The Softer Benefits of Corporate Giving

Have a favorite charity or non-profit community cause to which you contribute time and resources? Chances are your company will be interested in supporting it, too.

According to the Giving USA 2004 study released by the Giving USA Foundation in the summer of 2004, American individuals, estates, foundations, and corporations gave an estimated $240.72 billion to charitable causes in 2003. In the US, during the five years spanning 1998-2002, corporations contributed $55 billion, (5%) of the total $1135 billion. Corporations also gave through foundations, which contributed an additional $121 billion (11%) of the five-year total.

People tend to be aware that there are financial benefits to corporations for donating to charities and that corporations want to be good, forward-acting citizens. What people–and many organizations–don’t realize yet is that there are still other motivators and benefits for corporate giving. The fact is, increasing numbers of corporations are extending the benefits of their corporate giving activities by leveraging them as team-building programs and employee support initiatives that increase even further the benefits these activities bring to the company itself.

For example, Marjorie Polycarpe in a December 2003 article Re-Examining Workplace Giving Programs, she quotes the manager of the employee giving campaign at American Express, Angela Woods, who discussed how her company involved employees early on in their planning process for corporate giving activities to help guide their choices for charities. Getting employee input helped American Express identify the causes and charities that were most important to their employees.

This approach helps organizations communicate to their employees that they respect and support their employees’ donations of personal time and resources. It also helps companies demonstrate that support, by forming foundations, contributing cash, in-kind gifts, and/or matching programs, and encouraging other employees to get involved in particular causes and facilitating their involvement.

When companies form foundations, they establish organizations focused on giving to a particular cause or which is authorized to contribute to approved organizations.

Companies can also contribute cash gifts directly to charitable organizations.

When companies donate non-cash resources, these are called in-kind gifts. In-kind gifts can be products that the company produces, moved out of its inventory, or they can be other items that the charity can use, such as furniture, computers, food, etc. When companies contribute the services for which they normally charge clients, for example, marketing or legal services, these in-kind gifts are called pro bono donations.

To help support charities that their employees contribute to or to encourage employees to contribute to charities already supported by the organization, companies can enable donations to come directly from the employee’s payroll check. Frequently when such systems are in place, they are part of a company matching program which has the company match or exceed by some percentage, cash donations made by the employee. So, for example, if an employee contributes $50 per pay period to an authorized charity, the company would contribute $100 per pay period in a 2:1 program. The company would be contributing in a similar manner to all of the other employees in the program.

Companies are finding that this sort of support, in addition to public recognition and praise of employees who donate their time and personal resources to various causes, helps them communicate to employees that they are valued as individuals. It also provides a forum through which the company can show appreciation to the employee for the benefits it receives through the positive association with the employee.

According to Kurt Rechner, President and Chief Operating Officer of Tejas Securities Group, Inc., “Tejas Securities contributes regularly to charities as a way to give back to our community and to show support for our employees and the companies with which we do business. For example, we’ve made contributions to the Children’s Medical Center Foundation of Austin, the Austin Film Society, and Meals on Wheels, each of which provides wonderful benefits to the people in and around our home base of Austin, Texas. In addition, we recently learned about the great work being done by Big Brothers of Massachusetts, and we made contributions to that organization as well. I think it’s important for companies to openly communicate with their employees and business partners about their corporate giving activities. By sharing information, the employees feel valued, the organization learns about good organizations that need its support–and it creates a win: win all the way around.”

Companies frequently find themselves contributing around themes. Some, for example, find their employees tend to want to support health-related causes, such as Breast Cancer Research or Alzheimer’s research or other causes that may have affected families and friends. Other organizations find their employees gravitate towards education-related initiatives, such as the TJ Ford Foundation and Reading Is Fundamental. And many organizations find themselves contributing to organizations that help support children, especially organizations that provide esteem-building like Big Brothers/Big Sisters and those helping children with special needs, such as Special Olympics and Make a Wish Foundation.

With good causes being a good rallying point for boosting morale, many organizations use their corporate giving programs as team-building tools to help unite their workers around a common charitable cause. They find that uniting workers for an outside cause helps reinforce their ability to work together for the companies’ good as well.


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