Leading Study In Corporate Societal Engagement Shows Considerable Growth Since 2007

World's Largest Companies are Transforming Giving; Engaging Employees in Community Efforts

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Jun 04, 2013, 10:00 ET

NEW YORK, June 4, 2013 /PRNewswire/ -- While economic recovery is taking its time, companies have not waited to rebound with their giving programs; the majority of companies increased giving since 2007 after adjusting for inflation, despite a slow recovery of corporate profits since the economic downturn. Both cash and non-cash giving increased during this timeframe, with a higher percentage of non-cash contributions in 2012 defining the post-recession giving era. In addition, companies offered more paid-release time and outside-company time volunteer programs to engage employees in their giving programs, and the largest percentage of a typical company's giving budget went to support K-12 and higher education programs. CECP, where Fortune 500 CEOs turn to achieve societal progress and sustainable business performance, released at the CECP Summit the first analysis of 2012 corporate giving data drawn from its Corporate Giving Standard (CGS) survey, conducted in association with The Conference Board.

"Noncash giving is defining the new corporate societal engagement," stated Daryl Brewster, CEO, CECP. "This has major implications for NGOs all over the world. From employees coming in to solve efficiency challenges, to product donations that enable important capacity upgrades, community partners and businesses around the world are working smarter, together."

A record number of 240 companies participated in the 2013 survey; 96 of these companies participated from 2007 to 2012 creating a distinctive matched set that allows for comparisons to pre-recession giving practices and a deeper look at cash and product giving from some of the world's largest companies.^[1]

"The trends we're seeing in the numbers are aligning with the way companies are doing business in this post-recession economy," stated Jon Spector, President and CEO, The Conference Board. "Companies today are striving to be sustainable and efficient in their daily operations, and they are doing no less in their efforts to solve some of society's toughest challenges. They are applying the best of their businesses' assets to tackle these tough issues."

Fast Facts

Total giving increased for 59 percent of companies from 2007 to 2012, with 38 percent of all companies increasing their giving by 25 percent or more.
Aggregate corporate giving rose 42 percent ($4.48 billion) from 2007 to 2012 in inflation-adjusted dollars.
The comprehensive 2013 survey had a record number of 240 participants, reporting more than $20 Billion in total contributions.

Major Findings

Noncash Giving Defined Post Recession Giving

Noncash contributions as a percentage of total contributions grew in aggregate from 57 percent in 2007 to 69 percent in 2012. Pharmaceuticals companies account for the majority of non-cash giving—excluding Pharmaceuticals companies from the analysis shows a similar trend with all other companies increasing non-cash giving from 28 percent (2007) to 39 percent (2012) of total giving.
Non-cash includes product donations and other services, such as excess inventory, pro bono service, use of company facilities, intellectual property, land, and other asset donations.

Companies are Engaging Employees in New Ways

Since 2007, the percentage of companies offering paid-release time volunteer programs increased from 53 percent to 70 percent. Matching gifts programs evolved as workplace giving campaigns and disaster relief matching gifts programs became more popular from 2007 to 2012.
Included in noncash findings, pro bono service values are now being reported by more companies; approximately half of responding companies offered a pro bono program in 2012.

Companies Prioritize Program Areas

For the first time since CECP began reporting Giving in Numbers in 2006, giving to higher education and K–12 schools combined to become the top program area for all companies, commanding 29 percent of the typical company's programmatic allocation.^{^[i]}
Health and social services programs remained a top focus area for companies, with 28 percent of the allocation in 2012. These allocations differ considerably by industry.

Reasons for changing giving levels

Giving professionals cited numerous factors for increased corporate giving from 2007 to 2012. Common reasons for changes in giving throughout this timeframe include:

Improved profits: While there isn't a perfect correlation between profitability levels and giving, the two often relate, even if there is a one- or two-year timing delay. Some companies are targeting giving one or more percent of pre-tax profit and are gradually moving toward that level.
Combined budgets from mergers and acquisitions. In 2012, 9 of the 96 companies in the matched set had a merger or acquisition, which can dramatically increase a company's giving budget.
Increased corporate foundation endowments due to rising stock market.
Excess inventory, which created more product available for donation.
Launch of new signature programs, which "unlocked" a higher level of giving.

Companies that decreased giving from 2007 to 2012 often cited declining profits as a main reason for lower giving levels.

The median pre-tax profit for the matched set of companies decreased from $3.8 billion in 2007 to $2.8 billion in 2012, after adjusting for inflation.
Other common reasons for decreased giving include company-wide cost reductions, the return to prior giving levels following a one-time significant gift in the previous year, and corporate spinoffs.

Predictions for 2013 corporate giving
All companies were asked to predict how 2013 contributions will change compared with 2012. Among companies that made a prediction,^[ii] 40 percent expect an increase in funding, 42 percent expect no change, and 18 percent predict a decline.

Giving in Numbers
Each year, in association with The Conference Board, CECP presents an in-depth analysis of the results of an annual survey of corporate philanthropy trends in the publication, Giving in Numbers, which is released free-of-charge to the public each fall. The report answers pressing questions about the state of corporate giving, rates of giving internationally, a discussion of the motivations for giving, employee engagement, and more.

About the Corporate Giving Standard Survey
The Corporate Giving Standard (CGS), conducted by CECP in association with The Conference Board, is an online philanthropy measurement and benchmarking tool for participating companies. All figures referenced are inflation-adjusted and based on a matched-set of 96 companies responding to the CGS survey 2007-2012. This matched-set of companies combined to give a total of 15.27 billion in cash and product giving in 2012, the most recent year of data available anywhere.

About CECP
CECP draws together and empowers senior executives of the world's leading companies to achieve unprecedented progress on societal challenges while driving business performance.
HTTP://CECP.CO

About The Conference Board
The Conference Board is an 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

[1] Survey results reveal that median revenues for these companies were $29.8 billion in 2012, while median revenues for the entire Fortune 500 list were approximately $10.8 billion that year.

[i] The sample size was 172.

[ii] The sample size for this response was 139.

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