The last time I wrote a column for the Los Angeles Business Journal it was 2000.  At the time I was hoping to inspire new members to join the Downtown Los Angeles Rotary Club, which was experiencing a membership decline largely caused by corporate headquarters’ flight from California.  

Being a member of the Rotary in the 1980s and 1990s was a very gratifying experience, as it afforded our members a chance to do much good in the community.  However, the club continued to spiral downward from 700 members to hundreds fewer. Unfortunately, the column I authored then did not seem to stimulate new membership interest.  

In the club’s early years, the membership was represented by the C-level executives of the major companies in the Los Angeles area. Rotary was the place to meet corporate leaders as well as high-level elected officials and to listen to world-class speakers. It was also a conduit for substantial charitable giving from its foundation.

Today, corporate flight has hurt not only the Los Angeles business sector; it has also negatively impacted local charities. When corporations pack up and move out of state, they take their charitable dollars with them. A recent survey of local philanthropies found a 30% decline in local contributions when companies leave a state like California. Not only does corporate charitable support decrease, but so do personal contributions from company executives and employees when the headquarters moves to the new location.

After two large automakers moved from Southern California to Texas and the Midwest, I did a rough comparison of their foundation tax reports over several years. It troubled me that several million dollars in charitable giving had almost ceased in the Los Angeles area – donations to underserved local neighborhoods were gone.  

The relocated corporations must realize that we not only are a leading market for autos and petroleum products but also have our share of troubled neighborhoods.   Californians in general, and Angelenos in particular, buy millions of cars and generate sizable revenues for these companies.  

For 30 years I have worked as a financial executive in the for-profit world of Fortune 50 corporations and 30 years as a chief executive in the nonprofit sector.  I’ve been around, and I get it: red tape, environmental regulations and constraints and burdensome laws and fees add to the cost of doing business here, and in some cases can even drive companies out of California. But on the other hand, our state generates major revenues for these corporations. Locating a business in this consumer paradise is not free.  

I’ve struggled to discover a way to bring corporate charitable dollars back to our underserved communities. Adding yet more taxes or fees would only exacerbate the problem. What incentives can we proffer to encourage corporate giving and investment in our neglected communities? I don’t have the answers, but I hope there’s a brilliant person out there who does.  

I do know a generous business leader who took his current position in an out-of-state company with the guarantee that it would support his charities in California.  Our community needs more such corporate citizenship with executives who think about the big picture. 

The Rev. Greg Boyle, founder of nonprofits Homeboy and Homegirl Industries, points out that providing a job to the many “homies” he serves gives former gang members a new chance at life. He is famous for his motto: “Nothing stops a bullet like a job.” His former gangbangers become consumers and contributors to society. Charities like his need financial support, but corporate flight makes that difficult to sustain.

Financial support is of the essence. But when a corporation leaves the area, it takes its financial support, pro bono services and volunteerism with it. The community loses. Although critically important to nonprofits, volunteer time and pro bono advice cannot sustain charitable programs.  

I have considered no longer buying products produced by companies that have moved out of state and that subsequently have stopped donating to our communities. I have tried to raise the awareness of local government leaders that many of the services purchased by California public institutions are headquartered out of state. How about giving incentives for those companies that continue to reside in our state and that invest here? 

Consumers are increasingly aware of the quality and extent of corporate charitable support. A Cone/Roper study back in 1999 found that consumers would pay more for a product when they were aware that the company was cause-branded with a reputable charity. Maybe a charity campaign needs to be conducted from the consumer side: buy only from companies that show positive support of our local community.  

Ken Martinet is president and chief executive of the Catholic Big Brothers Big Sisters of Los Angeles County.