At Cisco, we believe that technology, and the access to information and communication that result from advances in technology, are the greatest equalizers the world has ever known. This belief is the foundation of our efforts as investors in the society in which we live, work, and play.
Cisco makes contributions in three primary ways:
Grants are made centrally by Cisco Corporate Philanthropy and regionally by Civic Councils, which are employee-led bodies that engage with communities to identify suitable projects that can benefit from Cisco's resources and expertise. Corporate grants are used to fund strategic or international programs. Regional grants focus on local community projects and often include employee volunteerism. Cisco employees manage 20 Civic Councils worldwide.
Employee involvement is a core element in Cisco philanthropy. In fact, the company's culture of giving back began when staff literally leaped the fence of a grade school located near headquarters to find out how they could help. Cisco employees continue to donate their time to charities and good causes in their local communities.
Value of Donations
At the close of FY2005, the total value of the annual Cisco Systems Foundation endowment was more than US$100 million. Cisco Systems Foundation is a separate, private, nonprofit organization (501c3). The foundation is audited annually and a copy of its tax returns (990PF) is posted on the Cisco Foundation Website.
Cisco corporate contributions include product donations, loaned executives, and cash grants. Total Cisco corporate contributions (FY2002-FY2005), shown in the chart below, represent an average giving trend for Cisco. Figures for FY2002 represent extraordinary expenditures that resulted from the terrorist attacks of September 11, 2001 and from the establishment of an Academic Research and Technology Donor-Advised fund.
Total Donations 2002-2005
*Note: Contributions as a percentage of EBIT are not calculated for FY2002 since the previous year's EBIT was reported as a loss ($1,014 million).
Product donations are valued at "fair market value," which is approximately the price a customer would normally pay for Cisco products and for Cisco service, including discounts.
The relative decline in funds over time reflects Cisco's evolution from a transactional to a strategic philanthropic model. Through the development of multisector partnerships with private, public, and nonprofit organizations, we have reduced costs and improved the return on our social and economic investment strategy.
Response to the Asian Tsunami
In addition to key product donations, Cisco and its employees donated over US$5 million in cash between December 2004 and the end of July 2005 in response to the tsunami disaster in Southeast Asia. This included $3.5 million in employee contributions and matching funds from the Cisco Foundation. Cisco worked with nongovernmental organizations, including the International Red Cross, and governmental agencies to decide who received the donations. In addition, Cisco employees across the region volunteered their time to help set up IP and wireless communications systems in affected areas, which returned much-needed communications capabilities to these areas.
