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Corporate Social Responsibility

Decrease in Corporate Giving, Except for a Few Stars


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By Melissa J. Anderson

Corporate giving is down for the majority of companies, yet total donation amounts are up, despite the tough economy, revealed two recently released studies.

Despite the tough economy, corporate giving was up by 5.5 percent in 2009, according to a report released by Giving USA and the Center on Philanthropy at Indiana University – an estimated $14.1 billion.

Although now within 1 percent of its pre-recession level, the Giving USA study revealed that the unexpected increase is more closely related to in-kind giving than cash donation, which isn’t as harshly affected by economic circumstances. At the same time, the study revealed, total US donations (including individual, foundation, and corporation) were down by 3.2 percent, adjusted for inflation.

Aggregate Donations Up, Median Donations Down

The corporate data rings true to another study released in June that measured corporate donation across 4 years, by 98 companies

According to the Committee Encouraging Corporate Philanthropy (CECP)’s report on corporate giving, Giving in Numbers 2009 [PDF], there was an increase in overall corporate donations, yet, for most individual companies, giving decreased. The research showed that 60% of companies involved in the 4-year longitudinal set gave less in 2009 than in 2008, and median giving fell from $32.91 million in 2007 to $26.30 million in 2009.

According to Margaret Coady, Report Author and Director, Committee Encouraging Corporate Philanthropy at CECP explained the connection between the economy and corporate donations:

“That business and society are fundamentally interconnected became increasingly evident during the economic downturn—as well as during the emerging recovery. Respecting the dependency between companies and their community partners continues to be central to the work of those leading the field of corporate community investment.”

The study showed that most companies gave less due to spending restrictions, although the completion of multi-year funding commitments, staff reductions leading to a decrease in matching gifts were also cited, along with a decline in foundation endowments and in corporate transfers to foundations.

Even in though the majority of companies gave less, the aggregate of total giving rose to $9.93 billion. This means that a few key companies in the set are pulling extra weight when it comes to giving.

Finding Ways to Give, Despite Economy – Why?

Two interesting findings by the CECP show that corporations are finding ways to give – despite the tough economy.

First, the study showed that while the recession had a broad, overall effect on donation, the financial state of an individual company had no statistical effect on corporate giving. Based on regression analysis, CECP could not find a connection between reduced profits and reduced giving – companies are giving even when they aren’t making money.

Second, a larger sample of corporations (not necessarily involved in the longitudinal part of the study) revealed that non-cash gifts were up by a median of 29%. Even if companies couldn’t give cash, a large number gave in-kind donations.

Together, these two findings show that companies see an intrinsic value in giving. One reason: after years of supporting charities to build employee engagement, they need to continue that maintain that bond – even during the down economy. When employee interest in corporate giving is high, corporations will be less likely to reduce giving.

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