Phew! Some leaders in the Twin Cities charitable giving and nonprofit communities are breathing a sigh of relief over the news that The St. Paul Cos. and Travelers Property Casualty Corp. are merging.

"I'm totally thrilled," says Mike Temali, executive director of the Neighborhood Development Center in St. Paul, of the plan to keep the merged company's home office and its CEO based here.

"My hope is that they not only keep the headquarters here, but also maintain and build back up their corporate giving."

Temali, like many others at local nonprofits, has been concerned about the impact of mergers and acquisitions on corporate engagement in the Twin Cities.

For decades, the St. Paul-based insurer has been one of the state's most generous companies, by the measures of both giving and employee volunteerism.

In recent years, though, the company's troubles have eaten away at its profits and kept the price of its stock flat. That situation has fueled recurring speculation that The St. Paul could be taken over under unfriendly circumstances.

The weak profit picture also has drained some of the money the company could tap for charitable giving.

Since 1998, when its donations peaked at $16.6 million, they have fallen steadily. The company expects giving this year to be close to its 2002 level of $10.9 million.

Bill King, president of the Minnesota Council on Foundations, thinks the deal could boost the merged company's earnings power and hence spur increased giving both here and in Hartford, Conn., where Travelers is based.

Big mergers have had mixed effects on corporate giving here.

Council records show that two recent mega-deals involving Twin Cities companies have been followed by reduced giving in Minnesota.

One was AlliedSignal's acquisition of then-Minneapolis-based Honeywell. In that deal, the merged company took the Honeywell name, but pitched the combined firms' headquarters tent at AlliedSignal's home office in New Jersey.

The other was the merger of ReliaStar, also based in Minneapolis, into Dutch global financial powerhouse ING.In that case, many of the home office functions here were integrated into ING's headquarters in the Netherlands.

It's been different at Wells Fargo. Minneapolis-based Norwest acquired that bank in 1998, then selected Wells Fargo's San Francisco home as the headquarters site. Yet the company has significantly increased its commitments in Minnesota since 1998.

Carolyn Roby, vice president of the Wells Fargo Foundation Minnesota, says the firm expects to give away around $8.9 million to Minnesota causes this year. That's up from the $6.6 million that Norwest gave away in the state in 1997.

Wells Fargo has 17,500 jobs in Minnesota now, up from Norwest's 13,000 at the time of the merger.

Ron James,a former St. Paul Cos. director who now heads the nonprofit Center for Ethical Business Cultures in Minneapolis, also is optimistic about The St. Paul-Travelers deal.

Two years ago, the center did a study that raised questions about the impact of the late-1990s wave of mergers on corporate involvement here.

One of the concerns the center identified was a lack of pre-merger planning, but James hopes that will be less of an issue in this deal. He notes that the CEO of the merged company, Jay Fishman, is familiar with the cultures of both merger partners, because he has been the top executive at each.

St. Paul Cos. officials are cautious in commenting on the merger's possible impact on giving and volunteerism.

Mary Pickard,vice president of community affairs for the company, cites statistics that show what's at stake for the community.

Sixty percent of the company's donations go to Twin Cities causes.

Nearly 70 of the company's 250 Twin Cities corporate officers sit on boards of nonprofits here. About 500 volunteers donate their time to community activities, many of them in St. Paul.

Pickard says Fishman has stressed the importance of engaging in community affairs.

The company has focused on giving for community development, education and the arts. It has given $30,000 annually to Temali's center for the last 11 years, to help train more than 300 entrepreneurs Minneapolis and St. Paul.

The Local Initiative Support Corp., a nonprofit deeply involved in affordable housing efforts, has received $1.6 million here and at other offices around the country from The St. Paul since its inception in 1987. Paul Williams,the initiative's director here, hails the company for its "strong history of participation."

Jeff Prauer, executive director at Twin Cities nonprofit COMPAS, says the insurer has been extremely supportive in backing his group's advocacy of the arts.

"I have no immediate reason to be worried," says Prauer. "If the headquarters were moving to Travelers, I'd be mighty worried."

Pierson "Sandy" Grieve, the retired Ecolab CEO who left The St. Paul's board earlier this year, expects the giving and volunteerism to be preserved.

But he asks, "Will that be forever?"

Not much about today's corporate world is forever.

© Copyright 2003 Pioneer Press. All rights reserved.