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May 22, 2012

May Business First: Benchmarking Study Reveals Trends in Corporate Giving

My May column in Business First focuses on a study which has opened a window on trends in corporate giving. Corporate giving has historically been a major funding source for nonprofits. While many studies compare philanthropy across nonprofit recipients, there has been little discussion comparing corporate giving across companies. The Committee Encouraging Corporate Philanthropy (CECP), however, releases an annual benchmarking study that manages to shed some light on how corporations give, to whom they give and how that may be changing. Founded in 1999 by Paul Newman and John Whitehead, CECP’s 184 members account for 40% of national corporate giving.

The most recent study reports that cash donations are just barely keeping up with inflation. Moreover, the area of real growth is gifts of products and employee time. This creates a conundrum for nonprofits. Gifts of products are apparently unpredictable. Should a nonprofit build a program that relies on product donations?

Employee volunteering is helpful, but not cost-free for nonprofits in terms of program management and coordination. In practice, nonprofits have viewed volunteer programs as a way to build a relationship with companies that will encourage higher cash gifts. Matching programs are too small to provide this linkage. The CECP survey doesn’t show any increase in corporate giving following an increase in volunteer hours. So, are the nonprofits benefiting from these corporate volunteer programs as much as they think or are the programs a costly way to let corporations off the hook for cash giving? What do you think?

To me, this lack of impact on corporate cash giving confirms the importance of developing a fundraising program that is based on individual giving. Corporations have increasing difficulty justifying philanthropy when their anchor to a specific locality is less common. Shareholders of public companies are increasingly demanding dividend payments, which makes it more difficult for a corporation to justify committing cash to philanthropy rather than to the shareholders.

While not so popular among companies, I am encouraged by the extensiveness of pro bono support from companies who do have those programs. Nonprofits are rich in program skills, but they often are short of the skills necessary to develop and evaluate business plans for new activities. Pro bono help in this area would be enormously beneficial. Forty-four of the 184 companies had pro bono programs and the median hours per company was two person-years. That is a tremendous amount of help.

Nonprofits are so used to asking for cash that they forget that getting pro bono expert assistance, such as a loaned executive, may be more obtainable than additional cash giving. I see a tremendous value which nonprofits could receive from marketing, logistics, store design, retail inventory and food service experts.

If the trends in this report continue, the future of nonprofit-corporate relations may lie more in borrowed expert services than in cash. Nonprofits should look at their programs and the companies which support them, then they can identify ways in which this trend could be beneficial for both. Offering strategic advising for nonprofits, a consultant can help assist an organization in this assessment. Click here for information regarding my expert consulting services or contact me now to schedule a coaching session for your organization.