+1-646-6882318
nicki@theglasshammer.com

Three Reasons Corporate Giving is Up This Year

By Melissa J. Anderson

According to a recent report by the Center Encouraging Corporate Philanthropy, the majority of corporations gave more in 2010 than in 2009. In the organization’s Giving in Numbers 2010 report, the organization revealed that total giving was up by almost 18%, with 65% of companies reporting higher donations.

Alison Rose, Manager of Standards and Measurement at CECP, said [PDF]:

“In looking at our four year matched set, we were struck by the divergent paths of companies from pre-downturn giving levels: in 2010, a quarter of companies increased giving by 25% or more than 2007 levels, while 21% of companies reduced contributions by 25% or more. This shows that while some companies have been able to surpass pre-crisis levels, others are still in a period of rebuilding.”

There are several reasons that companies are digging deeper this year. Here are few of the big ones.

1. Consumers Hurting Post-Recession

According to the study, more than half of the increases came from pharmaceutical companies. And while some of those donations came from the companies’ signature investments, a large portion came from Patient Assistance Programs, in which pharma companies donate medicine to needy individuals.

Much of this giving arose from consumer need – for example, donations of costly medicines. Rose explained, “One of the reasons we have seen for increased giving across the board has been increased funding to serve basic needs in communities where companies are working, and pharmaceutical companies in particular are in a really important position to do so.”

2. Profits are Up

Even though consumers may be hurting, corporate profits are up this year. According to the CECP, 70% of the companies surveyed reported profit increases, and 50% reported increases of 10% or more.

Companies have a bit more money this year to invest in communities and the environment. The CECP explained:

Among other reasons for increased contributions, giving professionals reported additional funding for disaster relief and recovery efforts for the major disasters of 2010 (including the earthquake in Haiti and the Pakistan floods), heightened contributions for signature philanthropic programs and areas of strategic focus, and combined budgets that exceeded historical contributions resulting from mergers and acquisitions.

3. Community Need

After pharma, the sectors giving the most included consumer staples, financial, industrial, and information technology industries, each of which gave 20% to 30% as much as last year. Following the job losses and budget cuts of the past few years these industries are in a good position to help – providing investments in communities and classrooms.

In fact, in a recent CECP survey of CEOs, “greater community need” was identified as the biggest trend driving companies to focus on solving societal problems.

As corporations have bounced back more quickly than communities following the economic downturn, companies are looking for ways to reinvest that align with their strategic interests. Giving back to local communities can spur on more than goodwill. Strategically, community investment can mean workforce development as well, and investing in long term assets like people and local infrastructure can be a valuable engagement strategy in the long term.

Leave a Reply