Businesses continue to find ways to give back

How about a little good news? In the fall of 2009, the Committee Encouraging Corporate Philanthropy, an international forum of business CEOs and chairpersons, released its 2009 report “Giving In Numbers.” It surveyed 137 companies, including 55 of Fortune’s 100 largest American public companies. Despite the economic challenges of 2008, contributions of cash and product totaled some $11.25 billion, which in terms of aggregate giving was only slightly lower than in 2007.

Small and mid-size businesses are probably thinking that a corporate giving program may be nice to offer, but “my profits are down and cash is tight – giving is not a priority” or “I believe in giving back to my community, but realistically I do not have a lot to give.” Before answering these concerns, let’s first talk about “why” companies give.

Why give?

A company’s motivation for giving is as varied as the ways it can give. Giving programs are initiated solely for commercial gain, anticipated sales increases or to help acquire a big client. Other motivations are for purely charitable purposes and a company’s belief in its social contract with society. Giving programs can also be a component of a proactive and strategic community investment. Very often, however, corporate giving is a combination of some, or all of the above.

The benefits of corporate giving are equally as varied and can be categorized as an internal or external benefit. The obvious and primary external benefit is the good you do for the recipient organization and the clients it serves. Additional external benefits can include greater and positive public visibility, increased consumer loyalty and increased sales. Programs can also lead to new or improved relationships with key community leaders, officials, suppliers, retailers and other businesses.

Internally, corporate giving can build a strong and positive company culture through the creation of a cause or purpose to rally around. Also, programs that provide employees with opportunities to perform community service can be a morale booster, an advantage in attracting and retaining employees, and a vehicle for leadership development.

How to give

Some of the more traditional means by which a company gives and which continue to remain strong are:

Corporate giving program. A company or business makes charitable donations or grants from its annual operating budget without a separate endowment or budget. These are usually administered by a staff member and directed by the CEO or an advisory committee.

Corporate foundation. An independent, tax-exempt private foundation that is usually set up with an initial endowment, to which the company can add future contributions.

Corporate fund. A company creates its own donor advised fund at a community foundation or other institution of its choosing.

Employee matching program and federated funds. A company assists and encourages employees to make charitable donations by matching employee gifts of cash or by organizing workplace giving programs and by facilitating payroll deductions for charitable gifts.

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