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Study: Corporations Plan To Hike Giving In 2014

By The NonProfit Times - October 9, 2013

Of Fortune 500 companies that make charitable gifts internationally, 81 percent either increased or maintained giving levels this fiscal year, and 86 will either maintain or increase giving levels next fiscal year. Local communities’ needs was the most influential factor for giving, cited by 78 percent of survey respondents, followed by the company’s business operations or financial performances, at 52 percent.

Those were some of the results from a study commissioned by Alexandria, Va. nonprofit Global Impact and carried out by the Lilly Family School of Philanthropy at Indiana University. The report, titled “Giving Beyond Borders: A Study of Global Giving by U.S. Corporations, looked at data from the top 100 Fortune 500 companies, and administered a survey to 59 companies, according to Una Osili, Ph.D., director of research at the Lilly Family School. Not all respondents answered all survey questions. The research was conducted between January and August of 2013.

“U.S. companies are engaging globally,” said Osili. “They’re doing this for many different reasons, but they’re trying to meet and fulfill business obligations while responding to the needs in local communities. Many companies plan to increase giving overseas over time.”

Some 27 companies reported foreign donations, with 19 percent giving only to developing companies. Asia and the Pacific region saw the most donations, with 70 percent giving there. Canada was next, at 63 percent, followed by Latin America and Africa, both at 59 percent. Osili said this was a function of where companies are expanding their operations. “Asia is an area of growth, and companies are expanding their business operations to Asia more broadly,” she said.

Respondents from roughly one in five companies said the firms would expand their giving to more countries or regions during the next fiscal year, with 60 percent maintaining their current geographic focus. The study found that 60 percent of companies give globally or without geographic focus, while about one-quarter gave in a highly focused manner to one or two geographic regions.

Education was the top focus, with 69 percent of companies giving to education-focused nonprofits. Next were disaster relief, recovery and preparedness organizations, with 58 percent of companies giving in that area, followed by human services and public and society benefit, both at 55 percent.

Companies need help focusing their dollars, according to the study results. Half of the survey respondents said vetting of nonprofits and facilitation of partnerships with international nonprofits is a valuable service, and 46 percent said an employee engagement strategies is important. “As companies think about extending their corporate giving beyond national borders, they also have to think about vetting (international) organizations,” said Osili. “We also see that companies are very interested in using corporate giving to strengthen employee engagement.”

The study revealed that companies want to partner with nonprofits aligned with their business focus. Nearly all respondents — 95 percent — said their top goal of philanthropy is supporting the company’s mission and values, and 91 percent said giving back to communities where the company operates is a top goal. More than three-quarters, or 78 percent, said a top goal is building and enhancing corporate reputation.

Similarly, companies partner with nonprofits based on alignment with the nonprofit’s mission and the company’s philanthropic values, with 77 percent saying that is an important factor. Some 68 percent of companies said a nonprofit’s effectiveness and efficiency was a key determinant. A nonprofit’s accountability was rated highly by one-quarter of respondents, and the nonprofit’s reputation by 17 percent. “Companies are interested in nonprofits that have a track record of demonstrating impact,” said Osili.

Osili said she found an even mix of nonprofits reaching out to companies for partnership and corporations making the first move. Nonprofits that want to be proactive are encouraged to do their homework, said Osili. Talk to a corporation’s public affairs department to make sure your goals align before sending a full proposal. “If it’s a nonprofit that reaches out to a company, they have to do their due diligence to make sure their goals align with the company’s goals,” she said.

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