🔒With UTC’s pending merger and HQs relocation, nonprofits eye charitable-giving impact

Since United Technologies Corp.’s surprise announcement earlier this month that it will move its headquarters from Farmington to Greater Boston following a merger with Raytheon 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 Connecticut’s reputation suffer from losing the headquarters of a flagship aerospace 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 philanthropic efforts 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 [donations],” said Henry Zachs, a local philanthropist 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 dollars in additional charitable donations annually.

“Most of the increase in charitable 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 Connecticut. 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 throughout 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 community engagement.”

Funding influence

Indeed, UTC has been generous to Hartford-area nonprofits and the city itself over the years. While a full accounting of its gifts and grantmaking in Connecticut isn’t publicly available, a number of specific gifts have been announced.

In 2017, UTC contributed to a $2 million project 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 presenting sponsor for the FIRST Robotics New England District Competition for high school students for 24 consecutive years.

It’s also helped cash-strapped Hartford keep its cultural events afloat.

In 2017, after the city cut funding for longstanding summer events, UTC established 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 funding for everything from the city’s annual Riverfront Fireworks in July to the Hartford 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 nonprofit 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-entrepreneurship center, concurs that some local 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 problems,” 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 relocates, you look at what’s left behind,” said Joe Brennan, president of the Connecticut Business & Industry Association. “In this case, UTC has about 19,000 jobs in Connecticut, so a major presence here, a lot of production here, a big supply 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 philanthropic 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 nonprofits 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.”