Corporate giving trends and best practices
Philanthropy is most commonly associated with individual giving. However, the philanthropic efforts of corporate America are growing.
Corporate giving in the United States directly correlates to the change in real gross domestic product (GDP). Since the 2011 recession, corporate giving has increased every year, including 4 percent in 2015 and an expected increase of nearly 5 percent in 2016, according to The Philanthropy Outlook, a report from Indiana University-Perdue University Indianapolis
Corporate giving is measured in both cash and non-cash contributions as reported by the IRS. However, some of these philanthropic efforts are not measured by the IRS, such as volunteering efforts, partnerships and other programs that allow corporations’ employees to be engaged with their local communities and charitable missions.
One reason corporations are becoming more philanthropic is tied to the changing workforce demographic. Millennials, defined as ages 20 to 35 years old, make up the largest generation in the American workforce. As such, they are quickly gaining influence over corporate culture. The result is corporations need to find ways to meet millennials’ needs, which are centered on engagement — millennials want to make a difference. This brings us full circle to corporate philanthropy. Employers need to tailor their corporate giving model to attract and retain the millennial workforce.
New giving channels are emerging in corporate philanthropy. Corporations are implementing various programs and activities to engage their employees in local communities and with other nonprofit organizations. Many corporations are starting their own foundation as a channel of philanthropy. Corporations also are closing their doors for a “Day of Service” to spend the day in the community. Not only does this give their employees the benefit of giving back, but it is also a great team-building exercise.
A tertiary effect of these large volunteer events is public relations. Organizing these events on a large scale can draw a lot of positive media attention to a corporation. However, it is important for corporations to allow their employees to contribute to their own causes. Pushing the corporate giving agenda alone will not keep morale high — the philanthropic efforts must be authentic. There needs to be time and opportunities for both professional and personal philanthropy in the workforce.
Corporations also are partnering with nonprofit organizations. Doing this normally has both financial and nonfinancial components. Partnering with a nonprofit tends to have the largest impact, as there are contributions of man-hours to go with financial contributions. However, with such a narrow focus, there may not be a full workforce buy-in. To mitigate the situation, corporations are creating committees to oversee philanthropic efforts. Having a committee comprising an eclectic group of employees covering all demographics can help build buy-in. Lastly, partnering with a nonprofit can make a big difference, including a tangible difference, and that is a winning situation for the nonprofit, the corporation and its workforce.
Another trend that is becoming more widely accepted is a corporate giving match. For every dollar an employee donates to a charity, the corporation matches the contribution. Individual giving can also be set up through payroll deductions or completed online. MillenialsMillennials donate quite differently than other generations. It is very difficult to get a $1,200 contribution outright from a millennial. However, a millennial can contribute $50 a month through payroll deduction with a corporate match, and he or she can make the same impact and feel like they made a difference.
Corporations also are implementing many of the 21st century giving tactics that many nonprofits have come to master. One example is athe “tText to gGive” drive at corporate events or on certain days, much like the American Red Cross holds after catastrophic events. Having these types of fundraising drives is particularly appealing to millennials, as it is quick, all-digital, and convenient. Another tactic is a competition where corporations hold a philanthropic competition where top performers “win” corporate contributions made to a charity of their choice. You will know you have your employees engaged when they start sharing their philanthropic efforts at work on their personal social media channels.
Although GDP is a prominent indicator of corporate giving, 2017 holds an abundance of philanthropic uncertainty with significant corporate and individual tax change propositions, among other related proposed legislative changes. However, one thing is certain — philanthropy in corporate America is changing and will continue to change as the preferences of the people who are giving continue to shift. The bottom line is that corporations must keep up with financial and non-financial giving trends to attract and retain the employees of the future.
Bo Garner, CPA, MBA, is an assurance manager at PBMares LLP and is co-leader of the firm’s notor-profit team. Bo is a member of the Virginia Society of Certified Public Accountants (VSCPA). For more information, please contact the author at [email protected] or visit our website www.pbmares.com.