2015 CECP Corporate Giving Trends Summary

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Purpose Propels Performance!

Each year, CECP analyzes corporate societal engagement surveys to discover key trends affecting business in the future and insights from CEO members. The data is collected in an annual report Giving in Numbers: 2015 Edition. This year, over 271 multi-billion dollar companies responded. Below is a summary of key points and statistics from that report.

CECP is a coalition of CEOs united in the belief that societal improvement is an essential measure of business performance. Founded in 1999, CECP has grown to a movement of more than 150 CEOs of the world’s largest companies across all industries.

 


CECP GIVING IN NUMBERS – 2015 EDITION

SUMMARY


TRENDS

  • Employees are identified as the top stakeholder influencing societal engagement decisions
  • There has been a profound shift aligning purpose with profit
  • A giving strategy does not oppose “making money”, when societal investment is incorporated into the business strategy, the whole becomes more profitable

 

  • Trends:
    • The role of CSR is moving up the company
    • Doing good beyond giving is growing too
    • Company skills are being applied to solving societal changes
    • Purpose propels performance
    • Measurement and evaluation of charitable giving results are on the rise
    • CSR is an established practice at most large companies
    • Total giving as percent of revenue remained stable from 2012 – 2014 at .13%
    • During same period 56% of companies increase giving, 36% reduced
      • Increases:
        • Due to improved tracking and result measurement
        • Employee engagement program expansion
      • Decreases:
        • Ending of multi-year giving programs
        • Changes in structure like divestiture, et
    • Customers are starting to demand socially responsible companies and will pay more for goods and services from those that are
    • Employees also want to work for socially responsible companies that offer community engagement opportunities and are willing to leave if goals do not align with their own
    • Future labor shortages will require companies to respond to social responsibility requirements
    • Corporate giving team positions remain stable even with downsizing

 

  • Future expectations:
    • 41% of CEO’s thought giving would at least remain the same
    • Giving strategies may expand to
      • Influence development of products and services
      • Address supply chain issues
      • Partner with social enterprise
      • Social impact investing

IMPORTANT FINDINGS

  • There is a burgeoning practice to involve employees in the grantee-selection process. Although this practice isn’t new, it does appear to be making a resurgence, with companies exploring ways for passionate employees to nominate, vote on, and influence the company’s nonprofit partnership decisions.
  • 78% of companies reported that they were soon likely to or already changing their matching-gift programs to increase employee participation. Changes such as increasing max matching amount, extending the offerings globally, adding an entirely new matching-gift program to a suite of employee engagement programs, upgrading software and op systems to increase efficiency, tracking, and participation.
  • Hasbro has a successful volunteer award program which incorporates recognition by the CEO along with a grant prize to the employee’s nonprofit of choice.
  • Communicating social impact can deliver customer loyalty, employee engagement, stronger relationships with influencers and regulators, and help identify partners.
    • CECP Measuring the Value has tools to help companies measure business/social impact

QUOTES

  • “Employee engagement is number one (55%) among the most valued benefits to expanding societal investments, with brand/reputation a distant second (34%).”
  • “Companies that want to attract and retain the best employees in an increasingly competitive labor market will need to use every tool at their disposal and evidence suggests that social investment programs are a key element.”
  • “Purpose and profit are in sync for so many companies”
  • “Today’s instantaneous, transparent, and hyper-connected exchange of data has spawned a new reality … where leaders in the corporate sector have committed to an enlightened self-interest in societal investment”
  • “Corporate giving is an investment, not a cost.”
  • “When corporate societal investment harmonizes with a company’s business strategy, the whole becomes greater than the sum of its parts”
  • “Applying corporate talent, diverse resources, innovation, measurement, and executive engagement to pressing community needs yields results for society and business. (The numbers prove it!) … Societal investment helps companies in myriad ways: pioneering new markets, filling R&D pipelines, fostering sustainable supply chains, attracting future workforces, mitigating material risks, elevating the ranks of employees, and enhancing positive brand reputations.”
  • “Demonstrating the business benefits of social investment is key to gaining C-suite support for greater integration into the business.”

CORPORATE GIVING

  • CEO’s are evenly split on the priority of societal engagement in business strategy
  • Median giving was .13% of revenue or just above 18.5 million
    • Companies in the top 25% of giving gave .2% of revenue or 48.9 million or more
  • 56% increased giving, 36% decreased giving
    • Why increase: improved results measurement, engagement program expansion, increased performance expectations
    • Why decrease: end of multi-year programs, changes in corporate structure, expectation of decreased performance
  • Types of giving, average across industries
    • From foundations 34%
    • Direct Cash 49%
    • Non Cash (product, pro bono, service) 17%
  • Median corporate fundraising effort results
    • 1 campaign, 28 days
    • Admin cost $74,000
    • Dollars generated for nonprofit partners $1.6 million
    • Number of nonprofits supported 5
  • Future expectations of CEO’s:
    • 41% expect giving to remain the same
    • 27% expect slight increase
    • 10% expect slight decrease
  • Focus vs expansion of giving:
    • Emphasis may be changing to focus on specific sectors or charities to emphasize significant results given these two stats:
      • Average max amount to a single sector was 46%
      • Number of grant recipients is declining while $ amounts are not
  • Measuring impact:
    • 84% measured outcomes and impacts of at least a portion of giving
    • Only 29% of respondent companies are measuring business value of volunteering
    • Inviting other departments to measure business results would allow social engagement departments to focus on measuring social impacts
    • Measuring results increases giving. Seeing results gets stakeholder buy in.
      • 18% giving growth for companies measuring social results
      • 40% giving growth for companies measuring social and business results
    • Companies are creating “success metrics” like measuring nonprofit capacity to reduce hunger or access to math programs to evaluate outcome of giving
    • The measurement requirement is growing
    • Greater success is produced when measurement goals are set up front, there is continual feedback, and requirements match size and duration of grant
    • Nonprofits don’t always have measurement infrastructure. May need dedicated measurement funding.
    • Measurement is mostly used to:
      • Determine which nonprofits to fund
      • Demonstrate outcomes to stakeholders
      • Report publicly what is achieved.
  • Who controls giving:
    • Company headquarters usually has control over tracking and reporting, budget, and approval process
    • Local offices control cause areas/grantee selection

SOURCES OF FUNDS FOR GIVING PROGRAMS

  • Funds come from headquarters, foundations, or decentralized offices – percentage from each differs by business sector. Averages across industries.
    • 43% from headquarters – giving from centralized philanthropy budget
    • 35% from corporate foundation
    • 22% from other – giving from all other offices, regions, business units, or groups outside of headquarters
  • Giving dollar value is decided by corporation or foundation
    • Median corporate approval $99,999, max in Communications sector $1,500,000
    • Median foundation approval $50,000, max in Communication sector $99,999
  • Foundations:
    • 79% of CECP companies had a foundation
    • Median giving amount was $6.5 million
    • On average, foundation cash was 34% of total company giving. Top sector breakdowns:
      • Financials 48%
      • Industrials 44%
      • Materials 36%
      • Utilities 36%
    • Five types of foundations
      • Pass Thru – majority
      • Endowed
      • Pass Thru/Endowed Hybrid
      • Operating
      • Other
    • Hybrid and Operating foundations types funneled more money to nonprofits.
    • Median foundation team size was 3 people
    • If matching is offered, companies must decide to use company or foundation cash
      • 44% used foundation cash only for matching
      • 17% used foundation and corporate funds for matching
      • 39% used corporate funds for matching
    • Companies that use foundation cash for matching give more cash thru matching
    • Companies that use foundation and corporate funds for matching give larger matches
    • If giving internationally, foundation cash is usually used if a foundation is present

VOLUNTEER PROGRAMS

  • In the US, an average of 5 different volunteer program types was offered from the below list
    • paid time release, employee-volunteer awards, dollars for doers, company wide day of service, flexible scheduling, pro bono service, board leadership, volunteer sabatical
  • 60% offered volunteer PTO
  • 58% offered volunteering to international employees with an average of 3 different program types
  • Companies reported the top three successful programs types as
    • company-wide day of service
    • dollars for doers
    • paid release time
  • Companies average a 30% volunteer rate,
    • top 25% of companies had 50% volunteer rate
  • Employers are measuring the success of volunteering by
    • analyzing retention and promotion rates of volunteers
    • comparing employee survey responses of volunteers vs non-volunteers
    • Only 29% of companies are measuring success of volunteering
  • Pro Bono skills donation type of volunteering increased the most
    • Categorized as non-cash giving valued at Fair Market value
    • To be considered Pro Bono volunteering company must staff and oversee, employees must use core skills as specified in official job description, must be provided thru third party org
    • Pro Bono performed most by Health Care and TechnologyFigure 10: All types of volunteer programs offered

MATCHING PROGRAMS

  • Average 88% of companies offered matching.
  • Median 12% of company total charitable giving is matching.
  • Business sectors where matching was a higher percentage of total charitable giving:
    • Technology – matching was 19% of cash contributions
    • Financials – matching was 16% of cash contributions
    • Materials – matching was 15% of cash contributions
  • Limits to nonprofit reach:
    • 54% limit eligible recipients
    • 46% unlimited recipients
    • Unlimited vs limited matching chosen to encourage high participation vs high awareness of company goals
    • Unlimited requires higher budgets which may explain preference for limited
    • Limited matching dollars went to: 21% to education, 34% to specific list of charities, 45% to specific cause areas
  • 71% of companies offered at least two types of matching programs. i.e. Year Round or Workplace Giving like UW
  • Year round policy – occurs year round and not part of specific campaign
      • Grew at 7%
      • Offered to 97% full time, 55% part time, 33% intl, 31% retiree, 57% board
      • 10% participation rate
      • 83% had 1:1 match, second most common was 2x employee investment is matched
      • Median cap = $5000
      • 32% targeted matches only to predetermined strategic partners or cause areas.
  • Workplace Giving Campaigns like United Way – occur for defined time period
      • Grew at 3%
      • Offered to 100% full time, 69% part time, 25% intl, 19% retirees, 28% board
      • 35% participation
      • 67% had 1:1 match, second most common was 50% of employee investment is matched
      • Median cap $10,000
      • 57% targeted matches only to predetermined strategic partners or cause areas.
  • Dollars for Doers – contribution in recognition of volunteer service
      • Grew at 9%
      • Offered to 99% full time, 60% part time, 34% intl, 20% retirees, 10% board
      • 3% participation
      • Median $10 per volunteer hour matched
      • Median cap $500, second was $1000
      • 25% targeted matches only to predetermined strategic partners or cause areas.
  • Disaster response – employees typically want company to facilitate their ability to take action with either volunteering or donations
      • Offered to 98% full time, 70% part time, 53% intl, 12% retirees, 24% board
      • 1% participation
      • Most had 1:1 match
      • Median cap $5000 but varied by severity of disaster and proximity to officeFigure 14: Matching gift programs offered by sector

GLOBAL GIVING

  • 65% of companies give internationally, allocating 21% of giving funds
  • Expansion of global giving is desired, but more as re-allocation than budget increase
  • international giving less of a percentage of international revenue than domestic giving
  • Much initial international giving was result of international disaster relief and continues to pertain to disaster relief
  • Larger international giving occurs in Community/Economic Dev and Environment sectors
  • Giving internationally may be assisted by intermediaries
    • 18% used intermediaries for all funds
    • 47 % did not use
    • 22% used for some funds
  • CECP is creating a Global Guide standard in 2016 to define valid recipients of global giving. The requirements are:
    • Formally organized
    • Charitable purpose
    • Does not distribute profits
  • Locations:
    • Asia received 7% of total giving
    • Europe received 5% of total giving
    • Latin America received 4% of total giving

GIVING SECTORS

  • Giving highest in these sectors:
    • 29% education
    • 25% health and social services
    • 15% community and economic development
  • Certain industries give more than average to certain sectors
    • Communications industry gave 39% to education, average 17%
    • Health care gave 64% to Health/Social services, average 26%
    • Industrials gave 12% to Civic/Public Affairs, average 5%
    • Utilities gave 10% to Environment, average 4%
  • Consumer Staples industry gives most of all sectors
  • Average max amount to a single sector was 46% and number of grant recipients is declining signaling emphasis on depth not breadth of giving with corresponding emphasis on significant results.
  • Non cash contributions led by Communications, Health Care, Consumer staples, Technology
    • Tech non cash contributions can be coordinated directly or by third parties like Direct Relief, Idealware, Good360 and TechSoup.

EMPLOYEE GIVING

  • Employee giving excluding employer matching is called “philanthropic leverage”
    • Includes employee donations and employee solicitations from businesses etc
  • Employee giving is not always matched
  • Median dollar amount given per employee $88, max $345 (in Energy industry)
  • Companies encourage employee giving
    • Median amount raised thru payroll deduction $1.7 million
    • Median amount raised thru other employee contributions $674K
    • Median number of non profits supported 500
  • Payroll deduction giving is declining
    • Giving thru payroll deduction decreased 3% 2012 to 2014 maybe due to pursuit of goals below
  • CEO’s named employees as top stakeholders influencing societal engagement. 78% reported changes or expectation of changes to matching programs to increase participation.
  • Two common goals of employee giving:
    • Increase participation – meet millennials desire for flexibility
    • Make giving more efficient – expand to global workforce
  • Millennials will be 50% of workforce by 2024 – Gartner and Amy Lynch
    • “Millennials don’t only demand to know the organization’s purpose but are also prepared to leave the firm in that purpose doesn’t align with their own values.” – Robert E. Moritz Chairman and senior partner PwC
  • There will be shortage of skilled workers worldwide. Companies need to use every tool at their disposal to compete in the labor market, and societal investment is one such tool. – The Conference Board’s report From Not Enough Jobs to Not Enough Workers: What Retiring Baby Boomers and the Coming Labor Shortage Mean for Your Company

IMPACT OF GIVING ON COMPANY PERFORMANCE

  • Companies most deeply invested in giving also saw the most robust financial performance.
    • Increased giving 10% or more last 3 years
      • revenue increase 14% vs 9% for other companies
      • pretax profit increase 9% vs 2% for other companies
  • 84% consumers think business can perform well AND do good – 2015 Edelman Trust Barometer
  • 55% of customers will spend more on products from socially responsible companies – Nielsen
  • Revenue from sale of sustainable products growing
    • 21% of total revenue in 2013
    • Grew 6 times faster than other revenue between 2010 and 2013
    • Strong social responsibility foundations are essential to successful launch and growth of sustainable products.
  • Investments in purpose-driven companies outperformed more traditional investments in the last 10 years.
    • $1 invested in “high-sustainability firm” in 1993 would be worth $22.60 vs. $15.40 for traditional firm – Bob Eccles and George Serafeim of Harvard Business School
  • Communicating social impact can deliver customer loyalty, employee engagement, stronger relationships with influencers and regulators, and help identify partners.
    • CECP Measuring the Value has tools to help companies measure business/social impact
  • Societal investments correlate with financial performance
    • Purpose-driven companies have outperformed the market five-fold during the past 10 years – Raj Sisodia in Firms of Endearment
    • Positive impacts to brand recognition and reputation, developing human capital, mitigating risk particularly in the supply chain, informing the development of new products and services.
  • Evidence is growing to support purpose-driven companies are better poised for growth
    • Go for long term outlook rather than short term share prices – Conference Board report Short Term Behavior Jeopardizing the Future of Business?
  • During downsizing, giving remains steady to maintain employee engagement and company performance

ORGANIZATIONAL CORPORATE GIVING TEAMS

  • Old terms: philanthropy and foundation
  • New terms: citizenship, community, social/societal investment
  • Field is growing, up 6% in last 3 years
    • Communications industry has highest number of giving workers
  • Giving teams report to:
    • Public Affairs, Communications or Marketing – if brand recognition or reputation is goal
    • Legal
    • Human Resources – if engagement is goal
  • Corporate giving is integrating more deeply within companies
  • Corporate giving teams are stable positions despite downsizing
  • Corporate giving officers are being elevated to the C-Suite because of their knowledge of community issues, ability to engage stakeholders, and knowledge of how to socially motivate employees

GIVING TRENDS

  • Giving focus areas align with business goals
    • Cisco – Pediatric health
    • Citigroup – financial inclusion
    • ConocoPhillips – water conservation
    • New York Life – childhood bereavement
    • PepsiCo – Save Water Access
    • PwC – Earn your Future youth literacy
    • John Deere – local farming

All statistics and tables from CECP 2015 Giving in Numbers Report

 

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