Corporate Giving Changes Direction - International Analysis

A new international analysis has found a big change in corporate giving – with an increase in the trend towards cash donations.

The Committee Encouraging Corporate Philanthropy (CECP),a US-based CEO membership organization, has released its latest report Giving in Numbers: 2011 Edition.

Drawing on data from 184 companies, including 63 of the top 100 companies in the Fortune 500, Giving in Numbers looks at 2010 corporate giving trends on an international scale.

“Giving in Numbers provides a transparent view of leading corporations’ behavior and priorities at a time of economic uncertainty and increasing private-sector involvement in addressing today’s pressing societal problems,” said CECP’s
Director Margaret Coady.

Report author, Alison Rose, Manager, says the analysis seeks to answer the pivotal question: How has corporate giving changed since the onset of the economic downturn?

The report found that there have been extreme changes in giving since 2007 and since the financial crisis affected the profits of different industries at different times, recovery has not been uniform.

CECP identified strikingly divergent paths in corporate contributions since 2007 with a quarter of companies increasing giving by more than 25%, while 21% reduced contributions by more than 25%, demonstrating that while some companies have been able to surpass pre-crisis giving levels, others are still in a period of rebuilding.

The report says that early in the downturn, many corporations pulled back on cash grants (67% reduced cash contributions from 2008 to 2009) and often increased their non-cash donations in the form of product or pro bono services in order to maintain commitments to their Not for Profit partners.

However, this trend in cash giving reversed from 2009 to 2010, when 61% of companies increased cash contributions.

Giving to disaster relief, a rise in matching gift contributions, and better reporting from business units were cited by some companies as reasons for increased levels of cash grants. However, despite year-over-year recovery and while cash contributions have rebounded in aggregate, not all companies have returned to predownturn cash contribution levels.

Some 53% of companies gave less cash in 2010 than they did in 2007, with 42% reducing cash giving by 10% or more.

The analysis found that companies are increasingly targeting one or two societal issues rather than spreading funding widely across multiple program areas. Within a matched set of companies from 2009 to 2010, the percentage of companies reporting at least half of total giving to one program area rose from 24% to 33%.

Furthermore, the median number of grants per full time contributions employee declined by 27% since 2007, while the median grant size has increased by 12%.

Hardship in their communities prompted many companies to support basic health and social service programs in 2010. Education and community and economic development were also cited as program areas receiving considerable targeted funding.

Increased Disaster Aid for Haiti. The several large-scale international disasters of 2010, in particular the Haitian earthquake, prompted many companies to provide above-budget funding for relief and recovery efforts. This was the leading reason cited by corporate contributions professionals for increased cash giving at their company in 2010. Forty companies added a specific disaster-relief employee matching program that had not been offered in 2009.

The competition to attract and retain talented employees has encouraged many
companies to offer innovative and meaningful employee-volunteer opportunities. Dollars for Doers, employee recognition awards, flexible scheduling, and paid-release time were programs most frequently offered.

In 2010, 89% of companies reported having a formal domestic employee-volunteer program and 52% reported at least one formal international volunteer program. The number of companies offering pro bono service programs, which leverage the core expertise and professional services of employees for the benefit of Not for Profit partners, continues to grow each year.

Download the report at http://www.corporatephilanthropy.org/measurement/benchmarking-reports/giving-in-numbers.html