Corporate Philanthropy Guidelines:
Whether your company is new to corporate philanthropy or it is looking for trends in giving, this section will help answer general questions about corporate responsibility.
CSR stands for corporate social responsibility.
We describe CSR as the accountability of an organization, business or company for the impact it makes on the communities where it does business. It is our belief that responsible, sustainable approaches to corporate social responsibility are best achieved when a business utilizes a strategic philanthropic approach. Through a holistic applied approach a company builds both its brand and reputation, which ultimately strengthens the community and the marketplace which it serves.
Strategic philanthropy refers to the strategy, key competencies and application of an effective corporate philanthropy program. Using a strategic approach to philanthropy, a company can align itself with social issues that meet its mission, vision and corporate values by partnering with a specific nonprofit or charity. Once identified, the company can then use their strategy to provide financial donations and/or in-kind donations as well as measure the results of their efforts.
“Strategic philanthropy” is a term that describes an effective corporate philanthropy program that can benefit society while also serving business interests. Any grant can be a source of good will, but strategic philanthropy is meant to improve company profits through targeted giving that corresponds to company interests. Instead of simply donating resources to worthy causes, corporations now look for giving opportunities that are “news worthy.”
Committee Encouraging Corporate Philanthropy (CECP)
In many ways, corporate philanthropy (also referred to as corporate giving) is similar to individual philanthropy in that a company donates to a charity that it deems deserving. However, trends indicate that more companies are looking to get away from check writing and becoming more strategic in their philanthropic approach.
Corporate philanthropy must be done directly through corporate gifts or a corporation may establish its own non-profit charity or foundation.
- Corporate contributions. These are usually treated as a business expense.
- Designated funds from a corporate philanthropy/community relations budget. A company is allowed to give up to ten percent of its pre-tax income in tax-deductible charitable donations. The pre-tax income can also be used toward the company’s own foundation.
- Individuals or employees giving a donation to a charity through an employee/workplace giving program.
- Corporate sponsorships
8. In-kind Donations Include:
- Advertising support
- Employee volunteer opportunities and/or giving
- Use of the company’s: Products, Services, Facilities & Properties
Today’s job seekers are looking for more than paid vacation, sick time and 401(k) plans. As more companies work to attract and retain talented employees, they are looking for meaningful and innovative opportunities to offer; volunteerism is showing to be a real corporate benefit.
Other benefits gained from employee volunteer programs include:
- Preparing for a management position by honing their supervisory and leadership skills
- Bringing awareness of social issues within their community
- Networking with community leaders
- Improving community perception and marketing potential
- Creating a positive culture of caring and community service
- Improving communication as people from different sites, departments and levels of seniority work together on social community initiatives
- Improving relationships with customers who increasingly demand information about corporate-citizenship activities
- Improving employee morale, motivation, productivity and fulfillment
- Personal and professional growth of company workforce
- Enhances reputation for the company, brand or both
- Bolsters employee skills
- Improves employee respect and pride for the company
- Differentiates company from competitors
- Benefits society and while meeting business objectives
Every company needs to determine their budget, keeping in mind that a company is allowed to give up to ten percent of its pre-tax income in tax-deductible charitable donations. A comprehensive corporate citizen is considered any company that gives a minimum of 1% of its pre-tax profits.
Today, more businesses are incorporating a philanthropic strategy to address the social and global problems that are directly and indirectly limiting their business. Other trends include:
- Increase in the number of corporations researching partnerships with charities that align with their mission
- Sophisticated consumers who prefer to align with company brands that match their values
- Business strategy for corporate giving that aligns with company business interests
- Increase in Employee Engagement – employees are interested in the health of their communities and their talents can be useful; companies look for skill based volunteer programs
Based on data from 184 companies, including 63 of the top 100 companies in the Fortune 500, the 2011 Edition of Giving in Numbers is the Committee Encouraging Corporate Philanthropy’s (CECP) seventh annual report on trends in corporate philanthropy.
- 94% of companies offered at least one matching gift program in 2010
- 89% of companies had a formal domestic employee volunteer program
- 81% of companies reported having a corporate foundation
- Health, education, and community and economic development were top priorities for the typical company
- Create a budget. Start with the 1% (or higher if you can) of pre-tax profits and plan to increase that percentage if your profits go up. If for budgetary reasons you cannot financially increase your donation, consider augmenting your contribution with products and/or in-kind services.
- Build plan that aligns with business interest. Before committing to a charity or nonprofit, do your research.
- Align with financially secure nonprofits. Review financial records through public records.
- Align with a nonprofit that gets results. Look beyond the number of activities or people served to measure outcomes.
- Involve your employees. When employees are part of the decision making process of which charities the company should align with, they are more likely to offer their support.
- Dedicated staff. Have a dedicated employee(s) oversee initiative(s).
- Obtain CEO/leadership involved. Employees and customers respond favorably when they know the support for a nonprofit starts at the top.
- Communicate. Share how, why and in what way the company supports and/or aligns with a certain charity or nonprofit with your employees, current customers and prospective customers.