Corporate Philanthropy: A Mixed Bag of Gifts
Corporate giving is on the rise by dollar amount, but still represents less than 10% of all charitable giving in the U.S. In 2023, corporations accounted for $36.55 billion of the $557.16 billion donated nationally, ranking behind the 19% that comes from foundations and the 67% given by individuals. (The remaining 8% came from bequests.)
Nevertheless, corporate giving is an important part of the philanthropic movement in the United States. In almost all cases, it represents a net positive for all parties: The companies that give, whether in the form of outright donations of cash, goods, or services, matching employee contributions, granting scholarships and underwriting sponsorships; company employees whose efforts and donations are subsidized, supported, and supplemented by their employers; and the organizations that benefit from their combined generosity.
In fact, employees are increasingly drawn to companies with a commitment to corporate social responsibility (CSR) and giving. For close to three-quarters (71%) of employees surveyed by nonprofit America’s Charities, employers not supporting philanthropy is a deal-breaker. Maybe those workers know that research from the Cleveland Clinic says that giving back isn’t just good for the soul. It can lower blood pressure and stress, increase self-esteem, be a weapon in the fight against depression, and prolong longevity.
Or perhaps the employers know that companies whose workers engage in company-supported philanthropy have 57% lower employee turnover than other companies. Regardless, it’s little surprise that 49% of companies surveyed see corporate philanthropy as a growth strategy.
Here is a look at some significant trends in corporate giving, and the statistics that paint a picture that inspires cautious optimism.
Year-Round Giving
While Giving Tuesday – the first Tuesday after Thanksgiving – represents an opportunity for many charities to solicit money from well-meaning donors perhaps looking for a tax break or a last chance to do good for the year, it’s now more the culmination of their year-round fundraising efforts than their one big chance. According to Nonprofit Source, “engaging in corporate giving initiatives year-round leads to heightened employee engagement and a greater philanthropic impact” because it allows both employees and businesses to engage more consistently with the cause or charity of their choice. And a year-round strategy allows companies to be more agile in providing disaster relief.
More Ways to Give
Just as companies are moving to year-round giving, they’re also increasing the ways they give. According to software company Double the Donation, there are 14 ways for companies to participate in philanthropy: matching gifts, volunteer grants, corporate grants, employee grants, stipends, automatic payroll deductions, volunteer time off, in-kind donations, scholarships, sponsorships, cause-related marketing, annual giving, employee product donation programs, and peer-to-peer fundraising. The more ways there are to support both good causes and employees’ interests in giving, the more likely it is that both employers and employees will participate. This is borne out by the fact that the growth rate for corporate giving, at 14.3%, is almost triple the 5.3% growth rate for giving overall. In fact, per a report from the World Economic Forum, corporate philanthropy in the U.S. has increased some 90% adjusted for inflation, thanks in large part to sharp rises in corporate earnings.
The plethora of ways companies can give has made it easier for midsize companies and startups to find a method that fits both their corporate culture and annual budget. For some companies, giving cash outright can feel like a stretch in a way that giving employees time off for volunteering does not. Also, the variety of giving options means that companies can expand or alter their offerings easily when circumstances allow for or warrant a change. Their adoption of CSR and giving is recognition of the impact philanthropy has in “meeting stakeholder expectations, driving positive social and environmental impact, and strengthening their competitive position in the market,” according to Double the Donation.
The Ups and Downs of Money
Health and social services, and community and economic development are the two causes that receive the most money from corporate giving, according to the CECP report. The areas that saw the biggest boosts in giving in 2023 were arts, culture, and the humanities (up 6.6%), education 6.7%); public society benefit (7.2%), and foundations (10.8%). (These figures take into account adjustment for inflation.)
But the adjustments for inflation tell some less positive news. In 2023, inflation caused total giving to see a decline of 2.1%, even as giving by foundations grew in four of the last five years, spurred on in part by increases in corporate profits. According to the annual report from Chief Executives for Corporate Purposes, corporate donations rose only 2% after adjusting for inflation.
And the World Economic Forum issues a caveat about corporate giving. While the number in current dollars has increased annually for the last few years, “US corporate philanthropy as a share of pre-tax profit has declined from 1.4% in 2002 to 0.9% in 2022.”
Additionally, the “decrease may indicate that some corporations are choosing to reduce the role of philanthropy in their overall strategies or are shifting their priorities away from social and environmental causes.”
But Kate Stobbe, director of corporate insights at CECP, looks at the figures and sees a more optimistic story. “The median total community investment as a percentage of pretax profit, it’s right at 0.93 percent. The gold standard is 1 percent pretax profit. So we’re seeing companies getting really close to that gold standard.”
And what is philanthropy, after all, but an exercise in optimism.
Corporate Giving By The Numbers
Just about two-thirds (65%) of Fortune 500 companies offer matching gift programs.*
An estimated $2 billion to $3 billion is donated through matching gift programs each year, and it is estimated that $4 billion-$7 billion in matching gift funds go unclaimed every year.*
The report noted that 94 percent of companies offer to match employees’ charitable gifts, but only 20 percent of workers actually participate in those programs. **
From 2021 to 2023, average volunteer participation was up 8 percent, and the median number of volunteer hours grew by 75 percent.**
28% of employers offer paid leave for volunteering, a percentage that is on the rise.***
*https://doublethedonation.com/matching-gift-statistics/
**CEPC.com annual report
