The Giving Tree: The State of Corporate Philanthropy

514px-andrew_carnegie_three-quarter_length_portrait_seated_facing_slightly_left_1913The annual Giving in Numbers report reveals corporate philanthropy is on the rebound. But when it comes to giving, money's not everything

In 2009, companies reported the biggest retreat in corporate giving, which wasn't really a surprise, considering that was the year that the United States economy was at its most perilous state since the Great Depression. But corporate philanthropy has rebounded strongly, with 60 percent of companies reporting increased giving levels in 2011 to reach a median total giving of $21.2 million, according to the annual Giving in Numbers: 2012 Edition report. Issued by the Committee Encouraging Corporate Philanthropy (CECP) in association with the Conference Board, the report, now in its eight edition, is the field's leading analysis of corporate giving. Last year, total giving increased across all industries, with the Consumer Staples and Health Care sectors at the top of total giving growth.

"Giving in Numbers is the home, year after year, for the most comprehensive account of corporate societal engagement, which comes directly from company-provided data," said Charles Moore, CECP's executive director. "Our analysis this year shows that companies are becoming more focused about their giving: from larger grants to a smaller number of organizations; to giving where they have community connections; to using the skills and expertise of the business to build their community engagement."

With more than 180 global CEOs and chairpersons of companies that together account for over 40 percent of reported corporate giving in the United States, the CECP is the only international forum of business leaders focused exclusively on increasing the level and quality of corporate philanthropy. The Conference Board is a global independent business membership and research association providing research on corporate philanthropy, citizenship and sustainability.

FORTUNE 500 GIVES BACK

Giving in Numbers is based on data collected by the 2011 Corporate Giving Survey (CGS), which was completed by 214 companies, including 62 of the top 100 firms in the Fortune 500. The cash and product giving of all respondents totaled more than $19.9 billion.

Some of the report's key findings:

- Median total giving in CECP's sample was $21.02 million
- 60 percent of companies gave more in 2011 than in 2009
- 83 percent of companies offered at least one matching gift program
- 85 percent of companies had a formal domestic employee volunteer program; 47 percent had a formal international volunteer program
- 82 percent of companies reported having a corporate foundation
- Health, education and community and economic development were top priorities for the typical company
- 46 percent of total giving was through direct cash

"Corporations did not simply react to community needs; CGS data show that companies became more thoughtful about their approach to funding, through fewer grants, yet higher grant amounts," write Moore and Jonathan Spector, the president and CEO of the Conference Board, in the report's preface.

"Companies focused on fewer, and in many cases, a single issue area, such as education. The data also show that companies sought to focus on the workplace, not just the marketplace. Employee matching-gift and engagement programs were high priorities, and, following significant revenue growth abroad, employees became engaged in the global communities in which they worked."

PAUL NEWMAN: NOTHING NOBLE ABOUT PHILANTHROPY

The CECP was founded in 1999 by actor and philanthropist Paul Newman. In 1982, he made headlines when he founded the food company Newman's Own, which donates 100 percent of proceeds after taxes to various educational and charitable organizations of Newman's choosing.

In an interview in the magazine Film Monthly, he explained his feelings about giving:

"The concept that a person who has a lot holds his hand out to someone who has less, or someone who isn't hurting holds his hand out to someone who is, is simply a human trait that has nothing to do with celebrity. I am confounded at the stinginess of some institutions and some people. I'm bewildered by it. You can only put away so much stuff in your closet. In 1987, the average CEO against someone who was working in his factory was 70 times. It's now 410 times. If you eliminate the middle class, which we are slowly doing, incidentally, Aristotle said the greatest government is the government that has the least number of people on each end. It makes sense. So, I don't think that there's anything exceptional or noble in being philanthropic. It's the other attitude that confuses me."

INCREASING INCOME GAP: THE PLUTOCRACY STILL REIGNS

That interview was in 2002. And today, the income gap between rich and poor is worse. Last year, Altera CEO John Daane saw his total compensation jump 278 percent to $29.6 million. Apple executive Tim Cook enjoyed a pay increase of 540 percent to $378 million. And Disney's Robert Iger had the third-biggest paycheck in 2011 with a total pay package of $31.4 million. His pay has increased 45 percent over the past two years.

"The most troubling economic trend facing America…is the increasing concentration of income, wealth, and political power at the very top—among a handful of extraordinarily wealthy people—and the steady decline of the great American middle class," writes former Treasury secretary Robert Reich in a recent blog post on The Huffington Post. "Inequality in America is at record levels. The 400 richest Americans now have more wealth than the bottom 150 million of us put together."

While it is far from the answer to achieving economic equality for all segments of society, philanthropy—both corporate and individual—is an important piece of the puzzle. Last month, Warren Buffett convinced 11 more billionaires to give away half of their wealth to charity as part of the Giving Pledge, a philanthropic initiative he started with the Bill and Melinda Gates Foundation that has recruited 92 billionaires in the two years since it was launched to pledge their fortunes early in life so that they can be more involved with how the money is spent.

ENLARGE THE SCOPE OF GIVING: MONEY'S GOOD, BUT IT'S NOT EVERYTHING

Buffett said that he and his wife Susie "agreed with Andrew Carnegie, who said that huge fortunes that flow in large part from society should in large part be returned to society."

Of course, philanthropy helps drive positive social change, but the concept of giving doesn't have to be all about cold, hard cash. As entrepreneur and philanthropist Tim Ferriss pointed out a blog post entitled "Should I Wait Until I'm Rich to Give Back?":

"Changing the world doesn't require much money. Again, think in terms of empowerment and not charity. How much were Gandhi's teachers paid? How much did it cost to give Dr. Martin Luther King the books that catalyzed his mind and actions?"

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NOTES

Conference Board. Majority of Companies Increased Giving; Adopted a More Targeted Engagement Approach. October 11, 2012. Accessed October 25, 2012.
Committee Encouraging Corporate Philanthropy. Giving in Numbers - 2012 Edition. October 11, 2012. Accessed October 25, 2012.
Paul Newman. Paul Newman's Road To Glory -- Interview by Paul Fischer. Film Monthly. July 1, 2002. Accessed October 25, 2012.
Matt Krantz and Barbara Hansen. CEO pay rises again in 2011, while workers struggle to find work. USA Today. March 29, 2012. Accessed October 26, 2012.
Robert Reich. Labor Day 2012 and the Election of 2012: It's Inequality, Stupid. Huffington Post. August 31, 2012. Accessed October 25, 2012.
Eleanor Goldberg. Warren Buffett, Bill Gates' 'Giving Pledge' Gets 11 More Billionaires to Pledge Half of Wealth. Huffington Post. September 19, 2012. Accessed October 25, 2012.
Warren Buffett. A conversation with Warren Buffett -- Interview with Carol J. Loomis. CNN Money. June 26, 2006. Accessed October 25, 2012.
Tim Ferriss. The Karmic Capitalist: Should I Wait Until I'm Rich to Give Back?. October 4, 2007. Accessed October 25, 2012.

image: American businessman Andrew Carnegie spent his final years as a major philanthropist, notably establishing a number of public libraries throughout the United States and the United Kingdom. (credit: Theodore C. Marceau, Library of Congress, Wikimedia Commons)

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