Dish Network established an emergency-response TV channel. The channel will be used for national emergencies going forward, Dish's Marc Lumpkin says. The company does not operate a foundation, but donates directly via organizations like the Red Cross. Its employees raised more than $100,000 for direct hurricane relief, and the company matched those funds for a $200,000 contribution.

DirecTV appears to have a broader program. In addition to a cash contribution to the Red Cross for hurricane relief with a matching donation program, the company contributed to tsunami relief and makes cash contributions to a variety of health, education and diversity organizations. It also provides free educational TV to classrooms through its DirecTV Goes to School initiative. The company does not disclose dollar amounts related to charitable giving.

IS ANYONE KEEPING BOOKS FOR THE TELCOS?

Efforts to determine the scope of the telcos' contributions proved fruitless. US Telecom, the industry's trade association, said that the organization does not keep track of overall philanthropic efforts.

Nevertheless, in a business that large, there are bound to be standout accomplishments. For example, Verizon operates the Verizon Foundation, which in the past five years has donated $400 million worth of cash and other contributions to community and nonprofit ventures, says Alberto Canal, the foundation's media relations manager.

The organization is undergoing a major transition because of Verizon's merger with MCI, which has its own foundation. "We're combining the two foundations," Canal says. "The Verizon Foundation is focused on domestic violence and literacy. The MCI Foundation is focused on K-12 education." Even with the merger, Canal says he does not expect any reduction in budgets.

But no business can hold a candle to the strength that cable derives from its wealth of local connections. "Cable makes an immense local effort because it is a local business in 8,500 communities," says Rob Stoddard, SVP, communications and public affairs, NCTA. "It invests lots of time, financial resources and sweat equity in each of those communities, where it employs, directly and indirectly, 1.1 million people."

"Local connections are what distinguish cable from all other delivery systems," Villano agrees. "Our theme at this year's dinner is Positively Community. Broadcast doesn't have the same kind of connection, nor does satellite, nor does telephone. But because of cable's history, and the necessity of working with every community, it has a very strong record of community service."

Of course, local generosity also serves cable's financial interests. "It's important for most of these companies to maintain a high profile as socially responsible," Stoddard says. "Research shows that the industry's community affairs and charitable contributions resonate with customers. That's important at a time of price increases as we're introducing new products and services. It may be a clich�, but it's just plain good business to do good while you're doing well."

Cox and Robbins Get Just Desserts at Cable Positive Dinner

When Steve Villano began his association with Cable Positive in 2000 it was largely a volunteer organization. "Close to 90% of its revenue came from the annual benefit dinner," he says. "I told the board I'm not comfortable with putting all our eggs in one basket." Today the dinner accounts for 55% of Cable Positive's income.

Cable Positive has grown into a professionally staffed organization, with six full-time employees and a $2.2 million annual budget. In addition, six all-volunteer Cable Positive local chapters have been formed in Denver, New York, Southern California, Washington-Baltimore, Philadelphia and Atlanta.

Cox Communications' brass provided substantial support when one of its then employees, Bobby Amirshahi, led the charge to form the Cable Positive chapter in Atlanta. That's why the March 7 dinner will honor Cox and its retiring president and CEO Jim Robbins. "Jim was very encouraging to a lot of the folks who worked at Cox to help get the chapter organized," Villano says, "and [new Cox president] Pat Esser has shown up at every major Atlanta chapter event."

Cable Positive was launched by cable executives who had lost friends and family to the AIDS epidemic. "They felt that we have this powerful industry with enormous educational resources and the ability to reach millions, so they said, `Let's do something about it,'" says Villano, who worked for New York Governor Mario Cuomo and two major New York medical centers before joining Cable Positive. —P.C.