Hartford Business Journal

8 Hartford Business Journal • June 24, 2019 • www.HartfordBusiness.com By Sean Teehan steehan@hartfordbusiness.com S ince United Technologies Corp.'s surprise announce- ment earlier this month that it will move its headquarters from Farmington to Greater Boston following a merger with Ray- theon Co., concerns have abounded. Which shareholders stand to benefit most? Will the merger create a defense manufacturing powerhouse too big for competition? And how badly will Con- necticut's reputation suffer from losing the headquarters of a flagship aero- space manufacturer that's been based here since the 1930s? But another aspect observers say Connecticut's nonprofits should keep their eyes on is how the pending merger could affect charitable giving from UTC, which, according to a recent social- impact report the company published, has invested $200 million in Connecti- cut communities over the past five years and whose employees gave more than $14 million in donations and matching grants during the same time period. "I think you're going to see a dropoff in corporate as well as individual [dona- tions]," said Henry Zachs, a local philan- thropist and telecom entrepreneur. There is some evidence that a corporate headquarters location does impact charitable giving. A 2008 study by economists at UCLA Berkeley and Cornell found that regions that retain or attract a major corporate headquarters see tens of millions of dol- lars in additional charitable dona- tions annually. "Most of the in- crease in charita- ble contributions arises from the number of highly- compensated individuals in a city, rather than through direct donations by the corporations themselves," the report said. While UTC is planning to move its headquarters to Greater Boston once its merger is approved and finalized, the company has pledged to keep about 19,000 employees in Connecticut, which has left some to believe it will continue to be a major philanthropic source in Greater Hartford. However, approximately 100 senior- level and well-paid executives — some of whom sit or have sat on local nonprofit boards — would work in Massachusetts as part of the deal. In an email, UTC spokesperson Michele Quintaglie said the merger with Raytheon won't affect UTC's philanthropic footprint in Connecti- cut. She said the company's focus for charitable giving in the state remains twofold: supporting education and workforce-development programs, and underwriting local cultural and social welfare organizations. "For decades, we have contributed tens of millions of dollars each and every year to local nonprofits through- out the state. We do this, first, because it is the right thing to do," Quintaglie said. "Nothing about this proposed merger changes our motivation for sustaining our considerable commu- nity engagement." Funding influence Indeed, UTC has been generous to Hartford-area nonprofits and the city itself over the years. While a full ac- counting of its gifts and grantmaking in Connecticut isn't publicly available, a number of specific gifts have been announced. In 2017, UTC gave $2 million to help renovate the New England Air Museum in Windsor Locks. Two years earlier, it donated $1.5 million to help build and staff a new family resource center at Connecticut Children's Medical Center. The company has been the present- ing sponsor for the FIRST Robotics New England District Competition for high school students for 24 consecutive years. It's also helped cash-strapped Hart- ford keep its cultural events afloat. In 2017, after the city cut funding for longstanding summer events, UTC es- tablished its "Summer in the City" grant to the Greater Hartford Arts Council. The grant, the size of which has not been publicly disclosed, now provides fund- ing for everything from the city's annual Riverfront Fireworks in July to the Hart- ford Capital City PrideFest in September. UTC has been a good corporate citizen, said Zachs. So, he hopes any impact on giving will fall well short of devastating to local charities. "(But) every dollar is significant," said Zachs, who sits on almost 10 non- profit boards in the state. Bob Patricelli, a philanthropist and longtime Connecticut healthcare entrepreneur who donated $2 million to his alma mater Wesleyan University in 2011 to establish a social-entrepre- neurship center, concurs that some lo- cal charitable giving is likely to follow UTC's senior leaders. However, he sees a larger community impact beyond financial donations from the potential migration of top senior- level talent who will be relocating their combined brainpower elsewhere. "I see the bigger impacts as the lower collective clout of the business community and the lower corporate financial and advocacy commitment to solving local and regional prob- lems," said Patricelli, the recent former co-chair of the Commission on Fiscal Stability and Economic Growth, which made policy recommendations aimed at growing the state economy. Major presence Not everyone thinks UTC's departure will have a major impact on charitable giving, especially since the company will still have a large presence here. "If a [company's] headquarters relo- cates, you look at what's left behind," said Joe Brennan, president of the Con- necticut Business & Industry Associa- tion. "In this case, UTC has about 19,000 jobs in Connecticut, so a major presence here, a lot of production here, a big sup- ply chain here; so my guess is they still stay pretty active in the Connecticut community." Joseph J. McGee, vice president of public policy and programs at the Business Council of Fairfield County, said he too doubts UTC's philanthrop- ic footprint will shrink much after its headquarters move. Fairfield County has seen its share of Fortune 500 companies relocate, most prominently General Electric's move from Fairfield to Boston in 2016. That uprooting cost some local non- profits funding, McGee said, so it did impact the local economy, though the overall effect wasn't devastating. The good news for Greater Hartford, McGee added, is that UTC's move will be much less drastic than GE's. "It's 100 executives out of a labor force of 20,000," McGee said. "You hate to see them go, but it's 100 people." Hartford Steel Symphony provided entertainment during the recent kickoff celebration of Hartford's "Summer in the City" event series, which includes riverfront fireworks and numerous other cultural events funded by United Technologies Corp. Philanthropic Fallout With UTC's pending merger and HQs relocation, nonprofits eye charitable-giving impact Among the events that UTC supports financially is Hartford's Riverfront Dragon Boat & Asian Festival. PHOTO | CONTRIBUTED PHOTO | CONTRIBUTED

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