Corporate Philanthropy on the Rise, Research Finds

Corporate Philanthropy on the Rise, Research Finds

Fortunately for everyone, there were no major disasters on the level of 2005's tsunami, South Asian earthquake, or Hurricane Katrina. But even though disaster-relief donations dropped substantially, in 2006 companies continued to increase the philanthropic donations, according to data released today.

The Committee Encouraging Corporate Philanthropy released a report analyzing the philanthropy of 113 companies, including 44 of the Fortune 100 companies, and found that they donated more than $10.6 billion to charities, an increase of 4.7 percent.

CECP found that the 89 matched-set companies were split in their giving - 56 percent noted an increase in corporate giving from 2005 to 2006 and 44 percent identified a decrease. Thirteen percent of companies increased giving by more than 30 percent, a strong pull that offset the data of the companies for which giving fell.

The companies that gave more in 2006 are mostly service-based businesses. CECP said a variety of factors influenced the increased giving. Chief among them may have been the strong profits companies have seen in recent years, resulting in larger contributions through philanthropy programs.

Another factor was improvements in measurement practices, a growing trend that allows companies, subsidiaries, and nonprofits to better track cash and non-cash giving.

The set of companies for which giving decreased from 2005 to 2006 largely consists of manufacturing companies that noted a drop in non-cash giving, or in-kind donations. Some of the causes for this decline include the absence of significant contributions to disaster-relief efforts through in-kind gifts, lower overall production levels or a decrease in the value of donated products, and even changes to Medicare policy, which reduced the number of participants enrolled in Patient Assistance Programs that provide in-kind prescription drugs in the U.S. This change led to a decline in pharmaceutical non-cash giving in 2006.

Another trend in the research finds international corporate giving on the rise. Philanthropy to overseas beneficiaries, as a percentage of total giving, increased from 10.0 percent in 2004 to 13.5 percent in 2006. In addition, nearly 20 percent of total corporate giving by manufacturing companies in 2006 was invested internationally, supporting a growing trend of companies giving more globally where their employees and consumers are based and revenue is generated.

The trends revealed in this research show a continual investment by companies to improve and expand giving programs. Companies are paying closer attention to their philanthropic initiatives and are better now than ever before at measuring and capturing their giving data.

"Companies continue to set the bar even higher for corporate giving as philanthropy is further accepted as a business imperative," said Charles Moore, CECP's executive director. "Our members, 160 CEOs representing many of the world's largest companies, recognize the important role of philanthropy in their business strategy and continue to prove their dedication to community investment, as seen in this research."