Who Benefits?
Corporate philanthropy is on the rise, and there is good reason for this. Not only does the recipient of the charity benefit, the corporation also gains a lot, not the least of which is employee satisfaction and loyalty. Corporations are in a position to make a big positive impact on the community in which they operate. They often support the local schools, participate financially in local activities and events and generally upgrade the community.
In return, they gain a well-educated work force, brand recognition and a good reputation. All of which is good for business. In many cases they also get tax relief.
Research has shown that employees are more loyal and have better job satisfaction when they work for a company that participates in philanthropic work. In many cases, employees are given the opportunity to donate directly from their paycheck.
Types of Corporate Giving
Corporations can give direct contributions of money after profits. The more successful the business, the more it can give. These charitable giving programs improve their competitive position and enhance financial performance. Giving can take the form or direct dash, foundation grants, stock donations, product donations, service donations, employee time and other gifts in kind. Whether the business is a large multinational or a small local business, they get the same results. It’s important for corporate giving to be highly visible, to have the best effect on the bottom line.
The Perceived Downside
Some people criticize corporate giving because they say it just serves the CEO or board of director’s personal or family charities. Shareholders may complain that giving takes money from the before-dividend profits, reducing the amount they receive.
But statistics show that this is a myth. Most corporate giving has no personal strategy to benefit the company, but is primarily aimed at generating goodwill and employee morale. One of the most popular forms of corporate giving is matching grants. The choice of the charity is left to the individual and supported by the company with a matching grant. Employees usually get a tax deduction for their donations. A large percentage of employees say they prefer charities that support children.
There Are also Human Resource Benefits
Companies that have a reputation for corporate giving, attract better talent. According to statistics, young, well-educated job seekers are five times more likely to reject an offer from a company with a bad reputation. Those candidates who will accept a job offer will ask for a 50 percent pay increase.
Disengaged and unhappy employees cost U.S. businesses more than $350 billion every year. This can easily be reduced by engaging in philanthropic activities. Employees who participate in corporate charity campaigns have a higher engagement level than those who don’t.
Corporations gave more than $400 million in 2012 to social, environmental and community philanthropic programs as well as to promotion of entrepreneurship. Fighting world hunger and helping after a major natural disaster are two of the biggest areas that receive donations.
