San Francisco Business Times
By Hannah Norman
In January, as Pacific Gas and Electric Co. grappled with its impending bankruptcy filing, the Oakland Museum of California received a notice that California’s largest utility would be dropping its corporate giving for the foreseeable future.
“PG&E has been a great supporter of the museum for many, many years, as far back as my database goes,” said Rehana Abbas, OMCA’s director of philanthropy. “Anytime you lose funding, it’s hard.
“The $38,000 that the museum received from PG&E in 2018 – a little under 10 percent of OMCA’s corporate annual support – was part of almost $28 million in donations the utility contributed that year, much of which landed in its Bay Area backyard. Hundreds of organizations both big and small have reaped the benefit of the utility’s support and partnership over the years, including local food banks, advocacy groups, community centers, arts organizations and more.
On the hook for billions of dollars in wildfire liabilities and facing hundreds of lawsuits following the Camp Fire, which barreled through Butte County last November, killing 86 people and destroying almost 19,000 structures, the company is now in the hands of the bankruptcy court. In June, PG&E reached a $1 billion settlement with the city of Paradise and over a dozen other local public agencies for losses due to the wildfires sparked by its equipment. The utility has also created a $105 million housing assistance fund to aid those displaced.
This year, PG&E said its charitable giving will focus solely on those organizations “helping our communities prepare for and respond to emergencies.” It declined to say how much it will donate.
Meanwhile, PG&E’s philanthropic leadership is hollowing out, with top executives leaving for posts elsewhere. In May, Allen Fernandez Smith, who headed up PG&E’s low-income programs and strategies for five years, joined JPMorgan Chase’s global philanthropy team; a week later, Travis Kiyota, a 17-year PG&E veteran and most recently executive director of the PG&E Foundation, found a new role at East West Bank. Both declined to comment.
The San Francisco-based company’s decades-long philanthropic legacy – and the hole it’s leaving – have not gone unnoticed by the community it has served for well over a century.
“So many groups over the years have counted on PG&E as a key supporter of their nonprofit initiatives, us included,” said Jim Wunderman, president and CEO of the Bay Area Council. “Clearly, the bankruptcy and the public perceptions around PG&E are changing things. For a lot of different organizations, it’s an unfortunate thing.”
For some nonprofits, PG&E’s focus on wildfire resilience and safety has simply meant a realignment of where funding is allocated. Charitable fundraiser United Way Bay Area was in the middle of a massive multiyear, philanthropic corporate gift of $1.5 million from the utility when news of the bankruptcy broke. Only $500,000 into the spending, the nonprofit had no idea whether they’d receive the rest, said Anne Wilson, CEO of United Way Bay Area.
Ultimately, PG&E confirmed the company would fulfill its commitment. “It was a relief,” Wilson said. The utility’s giving within United Way’s network, however, has shifted to focus on emergency services, such as 211, the three-digit number for a 24/7 phone line for community resources.
Ellen LaPointe, CEO of Northern California Grantmakers, noted that dramatic dropoffs in corporate giving are not entirely uncommon. During the 2008 recession, for instance, as companies’ bottom lines took a hit, so too did their charitable contributions. Many corporate philanthropy departments also regularly undergo shifts in strategies or focus areas, she added.
“It underscores how important it is for funders to be thinking about the sustainability of the nonprofits they support,” LaPointe said. “And the importance of diversifying – not being overly dependent on one source.”
The Oakland Museum of California has found new pockets of funding to make budget, with its most recent new corporate partner being Google. Still, Abbas said they’re staying in touch with the utility so that if PG&E begins giving again, the museum can be top of mind.
Yet not all former beneficiaries are so steadfast on keeping up their relationship with the embattled utility, even if it means losing a major funder. The Greenlining Institute – a Berkeley-based research and advocacy group which said it received $195,000 last year from PG&E’s foundation – has taken a number of policy stances holding the state’s utilities to higher safety and accountability standards.
The institute also chided PG&E for its new board of directors roster, saying it doesn’t “represent California’s best interests” when it comes to advancing the state’s climate and clean energy goals.
“The way we see it, nonprofit fundraising is always a challenge,” said Greenlining Institute spokesperson Bruce Mirken. “But more importantly, millions of people and nonprofits rely on PG&E to keep the lights on, and safely.”
All told, the utility’s bankruptcy reorganization is expected to last through 2021.