Darden’s charitable giving has been in decline since 2014

Darden Restaurants’ corporate charitable giving dropped after 2014 as the company fought with activist investors and changed leadership. The company’s top executive, Gene Lee, also is less involved in Central Florida’s major charity organizations.

Despite posting record profits last year, the company has given less of those profits — as a percentage — to charity. Its foundation gave about 0.8 percent during the last two years. Before 2013, it was giving an average of 1.3 percent.

Darden’s giving reflects a national trend of corporations giving a smaller percentage of profits, said Dwight Burlingame, a professor of philanthropy at the University of Indiana. According to research he cited, companies gave about 2.2 percent of all profits to charities in the late 1980s, but that had slipped to less than 1 percent in 2015, the most recent year in his data.

“The decline could be in part to the change in attitude in the organizations,” he said. “If you have a CEO who is focused on quarterly returns, he might not be focused on long-term social responsibility.”

Companies often start cutting philanthropy when profits decline, he said. Darden’s net earnings fell sharply in 2014 and 2015 compared with previous years.

Executives at Darden decide how much to give for the upcoming year based on the previous year’s profits, spokesman Rich Jeffers said. The company has not decided yet how much it plans to give for the upcoming year, he said.

Darden Restaurants Inc. Foundation distributed $1.8 million for the fiscal year 2015 that ended in May 2016, the smallest annual donation total since 1997, and trimmed the number of organizations it supported. In a typical year between 2006 and 2013, the company had given $5 million to $7 million. The foundation gave $2.8 million in 2014 and $3.8 million in 2016, when Darden posted record net income of $482.5 million, according to public filings.

So far in 2017, Darden has announced $1.95 million in charitable giving to Feeding America and other food banks such as Orlando’s Second Harvest. Last week it pledged to give an additional $250,000 to the American Red Cross to help with Hurricane Harvey recovery efforts, the company said.

The only Fortune 500 company headquartered in Orlando, Darden has been one of Central Florida’s largest corporate philanthropic forces for two decades, giving more combined than entities such as Tupperware and SeaWorld and giving to a greater number of local causes. It’s been a major funder of the Dr. Phillips Center for the Performing Arts and the University of Central Florida.

Some other local companies, such as Tupperware and SeaWorld, also have donated less amid financial headwinds. In recent years, Tupperware has given about 0.13 percent of profits away, while SeaWorld has given about 2.5 percent of profits to charity.

Jeffers said the company’s drop in charitable contributions reflects turmoil at the company in 2013 and 2014, as executives waged an unsuccessful battle against activist investor Starboard Value and Jeff Smith. Smith eventually took over as chairman for two years.

“You have to look back to 2013 and 2014 for the company’s performance,” he said. “There was a proxy battle and the company wasn’t performing as well as it had historically.”

The only Fortune 500 company headquartered in Orlando, Darden has nearly 1,700 locations nationwide with Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen and five other brands.

It also has changed its corporate giving philosophy lately, opting to focus on hunger-fighting organizations such as Feed America, aid groups such as the Red Cross and Central Florida charities such as the United Way. It recently pledged $1.7 million to Feed America, $47,000 of which will go to Orlando’s Second Harvest food bank. Formerly, Darden gave to Central Florida charities and allowed restaurants throughout the country to pick charities to support.

Some other local companies have cut charitable giving while financial results were down. Tupperware Brands, based in Kissimmee, cut its charitable spending to the lowest total in a decade in 2015.

SeaWorld’s charitable contributions slipped in 2014 and 2015 compared with the two previous years. But SeaWorld faced its own issues as the documentary Blackfish stirred a public debate over the amusement park company’s treatment of marine animals.

Jeffers said Darden remains committed to supporting charities in Central Florida. “That period [2014 and 2015] reflects the extreme change we are going through as a company,” he said.

Darden’s conflict with Starboard Value in late 2013 and much of 2014 led to the sale of Red Lobster to an investment firm and resulted in the resignation of CEO Clarence Otis. He had served on the boards of local charities such as the YMCA of Central Florida, United Arts of Central Florida and the Boys and Girls Club of America.

Lee serves on the board of directors for First Tee of Central Florida, a youth golf development program. Other Darden leaders serve on local boards such as Second Harvest food bank, United Arts of Central Florida, the regional Boys & Girls Club, the local American Red Cross chapter and economic organizations.

Darden also made donations to the Boys and Girls Club of Central Florida after not donating in 2015, said Mack Reid, chief operations officer for the charity.

“We did get contributions from Darden this year and last year,” he said. “They have been and continue to be one of our top partners. They support our signature fundraiser.”

Burlingame said many corporations cut charity giving during the Great Recession when profits tanked. Charity giving went up slightly as the economy recovered, but the dollar amount and share of profits donated hasn’t returned to pre-recession levels.

“There was one little uptick after a few years after the recession was over, and then corporations didn’t increase giving any further,” Burlingame said.