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New Report Reveals Big Changes in Corporate Giving

By Melissa J. Anderson

According to Giving in Numbers, the latest report by the Committee Encouraging Corporate Philanthropy, companies are more and more often utilizing corporate giving campaigns in employee engagement efforts.

Report author Alison Poppe Rose, Manager of Standards and Measurement for the CECP explained, “The competition to attract and retain talented employees has encouraged many more [companies] to offer innovative and meaningful employee-volunteer opportunities, including paid-release time and dynamic pro bono service programs.”

In addition to an uptick in employee engagement efforts, corporate giving has changed significantly since 2007, the beginning of the economic crisis. But, according to the report, companies are employing significantly different strategies when it comes to philanthropy. About equal percentages of companies increased and decreased contributions by more than a quarter (25% and 21% respectively). Last year, more than half of the companies on the CECP’s list of matched-set companies gave more than they did in 2007.

The report was is based on a survey of CECP’s membership of 180 global CEOs and chairmen of companies, which, according to the organization, “account for more than 40% of reported corporate giving in the United States.”

Giving as an Employee Engagement Strategy

The report showed that as of 2010, 94% of the companies polled provided some matching gift programs, and this amounted to 15% of total cash giving. According to the report, 57% of companies increased their cash giving since the previous year – and increases in employee giving and raised caps on matching gift limits are two reasons why.

Interestingly, the industry with the largest percentage of matching gifts out of total giving was the Information Technology sector, at 22%. This field is well known for its job-hopping employees, and matching programs could be seen as a retention effort. The report says, “matching-gift programs can be instrumental in attracting and retaining employees, as they foster goodwill and increase employee engagement.”

On the other hand, the report continues, “matching-gift programs may be considered insufficiently strategic, diverting corporate funding from identified priorities if they are structured as open programs where any 501(c)(3) qualifies for donations.”

The CECP also showed that pro bono service and employee volunteering are popular activities, and advises companies to utilize these programs strategically.

It says, “The appropriate policy for a company should reflect the company’s commitment to volunteerism and the community, but should also take into account the nature of the business and the accepted metrics for time away from a normal paid work day.”

Paid-release time policies were considered one of the most popular volunteering initiatives, but according to the study, there has not been a significant change in the percentage of companies offering this type of program (59%) since last year’s study.

The report explains, “Given the ongoing economic uncertainty, heightened scrutiny on employee and operational efficiency may have dissuaded some companies from instituting new programs allowing paid time off.

Changes in Philanthropy

One of the major changes in philanthropy programs over the past few years is a shift in mindset around what corporate philanthropy is supposed to do for a company. These days, corporate leadership is recognizing the strategic benefits of giving. As Michael Hiltzik wrote in the LA Times last week:

“We’re seeing a whole new approach in corporate responsibility,” Charles Moore, the committee’s executive director, told me. Corporations are integrating philanthropy into their business strategies, say, by supporting charitable programs serving their suppliers, customers or markets — PepsiCo paying to train the Mexican farmers who provide it with its corn syrup or Novartis delivering health education in rural India to residents who might end up buying its drugs.”

The recession has also influenced the way companies are giving – with some companies giving less due to their own financial strains, and others giving more to help communities in need. Similarly fears of a double dip recession and an uncertain jobs outlook are forcing companies to rethink how much they plan to give next year. As Rose wrote, “Companies do not always move in tandem.”

The report explains, “Thus far, since the downturn, companies have taken diverging paths, reflecting different methods for determining corporate priorities and assessing financial performance, community need, grant commitments, and employee and customer expectations.”

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