Corporate Giving by the Numbers: More Room for Generosity
Robert Evans, a member of the Giving USA Editorial Review Board, breaks down just a few of the results from the 2014 Report on Philanthropy in 2013. Corporate giving has declined from 2012 to 2013. Here is what it might mean for your nonprofit.
Also seen in the Philadelphia Business Journal.
Corporations and businesses are often unfairly maligned for being focused on the bottom line at the expense of all else, including impacting the greater societal good. Those of us involved in the nonprofit world know that publicly-held businesses and corporations are often robust supporters of philanthropic activity. For-profit companies are increasingly forming innovative partnerships with traditional charities by focusing on specific issues and targeting dollars and time for maximum impact. However, the newest Giving USA, the annual study that tracks charitable giving in America, suggests that the numbers definitely illustrate that there is much more room for growth in corporate/business generosity.
The Giving USA report was issued on June 17 by the Giving USA Foundation, which is affiliated with the Giving Institute, and its research partner, the Indiana University Lilly School of Philanthropy. Published annually since 1957, the report is considered the authoritative annual source on charitable giving in the United States. While the report doesn’t break down data by region, it contains a wealth of information that is relevant to the Greater Philadelphia nonprofit community concerning corporate philanthropic habits and tactics.
Know that Giving USA reports that overall giving increased more than four percent in 2013 and totaled $365 billion. Charitable contributions are always seen as a lagging indicator of economic health. Charitable dollars are usually the last dollars parted with if donors feel comfortable with the overall economy. So, we see this as a positive sign that donors of all types are once again addressing our nation’s nonprofit needs.
The bulk of charitable giving, $240.6 billion worth, came from living individual donors with the balance coming from foundations, bequests and the corporate world. But the survey reports that in 2013, corporate giving in America totaled $17.9 billion, accounting for only five percent of the giving “philanthropic pie.” That figure represented an almost two percent decline while pre-tax corporate profits increased by 3.4 percent. Corporate giving amounted to less than one percent of all corporate profits, which is about where it has been for the past decade, not really approaching the two percent level seen in the mid-1980s.
Clearly, we can’t expect, nor would we necessarily want, corporate America to turn back the clock 30 years. But we should hope – and maybe even expect – that when corporate profits go up, corporate giving should increase as well.
While we acknowledge that many corporations are more engaged in their local communities today than ever before, the idea that corporations donate some of their profits back to the community has evolved over decades and become ensconced in modern business culture. In the past decade or so, philanthropy has undergone a sea change as individual donors have begun to behave more like investors. Practicing what’s been called “strategic philanthropy,” donors exercise much greater control over how their charitable dollars are spent and demand measurable results.
Corporations have followed suit. Many have adopted a “triple bottom line” approach and their executives have looked at how to improve the corporate image and thus boost business, how to make their clients or customers feel proud of supporting the business, and how to have a broader positive impact.
In many cases, corporations have sought to make a difference in ways that don’t involve giving cash. That’s often done either by co-sponsoring events or by directly donating products. In-kind gifts, especially by many pharmaceutical firms, such as the Chesterbrook-based-Amerisource, give away millions of dollars worth of medicine every year for which they receive certain tax incentives. And many corporations, locally and nationally, target their philanthropy toward a specific area such as the environment, disease research, workforce development and primary and secondary education.
It is certainly fair to ask that our largest corporations give just a little bit more. But it is a mistake for nonprofits to look upon corporations as anything other than potential strategic partners. Our local and national challenges are great. It is clear that to develop solutions to complex problems, the corporate sector, the nonprofit sector and government all need to play a role. The 2010 Citizens United decision in the U.S. Supreme Court found that spending money is tantamount to speech. If that is so, then philanthropic dollars are the highest form of speech. Let’s work together to marshal our collective generosity in innovative and strategic ways. From the biggest corporations to individuals of modest means, all of us play a part in reshaping the world. All of us can pledge to make giving a higher priority. Perhaps our region’s for-profit employers can re-think their philanthropic activities and obligations and propel Philadelphia to be seen as a true leader in charitable endeavors and community strengthening.
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