One Viewpoint on Corporate Aid to Education

At a time when the future of education is one of the most important problems facing the country, it is reassuring to find American industry assuming its responsibilities. Here General Electric tells how the development of a sound philosophy can lead to a broad program of aid to education that goes beyond philanthropy, and works to the advantage of both donor and recipient.


BY NOW, most responsible people in industry are convinced that, both as individuals and as corporate citizens, they have some obligation to help American education solve its growing problems. Scarcely a week goes by without a high level conference, somewhere, taking up the question of corporate support of education. This question, today, is seldom phrased “should we or shouldn’t we?" but rather “how much and on what basis?”

The result has been a growing number of corporate aid-to-education programs. Some are amplifications of older activities. Only in this sixth decade of the century has there been much research, analysis, and thinking through to a logical and consistent philosophy of corporate support of education.

Yet today, many programs are being built on a sound theory of the case. These programs are all different; they reflect the individualities of the sponsoring companies. This variety is good. As some prove workable and others not, there is nothing but corporate pride to prevent the borrowing and copying of successful patterns. This is the American way to progress; it avoids the rigidity of frozen compromise which would inevitably characterize a single federal policy.

Here on these pages is an attempt to present the philosophy evolved by one company—General Electric—and show how it has been used to organize a wide variety of almost unrelated projects, and to create new ones, to produce a comprehensive program geared to education’s needs and appropriate to a business like General Electric.

In Search of a Philosophy

Some wag has said that there are no problems in education that would not vanish at the wave of some tens of millions—or maybe it’s billions— of unrestricted dollars from industry. This viewpoint overlooks several important facts. Irresponsible money never solved anything. There are moral responsibilities in giving away money, just as there are in earning it. The dollars involved are originally business dollars; they must either come out of capital or be added to the cost of products or services. Therefore they should be invested, rather than given, for businesslike objectives.

At General Electric this is interpreted to mean the careful, planned use of the shareowners’ money in a way that benefits both parties to the transaction. The attempt has been to devise programs which help to attain three broad objectives that can be demonstrably related to the company’s long-range well-being:

1. Developing new knowledge through research and inspired, competent teaching.

2. Insuring an adequate supply of educated manpower for the Company, for industry, and for the economy generally.

3. Maintaining and improving the eco nomic, social, and political climate necessary to the continued existence and progress of competitive free enterprise.

In practice, these objectives introduce few limitations. The programs could be, and often are, the same ones erected from purely philanthropic motives. Yet philanthropy is not the ruling concept. We do not believe it is enough simply to generate a warm, generous feeling around the vague locality of the corporate heart.

Some Working Principles

Several working principles have evolved from studies of educational needs. One is expressed by the search for a “multiplication factor" in any programs devised for financial assistance. For example, in the choice between helping to pay a faculty member a higher salary, or assisting a student with a scholarship, the advantage lies clearly with the professor, whose improved teaching can influence a whole generation of students. Similarly, between an institution and an individual, the benefit to the institution is passed on to many. Practically all the General Electric programs in force today have this multiplication factor, in some degree, built in.

Another working principle derives from the belief that education is a good investment for the recipient. Therefore, so far as he is able, and as soon as he can, he should pay his way. This accounts for the recent institution of a loan plan for employees and their children.

A third working principle calls for a genuine belief in education and the established educational institutions. Not that these are perfect, or sacrosanct and above criticism. But they exist; they have produced the general level of education we have at present; they offer the only practical and foreseeable agencies for continuation and improvement. Therefore, in our belief, it behooves those who wish to help, to work through these existing channels.

The Education Public

In reducing principles to practice, what aspects of education are the legitimate concern of a national company like General Electric?

The Company has plants in more than 100 communities in 31 states. It has upwards of 380,000 shareowners. It has about 280,000 employees, including close to 30,000 college graduates drawn from 760 institutions.

Obviously regional considerations are ruled out; there can be no truly “local” or “favorite” colleges. Neither is there any point in setting up arbitrary distinctions as between private and tax-supported institutions. The majority of Americans start their education in tax-supported public schools, and the colleges, whatever their internal structure, have similar aims and achieve almost identical results.

All levels of education, from elementary through graduate school, make important contributions. And, in the development of assistance programs, all regularly constituted educational institutions that meet accepted standards should be given equal consideration. Choices, when they have to be made, should so far as possible avoid preconceptions, prejudice, and the pressures of special pleading.

The Current Programs

The aid-to-education programs instituted by General Electric and now in effect fall into two distinct categories. One is direct financial or equivalent aid to institutions or individuals. The other involves non-financial considerations —usually in terms of information, teaching aids, guidance helps, and co-operation in support of basic educational objectives.

Most of these programs, taken individually, are not the largest of their kind supported by American industry. Some are new; some date back nearly a half-century. Because they are under constant study, some will probably be drastically altered. Obvious gaps will be filled. They are listed and briefly described below to show how it is possible to meet a wide variety of educational needs and at the same time concentrate on not more than three fundamental objectives.


Most of the programs of direct assistance are now financed by the General Electric Educational and Charitable Fund, an independent charitable trust, directed by Trustees and administered for the Trustees of the Fund by the Company’s Educational Relations component. Any company’s earnings are subject to fluctuations with the times; yet effective programs of educational support depend on continuity. Therefore, the creation of the Fund and the periodic transfer of assets from earnings to the Fund’s capital are insurance against interruption of support of important educational activities.

Corporate Alumnus Program

This program was instituted January 1, 1955; its provisions and objectives were described in a message similar to this one in the January 1955 issue of this magazine. Under this Corporate Alumnus concept, the General Electric Educational and Charitable Fund offers to match the gifts of General Electric employees to the fouryear accredited colleges they attended. The offer is made to employees with at least one year’s service with the Company; the limit on individual gifts that will be matched in any year is $2,000.

Over the first two-year period of the program, 427 colleges received a total of $764,760—half from General Electric alumni and half from the fund. Incentives of the program significantly increased the average size of alumni gifts; colleges were encouraged to step up their solicitation of their graduates. More than thirty other companies and foundations have now instituted some form of gift-matching program.

Fellowships for Graduate Study

At the present time, 88 fellowships a year are being financed by the Educational and Charitable Fund for pre-doctoral graduate study. Of these, 34 are competitive; 54 are assigned to selected universities and the recipients are chosen by the institutions. The fields of study, while specified, are widely various and embrace most of the areas of advanced knowledge. In addition to substantial stipends to the individual Fellows, grants are made to the institutions in support of the educational costs incurred. A recent survey of this program, which dates back to 1923, shows that nearly two-thirds of the Fellows have subsequently gone into teaching.

Loans for Undergraduate Study

This program, beginning in 1957-58, authorizes the components of the Company to make loans up to $1,000 a year to employees for their own or their children’s higher education. In the first year, almost 300 loans were locally negotiated, totaling just over $200,000. The majority were for first-year students, for whom most college-operated loan programs are not available.

Scholarship Awards

For the first time, in 1957, the Educational and Charitable Fund Trustees made scholarship awards of $650 to 50 of the applicants for undergraduate loans, with accompanying grants of $350 to the colleges attended. Nominations were made by the Company components, based on scholastic standing, character, and with special emphasis on financial need. This program, incidentally, is the only one of a strictly scholarship nature. Neither the Company nor the Fund provides any scholarships for students not employeeconnected.

Summer High School Teacher Fellowships

For six weeks each summer, the Educational and Charitable Fund finances, through six universities, graduate-level programs of study for 300 secondary-school teachers of chemistry, physics, and mathematics. The purpose is to allow these teachers to refresh and update their knowledge in the fields they teach, and to see first-hand how these subjects are applied in the industrial world. Selection of applicants and the academic program are in the hands of the universities. This activity began with a single program for 50 teachers in 1945. Since then, 1,900 teachers have had an opportunity, through improved teaching since their Fellowship experience, to influence an estimated 750,000 pupils— perhaps the best example of the “multiplication principle” in action.

Equipment Assistance

General Electric makes a number of products suitable for instructional use, usually in college engineering and science laboratories. For many years these have been made available to educational institutions at what is essentially cost. In special cases, some additional financial assistance is provided, totaling in a typical year some hundreds of thousands of dollars.

Special Grants

There are some educational projects which, though they do not fall logically into continuing programs, contribute quite directly to the overall objectives. In 1956, modest grants were made by the Fund to five medium-sized colleges, as part of a study of the relationships between industry and the liberal-arts institutions. In 1957, the physics departments of 20 colleges received grants of $2,500 each—again to determine how a modest increment in budget can strengthen the work of a single department. Another type of grant, on a few occasions, has enabled educators to re-evaluate curriculum needs in important disciplines. And grants have been made to institutions experimenting with possible improvements in teaching. In each case, the benefits of the knowledge gained went further than the benefits to the individual recipients.


The traditional pattern of education in America, up through high school, is the public school, with control and support a local responsibility. The independence bred of this local responsibility is too important to be imperiled by outside influence. To attempt to offer financial support would be impractical, and perhaps impertinent.

Fortunately, there are contributions that an industry can make, with complete propriety, that may transcend monetary support in ultimate value. The first and obvious thing is to find ways to help the individual teachers do their teaching and counseling job better.

Subject-matter Information

Because General Electric is a company built on scientific research and engineering application, it is a natural source of knowledge too new to have reached the textbooks. This presents an opportunity and an obligation. So secondary school teachers are offered posters and booklets dealing with such current subjects as principles of electricity, jet propulsion, atomic power. A “comics" series of booklets is most popular. Since 1945 science and mathematics teachers have requested over 65 million copies for use in classes. They report increased interest in their subjects as a result.

Guidance Information

If today’s trend continues, more and more pupils will find their careers in industry. They will get better jobs and be better employees if they know how to prepare themselves and take full advantage of educational opportunities. Messages entitled “Why Study Math?”, “Why Study English?”, “Why Stick To Your Studies?", “Start Planning Now For Your Career", embodying General Electric experience, have been offered to teachers and guidance counselors.

These messages, which reinforce the teachers’ advice with authority of a large company, have been widely used. The total of all school publications, both subject-matter and guidance, requested by teachers since 1945 exceeds 100 million copies.

Research and New Knowledge

One major obligation of industry to education is a genuine attempt to understand its objectives and problems. Paying out money without this understanding is not only poor business, it is an insult to the recipients, it says, in effect: “Please take this check and go away; don’t bother me.”There are times when studying the business use of the education product, applying what is learned, and feeding the results back to the educators can be of greater value than dollar support.

A recent report on what 13,500 college-graduate employees of General Electric think of their college courses has been used by curriculum groups in the colleges. A study of problems to be faced by colleges in the next twenty years will be released soon, summarizing the predictions of 110 college presidents. A survey of opinions of undergraduates of twenty colleges on such things as attitudes toward politics, awarding of scholarships, and going into debt, is being tabulated. Information of this kind, difficult or impossible for individual institutions to obtain, and often the result of active co-operation with educational associations, is made available both to educators and to other industries.


To the people in General Electric who are administering these educational programs, some things have become evident. The problems of education are real, not illusory, and are important enough to industry to merit serious attention. The number of things which can be done in support of education-all good and worthy in themselves—is infinite. Some basic philosophy must be developed as a guide. It is then possible to reconcile the needs of education and the legitimate interests of an industrial company, and develop programs involving a quid pro quo that makes no demands on educational freedom.

[Additional copies of “One Viewpoint on Corporate Aid to Educationare available from General Electric Company, One River Road, Schenectady 5, New York. ]