Corporate philanthropy has always been part of the business landscape, but in recent years it’s become an even larger endeavor for many companies and the executives who lead them. This is good news for the many nonprofits, charities and community-based initiatives that depend on this level of support to continue operating.
Last year, corporate giving rose by 3.2%, and another 2.6% increase is expected this year. The increase is likely due in part to the ease with which corporate philanthropy can take place. Also, there are new trends in giving.
One relatively new option is impact investing, which encompasses investments made in companies, funds, or organizations to create social impact in addition to generating revenue. In addition, it’s been noted on a number of occasions that many of today’s employees are looking at companies’ track records in supporting charitable initiatives as part of their process to decide whether they want to join an organization.
Customers like to support companies that give back as well. According to Wayne Elsey, CEO of Elsey Enterprises, “Therefore, it makes business sense and can positively impact your bottom line to think about how to become philanthropically engaged in your community if you haven’t done so already.”
For many corporate-level executives, both corporate and personal philanthropy is simply part of their makeup. Chicago executive Thomas Kane has been giving back for years, both as a corporate leader as well as an individual who supports initiatives that resonate personally with him, and he says that the need for corporate philanthropy is skyrocketing.
Many executives feel the same way.
When his former company Salesforce.com was still new, former CEO Marc Benioff established a company foundation and created a 1:1:1 model that defined its corporate giving. The company would donate one percent of its stock to the foundation to be used for grants, one percent of its profits to the community through product donations, and 1 percent of employee work hours to community service.
He was later quoted as saying that, “Building the foundation from an intellectual idea to a practical reality that has served 100,000 people in need has been one of the most rewarding [experiences of my life]. I have received the most remarkable opportunity to lead an organization that makes ‘doing good’ an integral part of doing well.”
It’s pretty evident when you watch or read the news, whether local, national or global, that there are needs everywhere. With all the problems in the world and the types of charities or programs a company can support, how can you determine where to pledge your dollars or your time? Many business leaders believe that a good place to begin is in your own backyard. It’s easy to find crucial needs no matter where you look, and there are probably local organizations or initiatives that would love to have your support. Secondly, consider why you’d select that organization as your recipient. Tom Kane, mentioned above, is very active with providing educational opportunities to those in need.
Matthew Capala, founder and managing director of search firm Alphametic sees it this way: “Your mission should align with your chosen nonprofit, you should have the financial security of the nonprofit 501(c)(3) status, and you should plan involvement. If you passively give income or you would like to incorporate a nonprofit as part of your company culture, proximity is key.