Corporate Foundation Giving Showing Signs Of Life

Giving by the nation’s approximately 2,700 grant-making corporate foundations grew to an estimated $5.2 billion in 2011, up 6 percent from 2010. Adjusted for inflation, corporate foundation giving increased 2.8 percent in the latest year. By comparison, overall foundation giving declined slightly after accounting for inflation.

At the same time, estimated giving by U.S. community foundations was basically unchanged during 2011, following a less than 1 percent increase in 2010. Community foundation giving has remained flat for the past three years, hovering at roughly $4.2 billion.

Those are some of the recent statistics from the Foundation Center in New York City. According to the Foundation Center, corporate foundation giving has rebounded more quickly from the economic downturn than giving by independent and community foundations. Despite continued economic volatility, corporate profits have been at record levels, leading corporations to put more resources into their foundations. In 2010, for example, gifts into corporate foundations increased more than 36 percent to $5.4 billion.

Slightly more than half (53 percent) of corporate foundations responding to the Foundation Center’s annual forecasting survey reported expectations their giving would increase in 2012. About a third of these funders anticipate giving increases exceeding 10 percent.

Compared to community and independent foundations, the larger corporate foundations included in the Foundation Center’s 2010 grants sample were more likely to allocate funding for human services and far more likely to allocate funding for public affairs/society benefit.

Much of the larger share of support for public affairs/society benefit reflected giving for philanthropy and voluntarism, including federated funds. By types of support, corporate foundations favored program support, followed by general operating support — consistent with giving patterns of community foundations, according to the Foundation Center.

Corporate giving as a share of companies’ pre-tax profits — excluding giving by corporate operating foundations — reached a record 2 percent in 1986. Following that peak, corporate giving fluctuated between 1 and 1.6 percent of pre-tax profits until 2004, when the share had dropped to below 1 percent. As of 2010, the share remains slightly below 1 percent, according to the Foundation Center.

Outlook for Community Foundation Giving

Prior to the recent recession, community foundations typically reported faster rates of annual growth in giving than independent or corporate foundations. While it might appear that this trend has reversed in the past couple of years, in reality many community foundations are reporting growth in funding. In fact, community foundations responding to the latest “Foundation Giving Forecast Survey” reported a median increase in 2011 giving of just over 5 percent. However, a handful of the largest community foundations reported substantial reductions, which kept overall giving flat.

Community foundations may begin to show stronger overall growth in giving in 2012. According to the Foundation Center’s latest “Foundation Giving Forecast Survey,” close to half of community foundations (45 percent) anticipate increasing their giving this year. Of these foundations, more than two-fifths estimate giving increases of 10 percent or more.