It’s 8:30 a.m. on a Friday in July, and Carol B. Tomé is starting to sweat. The chief financial officer of Home Depot Inc. (HD ) isn’t getting ready to face a firing squad of investors or unveil troubled accounting at the home-improvement giant. Instead, she and 200 other Home Depot employees are helping to build a playground replete with swings, slides, and a jungle gym at a local girls’ club in a hardscrabble neighborhood of Marietta, Ga. Dressed in a white Home Depot T-shirt, a baseball cap, and blue capri jeans, Tomé tightens bolts, while others dump wood chips, mix concrete, and sink posts. The company, together with nonprofit playground specialist KaBOOM!, plans to build 1,000 more such kiddie parks in the next three years — and spend $25 million doing it.

Is this any way to build shareholder value at Home Depot, where the stock has been stuck near $43, down 35% from its all-time high? Chief Executive Robert L. Nardelli and his troops think so. Last year about 50,000 of Home Depot’s 325,000 employees donated 2 million hours to community service. Now, Nardelli is trying to encourage more companies to volunteer at Home Depot’s pace. At his invitation, executives from 24 companies and foundations gathered for five hours at Home Depot’s Atlanta headquarters in May to discuss community service. Attendees included Lawrence R. Johnston of Albertson’s (ABS ), F. Duane Ackerman of BellSouth (BSC ), Gerald Grinstein of Delta Air Lines (DAL ), and William R. McDermott of SAP America (SAP ). On Sept. 1 these CEOs and others will kick off “A Month of Service,” an ambitious plan, developed with community group the Hands-On Network, to deploy corporate volunteers on 2,000 projects across the country, and raise the total number of volunteers by 10%, or 6.4 million, in two years. “We look at this activity with the same eye that we look at business,” Nardelli says.

Yes, companies have long paid lots of money — and lip service — to philanthropy and public service. But as Nardelli’s confab indicates, managers from all parts of American business are increasingly seeing social responsibility as a strategic imperative. In June, General Electric Co. (GE ) released its first “Citizenship Report” as a way for interest groups to assess its social performance from air pollution to volunteer hours. That followed the announcement in May of GE’s ecomagination program, which will invest billions in environmentally friendly technologies. IBM (IBM ) uses its On Demand Community — a 40,000-employee volunteer program — as a way to bring IBM technologies to schools and community centers and plug its brand. Even the legendarily hard-nosed Wal-Mart Stores Inc. (WMT ) has come around to the cause. “We thought we could sit in Bentonville [Ark.], take care of customers, take care of associates — and the world would leave us alone,” CEO Lee Scott said at a recent analyst conference. “It doesn’t work that way anymore.”

BEHOLDEN TO MANY
What’s behind this realization? At the very minimum, it’s clear that companies recognize it takes a robust, sharp public-relations strategy to navigate through the mines of today’s operating environment. Among them: increased regulatory scrutiny; a global, 24-hour news cycle; and communities hostile to scandal-tarred big businesses. But what Nardelli suggests is something deeper. In fact, it’s a growing embrace of so-called stakeholder theory, which posits that companies are beholden not just to stockholders — but also to suppliers, customers, employees, community members, even social activists. That’s quite a departure from the long-dominant notion that corporations’ only duty is to increase profits for shareholders. “Things have become a lot more interdependent,” says Nardelli. “There are a broader range of constituents.”

Such platitudes, of course, make critics cringe. The Nobel prize-winning economist Milton Friedman, 93, casts a long intellectual shadow over the debate. In a seminal 1970 New York Times Magazine article, he declared social initiatives “fundamentally subversive” because they undermine the profit-seeking purpose of public companies and waste shareholders’ money. Even today, Friedman, a senior fellow at Stanford University’s Hoover Institution, rails at the idea that managers elected by shareholders to run companies should spend their profits on social causes. “Adam Smith said in 1776: ‘I have never known much good done by those who profess to trade for the public good.’ It’s a good quote,” says Friedman.

There’s no doubt that a surge in community outreach and do-good deeds is, in large part, a gussied-up bid for good favor. Tarred by a raft of corporate scandals from Enron to WorldCom, social outreach can be a way to regain the high ground. That’s probably one reason corporate giving hit $3.6 billion last year, an all-time high, up from $3.5 billion in 2003, according to philanthropy research group the Foundation Center. Indeed, Nardelli argues that a “dark veil” hangs over big business. It is exacting tangible penalties: Based on its $91 billion market cap, Home Depot was required to shell out an estimated $1 million last year to fund the Public Company Accounting Oversight Board, an outfit created by the Sarbanes-Oxley corporate reform bill to monitor the work of auditors. In effect, say Home Depot executives, all public companies are paying for the sins of a few.

But more than mere public relations appears to be at work here. Companies are being forced to address the concerns of customers, employees, and investors — in order to keep them. Such pressure is why last year Gap Inc. halted relationships with 70 of its overseas factories over alleged labor abuses, and has for the past two years issued a social responsibility report. Or why Nike Inc. is now a world leader in setting safety standards for overseas workers. When the controversy over its sweatshops erupted several years ago, managers mistakenly believed they could afford to ignore the outcry simply by cranking out hip shoes. “It is no longer an option to sit on the sidelines,” says Bradley K. Googins, executive director of The Center for Corporate Citizenship at Boston College.

YOUTHFUL IDEALISM
More important, the calls for change are coming from inside the corporate walls. A new generation of employees is demanding attention to stakeholders and seeking more from their jobs than just 9-to-5 work hours and a steady paycheck. The number of Gen Yers — those born between 1977 and 1994 — in the working world has grown 9.2% since 1999, while the number of Gen X workers remained flat, and baby boomers declined 4.3%, according to Robert Szafran, a sociology professor at Stephen F. Austin State University in Nacogdoches, Tex. As a result, Home Depot and others are finding that burnishing an image as a socially responsible company helps to attract younger workers, at all levels. “One of the things we compete most for in the marketplace is our associates,” says Nardelli. “I’m not sure that was the case [two decades ago].”

Take Sewell Avant. The 25-year-old senior procurement analyst graduated from the Georgia Institute of Technology in 2002. During college, he cleaned churches and did regular social projects with fraternity brothers. Now he’s carrying on that tradition at Home Depot. He took a day off, without pay, to help mix concrete at the playground project in Marietta. His entire department will do more kiddie-park construction on a weekend in August. For Avant, volunteering adds meaning to his day-to-day job. “Employees are trying to marry their work and nonwork lives. If the company gives them a chance to do that, then they’re happier,” says C.B. Bhattacharya, associate professor of marketing at Boston University’s School of Management.

That’s why younger companies are baking the social responsibility concept into their culture — and demanding investors accept the cost. Costco Wholesale Corp. has long offered generous compensation to its workers, to the scorn of Wall Street and the detriment of its stock price. In the 1980s, networking giant Cisco Systems Inc. (CSCO ) opened its first office in East Palo Alto, Calif., a run-down neighborhood amid the prosperity of Silicon Valley. Cisco Chairman John Morgridge worked as “principal for the day” at a school next door. “We’re in business to get results. This is just a different currency,” says Tae Yoo, Cisco’s vice-president for corporate affairs.

Indeed, it has been a rude awakening for companies that have not embraced a more strategic approach to social responsibility. For years Wal-Mart has been a top corporate donor. But as the company’s image was pummeled by labor unions and lawsuits, research showed its fragmented giving generated little goodwill. The reason: Few people could remember exactly what — or whom — Wal-Mart supports. Now, it’s giving its community outreach a sharper focus. “Society has changed,” says Betsy Reithemeyer, executive director of the Wal-Mart Foundation. “If you are the gathering place of the community, then you have a responsibility to it.”

In fact, some executives argue that a company should develop a social responsibility platform — even if it doesn’t add to the bottom line. In 2003, Wayside Cross Ministries, an Aurora (Ill.) shelter for abused women and men, couldn’t obtain enough ground beef for meals. On hamburger days at Wayside, some residents ended up eating buns, lettuce, and tomato — no burger. Then grocery giant Albertson’s, through Jewel, its Midwest grocery chain, launched Fresh Rescue to boost supplies of perishable meat, dairy, and vegetable products for local food banks. The result: Last year, the Northern Illinois Food Bank supplied 386 shelters with 740,000 pounds of meat, double the number from the year before. The payoff for Albertson’s: goodwill — and perhaps a few more shoppers. “We don’t look for any statistics,” says CEO Johnston. “This has to be in the DNA of a company.”

Even evangelists such as Nardelli stop short of saying that companies should divert money from other strategic priorities to support corporate social responsibility. But at corporations like Home Depot and GE, good works are being bred into Big Business. “It’s just the right thing to do,” says Nardelli. Good PR? Sure. Money well spent? The goodwill refund could be in the mail.

By Brian Grow in Atlanta, with Steve Hamm in New York and Louise Lee in San Mateo, Calif.

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How good would it feel if someone just gave you $1,000?

Last fall, Oprah Winfrey thrilled audience members with these words: “You will each go home with $1,000.”

Then she said there was a catch: “You have to spend the money on someone other than your family.”

Winfrey said she wanted them to experience how good it feels to give.

They still applauded, but the smiles looked a little forced.

Yet maybe she did her audience a favor, because even though the audience had to give the money away, it could get back even more than they gave.

Stephen Post explains why in his new book, “Why Good Things Happen to Good People.”

He reveals that new science shows giving — money or time — not only feels just as good as getting, but can actually improve your health.

“Giving is as good for the giver as it is for the receiver. Science says it’s so. We’ll be happier, healthier, and even — odds are — live a little longer if we’re generous,” Post said.

“Public health isn’t just about bugs and staying away from lead. It’s about doing unto others, and at the right dose, science says it’s very good for you,” he said.

Arthur Brooks, author of the new book, “Who Really Cares: The Surprising Truth About Compassionate Conservatism,” also knows a lot about the current research on charity. Brooks said, “There’s evidence that it helps people with their asthma, in cardiovascular disease, weight loss, insomnia. When people have a lot of happiness, they do a lot better in their health as well.”

Helping Others, Healing Themselves

That was true for former heart patients at Duke University Medical Center. They were asked to visit current heart patients — no particular agenda, just to listen and lend support. By doing that, the volunteers had better health after their heart attacks. A similar study at the University of Miami by Dr. Gail Ironson followed HIV patients who volunteered, like Katherine Marshall Scott, who talks to teenagers about avoiding infection, and Stephen Baker, who counsels fellow HIV survivors. These and other HIV patients who helped others had lower stress levels and higher immune resistance. Scott’s disease-fighting cells went up, from 200 to 800. Baker says he could feel how volunteering improved his health. “To get involved with someone else’s problems makes your problems look a lot less,” he said. At least five studies show that seniors who gave tended to live longer, Post said. After senior Fred Dekuyper started volunteering at a school, a small miracle happened. “I used to walk with a cane all the time, and now I don’t need the cane anymore,” he said.

Service Learning

Many high schools require their students to volunteer. It’s called service learning. And oddly, even though the charity is forced, it still brings happy results. Teachers say students who volunteer raise their grades, and get higher SAT scores. Abington High School student Jeff Rohrback said, “After service learning started, I got so involved into it, I started paying attention more, picked up my grades.” So “20/20″ decided to see whether we could find a similar effect. We put an ad on Craigslist recruiting people who were not currently volunteers. We introduced them to Post, and asked them to try it for one week.

But first, Post had them fill out a questionnaire that asked how they felt about life, like how often during the week they felt calm and peaceful. Children for Children, whose mission is to get children involved in giving, agreed to help us, as did the Salvation Army, which has many different programs, from soup kitchens to after-school activities for kids. Then off they went — bringing donated books to children at an elementary school, then reading to the kids and making scarves with the kids. One spent time in a truck handing out food to the poor. All four worked at a Harlem soup kitchen. One week later we had them answer that questionnaire again. This time their answers about how often they felt “calm and peaceful” changed from some of the time to most of the time. Post said, “In fact, just seven days of activity was a kind of a transformation.” One of our volunteers, Diana Sanchez was surprised at how strongly the experiences affected her. “They were so grateful for me doing that, but it was just peas and carrots,” she said. When asked whether it had made her feel good, she said, “It did. It did.” Sanchez also spent time with kids at a Salvation Army after-school program. “Just knowing that after work I was heading over to work with the children, just seeing them smiling — that just made me feel so great,” she said. Researchers call that “the helper’s high.”

The Helpers’ High

“The helper’s high has been measured physically,” Post said. “We know there’s an actual physiological state. It’s quite euphoric.” The helper’s high shows up in MRI brain scans. People who give money show brain activity that’s associated with feel-good chemicals like dopamine — the same brain activity that happens when you receive money. National Institutes of Health neuroscientist Jordan Grafman showed us the brain scans. “Those brain structures that are activated when you get a reward are the same ones that are activated when you give. In fact, they’re activated more,” he told us.

We asked our volunteers after their week of service who had gotten more out of the experience: the people they helped, or they themselves?

Volunteer Daniel Smith didn’t hesitate with his answer. “No brainer. Me, definitely.”

Lelani Clark also felt renewed from her single week of volunteering.

“I just felt energized,” she said. “We were so caught up in this energy of helping that it was like a buzz — like a spiritual buzz.”

Winfrey’s audience members reported that, too. After a week of giving money away, many said they were changed.

Maybe we should call it selfish to help others, because it seems to help the givers more.

“If you want to define selfishness so widely as to include the warm glow that people feel in the aftermath of selflessly giving to others, guess what, we need more of it, not less of it,” Post said.

So try it.

Get out and give your money or your time. You’ll help someone else. … And you’ll feel good, too.

By JOHN STOSSEL and SYLVIA JOHNSON

ABC News