Study finds companies becoming more strategic in their philanthropy

Bog corporations want to see the imact their giving has.

Sixty-four percent of the world’s biggest companies increased their corporate philanthropy from 2010 to 2013, according to a report released Monday by CECP and The Conference Board.

Fifty-two percent of 261 companies that participated in the study. including 62 Fortune 100 corporations, raised their giving by 10% or more. The companies that did this also increased their median revenues by 11% from 2010 to 2013, and 59% of them saw their pretax profits rise.

Although giving rose for a majority of surveyed companies, the rate of growth of giving showed signs of slowing, the study found.

Last year saw the smallest marginal increases in contributions among companies giving 10% or more since the end of the recession up 6%, compared with a 17% increase in 2012 and the largest marginal decreases in giving 6%, compared with 1% in 2012.

The report found that the median number of nonprofit partners per corporate grant maker declined each year from 2010 to 2013, whereas grant sizes increased each year as companies focused societal investment dollars on strategic community partners.

As companies settle in to this post-recession economy and normalize their business practices, corporate giving is no exception, Michael Stroik, research and analytics manager at CECP. a coalition of 150 CEOs united in the belief that societal improvement is an essential measure of business performance, said in a statement.

Companies implemented more strategic and business-aligned community investment strategies during the recession, which continue today. They continue to see the win-win of their more strategic and in many cases, increased community investments as their revenues rise with their societal engagement.

Companies want to know that their grant dollars are making a difference, particularly in areas such as community and economic development that are foundational to the strength of society, the report said.

Seventy-six percent of surveyed companies were measuring their programs outcomes or impacts, and were beginning to use these data to inform the way they carried out their programs.

The vast majority of companies measure the impact of their giving, Alex Parkinson, a Conference Board research associate, said in the statement. Clearly this practice has become an integral part of corporate philanthropy.

Companies that arent seeking to understand the difference their charitable contributions make need to consider how to implement measurement regimes with their nonprofit partners.

Post-Recession Giving

One behavior that grew during the recession was for companies to make the most of noncash resources in the community when cash reserves were low, the report said. Service companies led the expansion of noncash giving, whereas historically manufacturers had given more noncash gifts, typically in the form of product donations.

From 2010 to 2013, service companies average noncash contributions as a percentage of total giving increased from 15% to 18%, while that of manufacturing companies decreased from 29% to 25%, according to the report.

In 2013, 64% of companies made noncash gifts, including product, pro bono and other in-kind contributions. The average noncash gift increased by 66% for companies whose giving rose by more than 10% from 2010 to 2013.

One driver of this growth in noncash giving was the expansion of pro bono service programs. Every industry was represented in the 2013 pro bono analysis, the first time this has happened since Giving in Numbers began reporting on employee engagement programs, the statement said.

In 2010, 34% of companies offered a domestic pro bono service program; by 2013, 50% of companies were offering such a program.

According to the report, community and economic development were the fastest growing program areas, with total contributions increasing by 34% from 2010 to 2013.

For the second consecutive year, K-12 and higher education was the most popular funding area, representing 28% of total giving for the average company in 2013, one percentage point ahead of health and social services.

Among companies that made international contributions in 2013, the average company contributed 22% of its total giving budget to recipients outside its headquarters country.