After 2007 wildfires, corporate philanthropy tests its limits
After 2007 wildfires, corporate philanthropy tests its limits
02 December 2012
published by www.nctimes.com
USA — In the days after after devastating 2007 wildfires sparked by backcountry power lines, utility executives set up a new charity, the Sempra Energy Foundation, intent on helping victims of a conflagration that killed two and burned 1,300 homes in San Diego County.
In the months to follow, the nonprofit foundation funded by Sempra Energy investors distributed $5,158,000 among 1,238 property owners and renters who were left homeless by the fire or lost significant holdings. An additional $60,000 went to a dozen recovery groups that rallied behind people whose home burned.
Five years after the fire, Sempras role as a corporate citizen has been thrust into the spotlight as subsidiary SDG&E seeks to recover at least $369 million from utility customers for fire and legal costs not covered by insurance.
Renee Van Heel received $5,000 from the Sempra foundation after fleeing her uninsured Monta Elena home along with her husband and three school aged sons. The family watched their tract house burn on Good Morning America, and they rebuilt after suing Sempra subsidiary SDG&E and settling out of court.
Shes grateful for the Sempra foundations initial charitable gift — and outraged that utility customers may end up paying for the balance of the recovery.
Every little bit helped. We so appreciated it, said Van Heel, who remains active in a support group for wildfire and disaster victims. It makes no sense that our friends, and people I dont even know, whose homes werent damaged, should have to pay for this.
Van Heel was among more than 800 people who packed a public hearing in April to comment on SDG&E proposal to create a wildfire expense balancing account that would streamline fire cost recovery. Under the most current proposal, investors would pay the first $10 million for each fire and 10 percent of costs thereafter, leaving 90 percent to utility customers. The commission is nearing a decision.
Some commenters offered general praise for SDG&E as a corporate citizen, a commissioner and law judge later wrote, summarizing the public reaction. But a majority of the commenters opposed the Commission including the 2007 costs in the Wildfire Expense Balancing Account as well as the general concept.
Those who criticized the plan included Dean Bielas, who survived the Guejito Fire by jumping in their swimming pool with his wife while their house burned. Another was the son of teacher Victoria Fox and property manager John Bain, who died at their home in the Guejito Fire.
We do not want this rate increase ever, said Michael Bain. It’s never going to
happen.
At the same time, SDG&E won general praise from representatives of the prevention and treatment BURN Institute, from the 211 San Diego health and disaster line, from an umbrella group for 30 volunteer fire departments and from the local American Red Cross, among many others.
Those groups are are steady beneficiaries of the utilitys $5 million in annual charitable giving by SDG&E — independent of the Sempra Energy Foundation — according to disclosures filed with the California Public Utilities Commission.
Frank Ault spoke in support of SDG&Es cost recovery request on behalf of the San Diego Regional Fire and Emergency Services Foundation, an umbrella fundraising group for volunteer fire departments where he serves as board chairman. The foundation received $50,000 in charitable contributions from SDG&E last year.
We were just addressing the fact that they are a good corporate citizen that tries to mitigate the impact of fires regardless of who starts it, said Ault, a retired SDG&E accountant.
Ault said the utility called him in advance of the hearing and asked that he attend. His endorsement of the SDG&E proposal was based on his understanding fire costs would still be reviewed by regulators before charging customers. Critics of the plan say it would rubber stamp costs.
Charitable giving in the immediate aftermath of the fires by the Sempra foundation came with no strings attached and no expectations in return, Sempra Energy spokeswoman Sabra Lattos said.
Recipients signed agreements to spend the funding for purposes related to my needs resulting
from the 2007 wildfires, with no other caveats.
They still could sue San Diego Gas & Electric to recover uninsured losses — and did in many instances.
Such donations are tax deductible, but cannot be written off on a dollar-per-dollar basis, explained Lennard Sonnenberg, a certified public accountant whose San Diego firm caters mainly to nonprofits. Corporate investors are only able recover a percent of the charitable proceeds at tax time roughly equivalent to the businesss corporate tax rate.
Pat Libby, of the Institute for Nonprofit Education and Research at the University of San Diego, said Sempra has a long track record of philanthropy and would not have given to fire victims for tax purposes or just to look good in the eyes of the public.
The deduction is lovely and its important and it does incentivise charitable giving, said Pat Libby, of the Institute for Nonprofit Education and Research at the University of San Diego. But usually it has more to do with a particular corporate culture, that emanates from the CEO or the board room.
Since 2007, the Sempra foundation has moved on to other causes and other disasters, recently donating $50,000 to assist victims of Hurricane Sandy on the East Coast, and offered to match up to $50,000 in contributions from employees. The donations were channeled through the American Red Cross Relief Fund.
Beth Edwards of Ramona, whose family lost a barn, tractor, irrigation system and fencing on their 64 acre ranch when the 2007 fires swept across her property, says she now sees the charitable gift she received from Sempra in 2008 as self-serving.
Edsards said she reached paid her own legal fees in reaching a settlement with SDG&E, but may end up paying the utilitys legal fees through her electricity bill.
I feel like they did their best
to give when it benefited them the most, she said of Sempra Energy and SDG&E. Do they help? Yes. But they help themselves first.
The failure was in the forest areas.Advertisement
Following a 10-year strategy, ACT fire managers have created a mosaic across the landscape of different fuel levels, burning at every opportunity.
But forests have been too wet to burn this spring and the past two summers.
Read more:http://www.canberratimes.com.au/environment/red-alert-for-high-risk-of-fires-20121118-29koa.html#ixzz2CmafUgo3
The failure was in the forest areas.Advertisement
Following a 10-year strategy, ACT fire managers have created a mosaic across the landscape of different fuel levels, burning at every opportunity.
But forests have been too wet to burn this spring and the past two summers.
Read more:http://www.canberratimes.com.au/environment/red-alert-for-high-risk-of-fires-20121118-29koa.html#ixzz2CmafUgo3
The failure was in the forest areas.Advertisement
Following a 10-year strategy, ACT fire managers have created a mosaic across the landscape of different fuel levels, burning at every opportunity.
But forests have been too wet to burn this spring and the past two summers.
Read more:http://www.canberratimes.com.au/environment/red-alert-for-high-risk-of-fires-20121118-29koa.html#ixzz2CmafUgo3
Two summers of unprecedented rain and unusually cool temperatures have left a large fuel load of grass and unburnt forest areas in and around Canberra.
A network of 500 fire trails and strategic burns along the north-west urban edge, heavy grazing and extra grass slashing will create a fortress for the territory which forecasters say faces a higher than average risk this summer.
After a fire-fuelled tornado in January 2003 killed four Canberrans and frightened thousands more, CSIRO fire expert Phil Cheney told the subsequent inquiry the fire’s penetration into urban areas under extreme conditions did not reflect a failure of fuel management on the urban interface.
Read more:http://www.canberratimes.com.au/environment/red-alert-for-high-risk-of-fires-20121118-29koa.html#ixzz2CmaXNjum
The failure was in the forest areas.Advertisement
Following a 10-year strategy, ACT fire managers have created a mosaic across the landscape of different fuel levels, burning at every opportunity.
But forests have been too wet to burn this spring and the past two summers.
