Philanthropy – does your business give back to the community?

A heart made of coins on a pink background

Philanthropy has changed dramatically over the years. Early forms of charitable giving were influenced primarily by chief executive officers (CEOs) based on their philanthropic interests, and often had little to do with business strategy. They were fueled by a CEO’s desire to give back and their corporate giving typically addressed an issue of personal interest. As economic prosperity in the United States increased, CEOs from companies such as Chase Manhattan Bank, General Electric and Cummins created foundations and programs that institutionalized philanthropy as part of the company mission.

Today, it is almost expected that successful companies have some sort of Corporate Social Responsibility (CSR) aspect of their business. In fact, a poll conducted by Morning Consult for Fortune Magazine found that Millennials are more likely than Gen X’ers and Baby Boomers to say it matters if American Businesses give back to Society.

The survey of more than 2,000 individuals found that nearly two-thirds of people between the ages of 18 and 34 were at least somewhat more likely to want to work for a company that gave to charity than one did that not. That compares with 59% of those between 35 and 44 years old, and 47% of people between 45 and 64 years old. Young people were also more inclined than their elders to say they would buy products from a company that contributes to charity or to recommend the business to a friend.

In Nevada, the Moonridge Group Philanthropy Advisors in conjunction with the Nevada Corporate Giving Council, produced the 2018 Nevada Corporate Giving report with some very interesting statistics showing that in 2017, Nevada companies gave an estimated $167.3 million (22 percent of reported revenues), an increase of 24.7 percent over the $134.2 million reported in 2016.

While the amount of dollars donated is impressive, one of the interesting facts about the Nevada survey is the importance that employees placed on working for a company that respected the environment and made philanthropy a part of their strategy.

Employee engagement rose to the top as an important aspect of corporate philanthropy in Nevada. Workers are placing greater value on working for companies that make positive social impacts, and many employers are expanding their philanthropic efforts accordingly to better recruit and retain talent. Notably, 53 percent of survey respondents cited having a volunteer program as a key element of their corporate philanthropy strategy, and two-thirds of companies reported offering some type of donation matching where employee contributions to selected non-profit organizations are also supported by the business.

Collectively, participating companies reported that their employees spent more than 90,000 hours volunteering for various causes statewide throughout 2017.

Another way many companies engage employees in their giving programs is through donation matching. In fact, two-thirds of the survey respondents indicated they had a donation matching program for their employees. Among these companies, 53 percent reported having a workplace giving campaign to promote and solicit donations for various charities, 23 percent indicated they have a year-round matching program, and 20 percent have a “Dollars for Doers” program in which the company makes donations to charities at which employees volunteer their time.

In essence, employees are in a unique position to both guide and evaluate the effectiveness of corporate social investments.

As for the company, when asked about motivating factors for their philanthropic pursuits, promoting community wellness and sustainability was ranked first by 34 percent of participating companies.

When asked to identify the top societal issues that their philanthropy aims to alleviate, survey respondents overwhelmingly identified education and homelessness/poverty as their primary focus areas of focus. Each was cited by roughly 38 percent of respondents.

In addition to education; poverty and related issues such as homelessness, affordable housing, and food insecurity were also areas of concern. Nearly 31 percent of monetary and in-kind contributions reported in this year’s survey was directed toward health and social services programs, almost double the 16.5 percent share reported last year.

When asked to describe the distribution of their social investments, corporations in Nevada indicated a wide variety of focus areas. Worth noting is that 33 percent of participating companies indicated that they adjusted the causes they supported during the past year.

  • Health & Social                   30.9%
  • K-12 Education                    20.0%
  • Environmental                     10.6%
  • Higher Education                  9.4%
  • Civic & Public Affairs            6.6%
  • Arts & Culture                        3.6%
  • Other                                       19.1%

There are many considerations that influence a company’s social investment decisions. With over 7,000 non-profit organizations in Nevada, it is important for companies to identify plans and partnerships that believe to be focused, effective, and measurable in their outcomes. When qualifying non-profits for donations, companies looked at measurements of results or return on investment (ROI) figures. They also looked at the specific use of funds.

The Nevada Corporate Giving report concluded that corporate philanthropy is a continuously evolving field where stakeholder relationships play a vital role in determining nearly every aspect of the process and its results. Each company’s philanthropic efforts are influenced by its industry; its relative size; the community it serves; company’s vision, and values, and those of its employees, as well as the timing and perceived need. While each company pursues a slightly different path, they all seek alignment, they all seek efficiency, and they all see measurable and meaningful outcomes.

The Nevada Corporate Giving report is 30 pages of very informative reading and provides great guidance to any business that is considering their own philanthropy program. The entire report can be downloaded here. You can also participate in next years report by contacting the Moonridge Group.

We at Business Finance Corporation are here to help you manage your accounts receivables so that you can concentrate on your business and customers.

Your partner in success,

David Cabral