Corporate Giving: Overall giving on the rise, but some areas falter
The 2007 edition of “Giving in Numbers: Corporate Giving Stan-dard,” published last October by the Committee Encouraging Cor-porate Philanthropy, analyzes trends in corporate philanthropy using 2006 data from 136 leading companies. Chaired by actor Paul Newman, one of its founders, the committee is an international forum of CEOs and chairpersons focused on en-hancing corporate philanthropy. Here are some of its top findings for the year 2006:
Total giving increased. The median dollar value of contributions increased from $29.50 million in 2005 to $32.60 million in 2006, with a median percentage increase of 4.8 percent per company. Median total giving as a percentage of revenue was unchanged at 0.14 percent, while median total giving as a percentage of pre-tax profit fell nominally from 0.98 percent in 2005 to 0.93 percent in 2006.
Companies are split. Fifty-seven percent of companies reported increased giving from 2005 to 2006, while 43 percent reported decreased giving.
Reasons for increased giving. Thirty-five percent of companies experienced increases in total giving of 10 percent or more from 2005 to 2006, with 67 percent of those companies representing the service sector. The most frequently cited reasons for the upward change were continued strong profits, improved measurement of pre-existing giving, corporate growth by mergers and acquisitions, the launch of new multiyear funding initiatives and more accurate valuations of pro bono services.
Reasons for decreased giving. Twenty-one percent of companies saw giving decrease by 10 percent or more from 2005 to 2006. Reasons include decreased non cash giving among manufacturing companies following beyond-budget donations to disaster relief in 2005; a drop in matching gift participation after late 2004 and 2005 disasters; a reduction in philanthropy budgets and staff related to corporate spin-offs and departmental closures; the conclusion of multiyear grant programs; and a change in Medicare policy affecting the noncash giving of pharmaceutical manufacturers.
Direct cash remains prevalent. Contributions across the three giving categories of direct cash, foundation cash and noncash were fairly stable from 2004 to 2006, with direct cash accounting for 43 percent to 46 percent of total giving each year. However, companies that gave less in 2006 than in 2005 decreased most in noncash giving, while companies that gave more in 2006 increased most in direct cash giving.
Matching gifts fell to 2004 levels. For the typical company in 2006, matching gifts accounted for 9.1 percent of total giving, with significant variation across industries. In 2005, matching of employee contributions to disaster-relief efforts spiked to 22 percent of total matching. The 2004 to 2006 data show that disaster-relief matching returned to 2 percent of total matching in 2006, comparable to its 2004 level.
Health and social services. Giving to health and social services remained prominent, commanding 31 percent of the typical company’s total giving budget. Education was the second-most funded program area, garnering 25 percent of the typical company’s contributions, while environmental causes remained the least funded at 3 percent of total giving.
International giving on the rise. As a percentage of total giving, grants to organizations serving international recipients increased from 9.6 percent in 2004 to 12.9 percent in 2006.