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NIKE, Inc, achieves 3 percent community investment target

Beaverton, OR (14 September, 2005) – NIKE, Inc. reported today that in its fiscal year ending May 31, 2005, it contributed $46.1 million in cash, product and in-kind services to non-profit organizations and community partners around the world, meeting or exceeding its annual target of investing three percent of the company’s pre-tax earnings for the fifth consecutive year. The total contribution represents 3.2 percent of the company’s prior fiscal year 2004 pre-tax profit and served more than 4,500 charitable organizations.

“We believe that focusing our community investments will pay the largest dividends not only to the charitable organizations that are recipients of Nike’s philanthropy, but also, more importantly, to the individuals whose lives are improved through their work,” said Hannah Jones, Nike’s vice president of Corporate Responsibility. “Our approach continues to evolve, but one thing remains clear: we are at our best when our investments reflect both the innovation and inspiration of the brand as well as the needs of the world we live in.”

Nike’s community investment efforts are directed toward two principal platforms – creating access to sport and physical activity as a fundamental right for young people and helping address the challenges of globalization faced by women and girls. Nike invested $15.1 million, or nearly one third, of its community efforts this year in creating access to sport and physical activity as a fundamental right for young people.

Nike’s $46.1 million in contributions consisted of $22.6 million in cash grants, or 49 percent of the donations, and $23.5 million in product and in-kind services, or 51 percent of the overall investment. Compared to fiscal year 2004 giving, cash grants increased six percent based on the total giving number. Additionally, of the total giving amount for FY05, 46 percent, or $21.4 million was donated to organizations outside the U.S. Right To Sport and Physical Activity Around the world, the issue of access and right to sport and physical activity grows, with distinct regional dilemmas that Nike aims to address through targeted community investments with strategic partners. The similarities for kids worldwide who are impacted by lack of access center on economic and social factors, although each region’s challenges are unique. In fiscal year 2005, NikeGO, the company’s long-term commitment and global program to provide young people with the access to sport and physical activity, launched two significant partnerships in two very different regions.

NikeGO Head Start In the United States, the trend of youth inactivity has been increasing at an alarming rate. To address this challenge, NikeGO’s mission in the United States is to help increase physical activity of kids, offering them the support and motivation to become physically active, stay healthy and have fun. NikeGO, a long-term, multi-stakeholder initiative to address youth inactivity, has partnered with organizations whose expertise brings greater impact to the programs we build for inactive kids and the parents, teachers and coaches who influence their behavior. NikeGO’s partnerships and resulting programs focus on reaching kids in school, out of school, and through advocacy initiatives.

In March 2004, NikeGO announced a new partnership with the National Head Start Association to bring NikeGO Head Start – a first-of-its-kind early childhood physical activity program designed for preschool children and their families – to Head Start sites throughout the country. SPARK (Sports, Play and Active Recreation for Kids), a NikeGO partner, designed custom curriculum for preschoolers ages 3-5 and led the trainings for Head Start teachers. This past year, NikeGO Head Start piloted at 80 different program sites in eight different cities (Anchorage, Los Angeles, Memphis, Orlando, Washington D.C., Portland, Chicago and New York), initially training 320 teachers serving an estimated 30,000 Head Start preschoolers.

NikeGO in Europe, Middle East and Africa - Together for Girls In 2004, NikeGO in the Europe, Middle East and Africa region and the United Nation’s High Commissioner for Refugees (UNHCR) partnered to create “Together for Girls.” This program combines UNHCR’s expertise in working with and providing services for refugees in camps in Dadaab, Kenya with Nike’s experience in inspiring socially excluded young people through sport and physical activity. In the first year of the partnership, additional teachers, sport and youth personnel were hired and trained, new classrooms were built, girl-friendly latrines were constructed and learning materials, including books, pencils and paper, were distributed. Nike is committed to “Together for Girls” until 2007, with plans to bring other partners to the table and invest significantly in the program, through product and cash donations.

Addressing the Challenges of Globalization: The Nike Foundation Nike’s second key area of focus for global community investment is addressing the challenges of globalization, specifically those faced by women and girls. In past fiscal years, Nike’s giving in this area has been primarily focused on micro-enterprise programs in countries where Nike has a significant contract manufacturing presence. Going forward, this focus area will be primarily achieved through the work of the Nike Foundation.

In March of 2004, NIKE, Inc. announced the new focus and direction of the Nike Foundation, a 501(c)(3) non-profit organization. The Nike Foundation provides grants and leverages Nike’s voice and global reach to help improve the lives and well-being of adolescent girls in the developing world as a critical link to achieving two of the United Nations Millennium Development Goals (MDGs) – poverty alleviation and gender equality. NIKE, Inc. directs a portion of Nike’s annual giving target of three percent to the Foundation to support its mission. The Foundation plans to announce its latest round of grants from FY05 later this fall, including projects with partners in key countries of focus including Brazil, China, Ethiopia and Zambia.

Tsunami Aid Immediately after the devastating tsunami of December 2004, global non-governmental organizations needed cash to help support relief efforts. Nike and the Nike Foundation contributed $1 million ($250,000 each) to four international relief agencies—Mercy Corps, World Vision, International Federation of Red Cross and Red Crescent Societies and Northwest Medical Teams. Nike employees around the world contributed to the relief effort too, donating cash, time and product to the relief agencies identified with Nike’s initial cash contribution and others (Nike continues to match U.S.-based employee donations of cash dollar-for-dollar through the Nike Matching Gift Program.) In addition, contract factories and their employees manufacturing Nike branded products responded generously with donations of cash, product and time. Nike also secured available product for immediate donation and distribution to various relief organizations, and warehouse space across Southeast Asia was offered for use by on-the-ground relief organizations for storage of clothing, food supplies and medicine.

Live Strong Campaign As a tribute to Lance Armstrong's inspirational fight against cancer and his historic attempt at a sixth Tour de France win last year, the Lance Armstrong Foundation (LAF) and Nike launched the Wear Yellow Live Strong campaign in 2004 with a $1 million donation from Nike. The goal was to help raise an additional $5 million through the sale of yellow wristbands engraved with Lance’s mantra: Live Strong. The number of bands sold continues to grow, far surpassing initial projections and continuing to inspire people around the world. To date, after Lance’s historic seventh Tour win, approximately 55 million wristbands have been sold at $1 a piece, with all proceeds supporting the LAF's advocacy, education, public health and research programs to enhance the quality of life for young cancer survivors and their families.

Employee Involvement Nike is fueled by the passion of its employees, and encourages their active engagement in communities. In the U.S. Nike matches employee contributions to any eligible organization recognized by the IRS as a tax-exempt public charity under Section 501(C)3 of the IRS code. The minimum contribution matched is $25. The maximum total match per employee to all charitable organizations per fiscal year is $5,000 including cash, payroll deductions and volunteer hours. Cash contributions are matched dollar-for-dollar, while volunteer hours are matched at $10 per hour after the first 25 hours. Nike also has an Employee Community Giving campaign in the U.S. where employees can select a charitable organization and have a portion allotted each pay period to go to that organization, with the Nike match to follow. As a result, in FY05, Nike employee giving resulted in $3.6 million toward communities – an increase of 17 percent over fiscal year 2004. Nike matched employee cash contributions of $2.8 and approximately 80,000 employee hours for $800,000.

Nike also launched an employee involvement program in the Europe, Middle East and Africa region called Sport4ACause.

NIKE, Inc. Giving History ($ millions

NIKE, Inc. based in Beaverton, Oregon is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly owned Nike subsidiaries include Converse Inc., which designs, markets and distributes athletic footwear, apparel and accessories; Bauer NIKE Hockey Inc., a leading designer and distributor of hockey equipment; Cole Haan, a leading designer and marketer of luxury shoes, handbags, accessories and coats; Hurley International LLC, which designs, markets and distributes action sports and youth lifestyle footwear, apparel and accessories and Exeter Brands Group LLC, which designs and markets athletic footwear and apparel for the value retail channel.

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