"The New Face of Philanthropy"

According to Hasbro Chairman Alan Hassenfeld, donors want more than gala dinners -- they demand results

In addition to inheriting Mr. Potato Head and Raggedy Ann, Hasbro Chairman Alan Hassenfeld inherited the rich family philanthropic tradition that has made his company a model for corporate social responsibility. That's why Hassenfeld was asked to deliver the keynote address at the Conference Board's annual Corporate Community Involvement Conference in New York on July 27. After the speech, BusinessWeek's Jessi Hempel and Lauren Gard sat down with him to discuss why philanthropy is important to him and the $3 billion toy company his family has run for three generations. Here are edited excerpts of their conversation:

Q: Where does your commitment to philanthropy originate?


It started with my dad. On his deathbed he wrote us a letter saying he wasn't leaving anything to charity because he believed in living charity. He said, "I have tried to imbue in all of you a sense of caring. I leave it to you."

Q: The economist Milton Friedman said it's not a company's job to give shareholder dollars away to charity. Why don't you agree with him?


I don't know if he ever understood the dynamics of a global company on a global basis. Also, our reputation is one of a company with a heart. We care.

Q: Some American charities have expressed concern that companies are supporting more international initiatives, leaving less for causes here at home. Is this concern valid?


The only reason charities should feel fear is because they are either bloated or overheated and not using their dollars wisely. People have begun to ask charities different types of questions. Here are the questions that are important to me: Is the charity self-sustaining? Who else is giving? Why are salaries so high? Who is on the board of directors? Is the program replicable?

There's a new face of philanthropy. People want to know, "How many cents on a dollar will pass through to the program?" 

Q: Are philanthropists giving charitable dollars wisely?


Sometimes. [But] look at New York and at the dinners, dinners, dinners. They raise a lot of money, but how much do they cost? I abhor using our dollars for dinners. If you need to give for recognition, then you've got a problem.

Q: What should motivate people to give?


I'm a have [as opposed to have-not]. I've lived a certain way, but I've also been to visit refugees camps. When you look into the face of poverty, it's impossible to turn away.

Q: Who will you vote for?


If I voted tomorrow, I'd have to say John Kerry. I like his pick of Edwards.

Q: How do you think corporate social responsibility has changed over the years?


I think that people no longer take responsibility for their actions. Too often, if something goes wrong, you try to point the finger. Well, maybe it's your fault. Look at all these law suits. If there's one thing I would say we really need in this country, it's tort reform. We make Super Soakers [water-gun toys]. A few years back, a kid shot another kid with a Super Soaker. The other kid went up to his house, got a loaded gun, and shot the kid. So who did they sue? Us. Go figure. Tort reform is one of the most important things for America.

Q: Will you give all of your money away in your lifetime?


I really have problems with people stashing their money so that it'll grow and not giving it away in their lifetime. But it's also the job of one generation to pass the baton to the next generation, to be teachers. I might leave it to you, but I would expect you to give it away. I learned this from my greatest role models: my dad and brother. They were special human beings. [When Hassenfeld's father died in 1979, older brother Stephen took the reins. When Stephen died from complications from AIDS a decade later, Alan Hassenfeld stepped up to the top post.]

Q: Are there other companies whose philanthropic practices you admire?


Hewlett-Packard (HPQ ) -- Carly [Fiorina] is doing great philanthropic work. British Petroleum (BP ) for their environmental policies. And Timberland (TBL ). Lots of companies are on the cutting edge, but those companies are really making a difference.

Q: When a company has a bad reputation for social or environmental policies, its philanthropic practices can come off as self-serving. Do you think all corporate money spent in pursuit of philanthropy is indeed philanthropic?


As long as the lives of the people you are targeting are improved, it's philanthropy. If you're making a difference, that's what counts. A lot of these companies were bad, but have been pressured to change.

Q: What should companies be asking themselves about their philanthropic practices?


Is your philanthropy aligned to what your company is doing? Hasbro [focuses] its philanthropy [on] children because that's what our work is.

Edited by Thane Peterson

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