CECP Interview with NCOC on 2012 Giving in Numbers

Originally posted as featured content on NCOC's website:  http://www.ncoc.net/GivingInNumbers_2012  An interview between Alice Murphy, NCOC and Margaret Coady, CECP.

Alice Murphy: Looking at the context you provide in this report, Giving in Numbers: 2012 Edition, it seems like corporate giving is beginning to stabilize after the economic downturn. Could you provide a short narrative illustrating how corporate giving has weathered the economic crisis?

Margaret Coady: You have the headline exactly right: CECP’s data show that corporate giving has regained lost ground and stabilized from a low point in 2009.

Companies had been steadily increasing their giving until 2009 – we saw this in the survey data from 2006, 2007, and 2008. It wasn’t until 2009 that giving levels contracted. Anecdotally, they were doing all they could to keep giving levels high--trimming their administrative budgets and coming up with creative ways to deploy resources. A few companies were able to give more in 2009 largely through increases in non-cash giving (e.g., product, facilities, pro bono service).

Despite uncertainty about the health of U.S. and global markets, companies have been quick to restore their past giving levels. Some were able to do so in 2010 and others in 2011. Our survey data suggests that giving will remain flat in 2012.

Alice: The proportion of cash to non-cash giving in aggregate has declined in recent years. Why do you think this is the case?

Margaret: Industries vary widely in the proportion of their giving that is non-cash. For example, Figure 7 in the “Giving in Numbers”report shows that for Financials, Utilities, and Materials companies, typically less than 10% of their total giving is non-cash. However, that’s in sharp contrast to industries such as Health Care (which includes Pharmaceuticals), Consumer Staples, and Consumer Discretionary companies for which non-cash giving can be one-third or more of contributions. Manufacturing companies contribute more non-cash than Service companies simply because Manufacturing companies commonly donate the products they make.

Across all companies non-cash giving is proportionally on the rise, causing the ratio of cash to non-cash to decline. Companies are looking to extend the impact of their grants by supplementing their cash with non-cash, leading to greater contributions overall (see Figure 2 on page 10). The ability to mobilize valuable resources—products, office facilities, the skills and expertise of employees—makes corporate grant-making unique. Increasingly, companies are opening a dialogue with their nonprofit partners: What can we do for you to help you achieve your goals?

Alice: Companies appear to be transitioning from giving portfolios comprised of many low-dollar-value grants disbursed across a variety of causes to more selective, larger grants in issues areas in which they have greater expertise and which align with their business interests. This year, as in most years, health, education, and community and economic development were top priorities for companies. Could this focused strategy have a negative impact on focus areas that don’t neatly align with business interests (i.e. environment, culture and arts, and civic and public affairs)?

Margaret: A tendency toward fewer grants of larger dollar values directed toward a more limited set of issue areas is a trend that the corporate giving community has discussed for some time—but now we’re seeing it in the data, as shown in Figure 5 in the report.

The relationships that companies are forming are deeper and longer-lasting. Thus, once a nonprofit and a company connect around a signature issue, the commitment and partnership are more likely to be sustained.

It’s important to not be too quick to label an issue as misaligned with business interests. For media and entertainment companies like Time Warner, funding a local theater company fits directly into their strategic interest in developing storytellers and artists. Each company will make a different strategic choice depending on its industry and context—for some it will be conserving wetlands, for others supporting victims of domestic violence, for others financial literacy. The breadth is as diverse as the roster of engaged companies.

It’s also important to note that employee-directed funds that companies give through matching gifts programs are not included in our issue-area analysis. Employees support a range of community causes with their time and money, and nearly all large companies have programs to match those donations.

Alice: Have there been other similar trends in corporate giving – like a focus on more skills-based volunteering to drive more impact?

Margaret: Employees, particularly Millennials, increasingly want to ‘bring their values to work, and employers want to attract and retain top talent. Their passion for service is contagious and they are inspiring those in the generations before them to also ask: How is my company supporting my community, and how can I help?

Employers love this trend and are thrilled to support employees. The community benefits from well-designed service projects, and the company benefits through leadership development and team-building.

For many companies this means an expansion of pro bono service and skills-based projects (though more traditional volunteerism continues to be very popular). There are terrific case studies of pro bono work on the Taproot Foundation website.

Alice: Were there any surprises in this year’s data?

Margaret: We have noticed a macroeconomic trend across many sectors of robust revenue growth abroad. Companies always seek to be responsive to the communities where they operate, and for many this increasingly includes employees and consumers outside their headquarters country. We find that companies expanding their philanthropic footprint abroad increase their overall giving (rather than redistribute they amount they gave previously).

At CECP, we have intensified our focus on international corporate giving in the last few years. What we found is that companies’ international giving trails their international business activity. Giving internationally isn’t as simple as it sounds—there are many important cultural and legal considerations. We released a report this summer, “Developing the Global Guide to What Counts,”which was created with pro bono support from Deloitte. CECP will continue to track this data in future editions of “Giving in Numbers”.

Alice: You assess corporate giving based on a variety of factors and categories. Which industries have gone above and beyond when it comes to employee volunteerism, pro bono service, and grants?

Margaret: Unfortunately, it’s somewhat difficult to definitively answer this question from the point of view of employee service because while many companies have terrific volunteer and pro bono programs, their ability to accurately track and report participation is limited. Great software exists for this purpose—either developed by companies in-house or purchased through vendors—but there are many reasons why it can be difficult to get employees to enter their time. A great place to turn for outstanding examples is A Billion + Change, which in one year has rallied more than 250 companies and mobilized more than $1.9 billion in skills-based and pro bono service.

I encourage those with an interest in exemplary corporate giving to look at the roster of companies recognized by CECP’s annual Excellence Awards. Our external jury scores applications on four pillars: CEO leadership, innovation, dedication to measurement, and partnership. In June 2012 CECP recognized Kraft Foods, Xylem Inc., and the partnership between nonprofit Good360 and The Home Depot.