Is Corporate Philanthropy Being Replaced?

Consumers and employees seek authentic contributions to society, and tangible impact. A corporate giving approach aligned with business strategies and powered by data measurement can help companies deliver on this mandate.

Within the practice of corporate giving, “measurement and evaluation are on the rise. 84% of companies measured the outcomes and/or impacts of at least a portion of their portfolio. Those that did reported an 18% jump in total giving… They increased giving even more when they measured also the business value of volunteering.” These findings from CECP’s Giving in the Numbers – 10th Anniversary 2015 Edition, showcase a distinct shift in the philanthropy world towards a more strategic and impact-focused approach.  A quest for data is now a widely accepted best practice, as programs are being more closely scrutinized for efficacy than ever. Quantitative results can also drive greater impact by justifying greater program investment.

Jean Case (who started the Case Foundation with AOL co-founder Steve Case) had this to say in Harvard Business Review’s How a New Generation of Business Leaders Views Philanthropy: “Moving more toward a dashboard approach is important where there is available data. Where there isn’t, you need to invest in getting the data or ‘being the data’ by innovating and breaking new ground to help those that come after you be farther up the learning curve. Don’t let [the lack of existing data] be an excuse to not take risks.”

CECP In the Numbers 2015
Image Source: CECP’s Giving in the Numbers – 10th Anniversary 2015 Edition

Further underscoring this shift in approach from philanthropic giving to investment, The Conference Board, in its report Measuring the Impact of Corporate Social Investments, has chosen to move away from the term “corporate philanthropy.” Instead, it prefers “corporate social investments” to define “cash and non-cash contributions, as well as employee programs, that a company initiates to create value for society in alignment with business goals.” Stating, “as these types of contributions have become increasingly strategic and viewed as a true investment in the creation of a healthy society, the term philanthropy has become less relevant, particularly in a global setting.” CECP’s Giving in the Numbers – 10th Anniversary 2015 Edition explains the shift in terminology this way: “Historically, ‘philanthropy’ and ‘foundation’ were the most used descriptors for the community engagement function. Today, that list has expanded to include “citizenship,” “community,” “social/societal investment,” and more.”

The 20 Most Generous Companies of the Fortune 500 Take a look at The 20 Most Generous Companies of the Fortune 500 and you can see evidence of the use of a more strategic approach to corporate giving in each of these 5 powerful brands:

Excerpts from The 20 Most Generous Companies of the Fortune 500:

#3 Wells Fargo’s 2015 cash contributions: $281.3 million

The bank aims to donate between 1.2% and 1.5% of its earnings each year. It does that through two primary philanthropic portfolios: one that’s distributed at the local level, by senior leaders in markets where the bank operates, and a second that is national and more tightly tied to the firm’s business expertise. For example, in 2015, Wells Fargo gave a total of $25 million to the nonprofit NeighborWorks, to support financial education and down payments on homes. Employees receive two days of paid leave per year to volunteer; they can also apply to spend six weeks working with a nonprofit of their choice.

#8 Bank of America’s 2015 cash contributions: $168.5 million

Like many financial firms, Bank of America sharpened its focus on basic needs and economic mobility following the 2008 recession. Last year, it spent just shy of $50 million on workforce education, $33 million on community development, and $33 million on hunger and other urgent needs. During the winter holiday season, Bank of America runs a marketing campaign to raise money and awareness for the anti-hunger group Feeding America. For every dollar that customers give online to the group via Bank of America portals, the company contributes $2. Employees get two hours off per week to volunteer.

#11 Microsoft’s 2015 Cash contributions: $135.2 million

Microsoft is aligning its giving around its business assets. Last year, the Redmond, Wash.-based company appointed Mary Snapp, who previously served as Microsoft’s deputy general counsel, to help strengthen its relationships with nonprofits and find new ways to use employees’ tech skills for social benefit. For example, the company has invited charity leaders to pitch ideas for hackathons where Microsoft engineers can solve data and tech problems for social good. Longstanding Microsoft programs match employee volunteer time with $25 in cash per hour, and enable engineers to teach computer science in high schools.

#12 Merck’s 2015 cash contributions: $132.5 million

Led by Julie Gerberding, former director of the U.S. Centers for Disease Control and Prevention, Merck’s corporate giving initiative focuses on reducing maternal mortality. In Senegal, for example, Merck partnered with the Bill & Melinda Gates Foundation and the national government to develop a network of entrepreneurs to supply rural health clinics with contraceptives. That work also benefits Merck by strengthening health systems. For employees, the company offers a yearlong fellowship to volunteer with nonprofit organizations; so far, 70 people have participated.

#14:  AT&T’s 2015 cash contributions: $112.9 million

The telecom company’s giving hews closely to its business objectives. Recognizing that a skilled workforce is key to its financial success, AT&T has contributed $350 million since 2008 to help reduce high school dropout rates. The company is also partnering with Udacity, the online education provider, to subsidize nanodegrees—intensive certification programs–in IT. Its total giving grew by nearly a third last year due to the acquisition of satellite television company DirecTV.

CECP’s Giving in the Numbers – 10th Anniversary 2015 Edition goes on to say, “Doing good beyond giving is growing, too. While total giving (cash and non-cash investments) is stable and strong, companies are also seeking to innovate through cross-departmental collaborations, new product development, and impact investments.”  Corporate Foundations play a vital role in expressing corporate values both internally and externally, something which is increasingly important in a world where 90% of customers are likely to switch brands to one associated with a good cause, given similar price and quality (Source: 2015 Cone Communications/Ebiquity Global CSR Study). Collaborating with marketing departments, for example, can further extend the benefits and value of their relationships with nonprofit partners.

Consumers and employees seek authentic contributions to society, and tangible impact.  A corporate foundation approach aligned with business strategies and powered by data measurement can help companies deliver on this mandate.  Corporate foundations are an important piece of the corporate social responsibility puzzle.  Is your corporate foundation collecting the data you need to report impact and return on investment to your key stakeholders?

INPEX’s Tech-Touch™ approach helps our clients dramatically increase the strategic benefits of their cause programs. It includes real-time dashboards that showcase measurable results, trained support staff, logistical nightmares solved – and the power of creating meaningful emotional connection with customers and employees where they live and work.  Contact Us to explore the possibilities.

You can learn more about the value of cross-departmental collaborations in our recent post:

Emotional Marketing Drives Business, Stop Squandering Cause Partnerships

Image Credit: Change

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