Five Indicators Show Growth in Purpose at World's Largest Companies

Most complete survey of societal engagement at 271 companies finds stable giving rates, strengthening business case for community investment

News provided by

The Conference Board

Jun 02, 2015, 02:00 ET

NEW YORK, June 2, 2015 /PRNewswire/ -- CECP, in association with The Conference Board, found in their annual Giving in Numbers survey that companies utilized their core business to invest in communities, with 56 percent of companies increasing total giving from 2012 to 2014. While there were increases for a majority of companies on an individual basis, giving rates largely stabilized across the sector in the same period. This stabilization shows that the business case for societal engagement is strong, with companies increasingly seeing community investment as essential to their operations.

In particular, growth in five key indicators between 2012 and 2014 illustrate the expanding application of corporate skills and resources to solving societal challenges:

Apply the skills of the company: Leveraging employees to contribute the company's professional skillset increased: pro bono (40% to 51% of companies) and nonprofit board leadership (43% to 53% of companies) were the fastest growing volunteer programs and paid-release time was the most common (60% of companies).
Growth on purpose: Companies continued to support societal engagement activities traditionally reported in the Giving in Numbers Survey, but they also increased the number of innovations—including cross-company collaborations, new product development, and impact investing. Measurements for these novel programs are in development; in live polling at the 2015 CECP Summit, 9 out of 10 attendees indicated that companies are carrying out innovations not currently counted in Total Giving, as reported by Giving in Numbers, with 5 out of 10 reporting that it's not just some, but many companies innovating.
Measure what counts: 85% of companies measured the impact of their community programs. Companies that measured results also showed an 18% jump in giving. These companies increased total giving as a percentage of revenue from 0.11% to 0.13%.
Drive performance through purpose: Companies that increased giving by 10% or more saw a 14% median growth rate in pre-tax profits; companies with the strongest business performance grew giving by the greatest rates. Together, these findings show a relationship that is mutually reinforcing.
Elevate the role: Community investment staff size at companies was resilient, regardless of other downsizing at the company; team size stayed the same or grew for 65% of companies that decreased overall headcount.

"These five indicators confirm that companies are adding to traditional societal investment programs to become more strategic and innovative, and infuse purpose throughout the entire company," stated Daryl Brewster, CEO, CECP. "To these companies, purpose means making societal improvement an essential measure of business performance, and we call on companies to invest even more in this pursuit."

"This year's data show a corporate giving landscape that continues to evolve as it increasingly becomes a strategic imperative at companies," said Alex Parkinson, Researcher, The Conference Board. "Companies developing sophisticated corporate giving programs that utilize the full breadth of resources to expand their social impact are positioning themselves to deliver long-term value to both their shareholders and society. They are leading the charge in shifting from a short-term, financials-driven perspective to a more comprehensive long-term value proposition."

CECP, a coalition of 150 CEOs who are a force for good, conducts the annual Giving in Numbers Survey in association with The Conference Board. A record 271 companies participated in the 2015 survey.

"No longer are we simply looking at corporate societal investments going up or down as the sole indicator of how well companies respond to community needs," stated Carmen Perez, Director, Evaluation and Data Insights, CECP. "We now look at the quality of how the company applies the full scope and scale of the skills and resources corporations can uniquely leverage to solve societal challenges. While the field is innovating beyond current measures, CECP is working directly with our companies through a Next Generation Measurement project to build evaluation and benchmarking, which will truly show how things are changing."

Giving in Numbers Fast Facts:

271 multi-billion dollar companies
- Aggregate 2014 revenues (all companies): $8.3 trillion
- Median 2014 revenue (represents one company): $16 billion
- 67 of the top 100 companies in the Fortune 500 participated
- All 10 sectors represented: Communications, Consumer Staples, Consumer Discretionary, Energy, Financials, Health Care, Industrials, Materials, Technology, and Utilities
- All data were company-reported via an online 30 question survey
Growth and Performance
- Total giving grew for 56% of companies from 2012 to 2014
- Companies that increased giving by 10% or more from 2012 to 2014 showed a pre-tax profit growth rate of 14% and revenue growth rate of 8% (medians), out- performing all other companies
- The top 25% of companies based on financial performance also increased giving at the highest rates
Total Giving Levels: 2014
- Total giving: $18.5 million (median)
- Top quartile total giving: $48.9 million (minimum to be in the top 25% of companies on this measure)
- Total giving as a percentage of revenue: 0.11% (median)
- Top quartile total giving as a percentage of revenue: 0.20% (minimum to be in the top 25% of companies on this measure)
Total Giving Portfolio Breakdown: 2014
- CONTRIBUTION TYPE: 34% foundation cash + 49% direct cash (all other corporate budgets) + 27% non-cash (product, service, pro bono, and other contributions) = total giving (represents one company, average percentages)
  - 8 out of 10 companies had a corporate foundation
- CAUSE: 29% of total giving went to Education (Higher and K-12), the program area that holds the top spot. Next, 25% went to Health and Social Service programs followed by 15% to Community and Economic Development (per company, average percentages)
- EMPLOYEE GIVING: Corporate matches of employee donations were 12% of total corporate cash contributions (median)
- GLOBAL: 7 out of 10 companies gave to recipients abroad (outside corporate headquarters country)
  - Among companies that give internationally, 21% of total giving went to recipients abroad (average)
Employee Giving and Volunteering: 2014
- 6 out of 10 companies offered paid-release time volunteer programs
- 9 out of 10 companies offered an employee matching program
  - 46% of matching programs were "open" where employees could select a charitable organization of their choice
  - The bulk of matching gift dollars were given through workplace giving campaigns and/or through use of a year-round matching policy
- Average participation rate of employees volunteering one hour on company time was 30%; top quartile participation rate was 50%
Results
- The sector is increasingly measuring results, percentage of companies measuring outcomes or impacts was up: 77% to 85% from 2013 to 2014
- While 7 out of 10 companies measured societal results on at least one grant, only 2 out of 10 companies measured the business results of employee volunteering
Team Size: 2014
- Corporate societal engagement teams had 8 FTEs (median)
Partners
- Number of recipient organizations or grantees per corporate funder decreased, 520 recipients in 2012 down to 460 recipients in 2014.

2014 Giving in Numbers data was released in front of an audience of 250 corporate societal engagement professionals at the CECP Summit.

Custom analysis of the data is available to CECP-affiliated companies at no additional cost; these companies can access data through CECP's secure online portal or by calling CECP. 2014 data is now available online.

Giving in Numbers Survey respondents that are also members of The Conference Board Contributions Councils I and II, and the Global Social Investing Council, have access to proprietary benchmarking data drawn from the member companies taking part in the survey. Members can access this data by contacting The Conference Board (mailto:[email protected]).

CECP is grateful to Newman's Own Foundation, Travelers, and PricewaterhouseCoopers LLP for their support in making Giving in Numbers possible.

ABOUT CECP: THE CEO FORCE FOR GOOD

CECP is a coalition of CEOs united in the belief that societal improvement is an essential measure of business performance. Founded in 1999 by Paul Newman and other business leaders, CECP has grown to a movement of 150 CEOs of the world's largest companies across all industries. Revenues of engaged companies sum to $7 trillion annually. A nonprofit organization, CECP offers participating companies one-on-one consultation, networking events, exclusive data, media support and case studies on corporate engagement. For more information, visit http://cecp.co.

ABOUT THE CONFERENCE BOARD

The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org

SOURCE The Conference Board