What the Giving USA 2011 Report Means for Corporate Strategy

This week the Giving USA Foundation released it’s latest report Giving USA 2011: The Annual Report on Philanthropy for the Year 2010.  In this post we look at what this means for corporate giving and what companies can do about it.  There have been plenty of articles and posts covering the “what”, so we’re going to focus on the “so what” (the implications for companies).

The “So What”?  What The Giving USA 2011 Report Means for Corporate Giving
We know that total giving was up - despite the economy – that corporate giving was up (meaningfully over the 2008-2010 period), that volunteerism was up significantly, and a bunch of other interesting statistics.  So what are the implications of the new giving data?  Here are our top takeways and implications for corporate strategy around giving:

Companies can do (way) more
Corporate giving makes up 5% of total charitable contributions. Is it just us, or does this seem waaay low? 
This also seems pretty incongruent with the increased expectations that people have about companies helping to solve social, environmental and economic problems.  A whack of studies, including the Edelman and Cone reports, confirm that people have greater expectations now than ever of companies to give back – and want them to provide ways to help them give to causes that they care about as part of their interactions with these companies.  So at 5% of total charitable giving, are corporations really meeting these expectations?  Isn’t there a huge opportunity here for win-win-win?

It’s great that the numbers show that corporate giving is on the rise.  (Though it’s not so great that the large in-kind donations from some big pharmaceutical companies largely contributed to the growth in corporate giving – we’d hope to see a growth in charitable giving across the board, from companies of all sizes and stripes).  But with corporate giving comprising the relatively small slice that it does, the implication here is clear:  companies need to do more when it comes to corporate giving.  (And, hey, their customers and employees expect it, too!)

Companies can do corporate giving (way) better
Companies can change corporate giving to be the change people want to see in the world (if we may borrow from Ghandi), but they’re going to have to do things differently in order to accomplish this.  The traditional approach of doling out big checks to partner charities and then issuing a press release and hoping – poof, brand halo fairy dust! – that this will generate goodwill and that their customers, employees and other consitituents will care is being recognized as largely ineffective.  We talk to companies every day that candidly express their inability to measure the benefits of this old-school approach and frankly state that their main struggle is how to connect the act of giving more intimately and resonantly with the target groups they are trying to reach: namely their customers, employees and the communities in which they operate. 

Companies who move past checkbook charity to more strategic, effective and interactive corporate giving can engage their customers and employees in giving back – and realize greater social impacts and business returns on their investments.  They can create competitive advantage through giving back, acquire and retain more customers and key people, and create switching costs.  Most of these ideas involve enabling technology that goes beyond the conventional grant-management applications (but we’ll talk more about that later).

Here are 5 ideas on how companies can improve corporate giving:

1. Create opportunities for customers to give as part of everyday interactions with your company.  Here’s an idea that our company is based on: what if every transaction had philanthropy built right in?  In other words, imagine how much more corporate giving would occur if companies embedded charitable giving into everyday customer interactions.  There are a few great examples of this:  eBay Giving Works, the travel industry and Massive Good, and our very own client, iStockphoto, come to mind, but this idea needs many more companies to embrace it to make a dent in charitable giving.  And companies need to fund some of this giving themselves to incent participation.  (Yeah, Big Grocery, we’re talking to you!)  Plus, this makes it easy for people who don’t have the bank account of Mr. Buffett to give back (and get the great feeling that charitable giving delivers!                                                     

2. Create a workplace culture of giving and involve employees. The link between workplace giving and employee engagement is proven and an increasing number of companies are addressing this through employee giving and volunteering programs.  What is key here is ensuring that corporations are not just “checking the box” and implementing for the sake of having a program, but rather are implementing employee giving and volunteering programs that are engaging, give employees a seat at the table, and build a true culture of giving.  Stop the arm-twisting and use empowering technology.  Year-round programs that enable choice for employees (and ways for employers to incent giving to strategic corporate causes), are easy to implement and administer, and that make workplace giving of time and money easy and fun (not boring and clunky) are key. 

3. Leverage corporate giving through matching.  Everyone knows about this one, but not everyone does it (or does it right).  Matching is a key way to engage customers and employees in giving back, to actively communicate & incent giving to corporate causes and to increase total corporate giving. Instead of just making a donation and hoping it resonates, it provides a way to actively engage customers and employees in giving back – and a way to boost the overall dollars donated.  Plus you’ll never have to wonder whether the cause resonates – you’ll have the matching data to tell you…

4. Reward customers and employees through giving opportunities.  So last year Sears ran a contest where the winner received both rewards points and a donation to their charity of choice.  Why?  They earlier ran a research study that showed charitable giving is a huge reward and motivating to consumers.  Other real-life examples, like the hugely positive initiative where Crate & Barrel gave Donorschoose.org gift cards to customers, prove this out.  So what can companies do? Reward customers and employees with charitable giving opportunities (read: corporate money as donation currency; their charity choices).  This can be charity-of-choice gift cards for customer & employee appreciation, adding charity-of-choice giving as a redemption option to your rewards programs or rebating a portion of purchase price discounts to a customer’s giving account on your site.

5. Be titans of corporate volunteerism.  2011 is the year of the volunteer.  So make it happen for your employees and customers.  Make it easy for your people to volunteer, and remember: not all causes can make effective use of volunteers, yet all causes can use cash.  You needn’t necessarily provide the corporate grant to the entity where the volunteering occurs.  Empower your people to volunteer broadly and incent them with tangible rewards that give back in multiple ways: donation dollars that they can use to make charitable gifts to their charities of choice.  Reward volunteerism, and do it creatively.  Your people will reward you with increased loyalty and engagement.  They may even talk about your brand to their friends…

   We are passionately biased about corporate giving.  (After all, we are a software company whose embeddable donation processing platform enables companies to build convenient, choice-driven charitable giving and matching opportunities into their existing business transactions, under their own brands.)  But it seems perfectly clear to us: companies can (and should) do more corporate giving.  Companies should think through and act on new approaches to corporate giving and new ways of engaging their customers and employees in corporate giving.  Creative approaches and enabling technology will allow corporations to deliver greater social impacts (read: more dollars donated to more charities) and more business benefits (read: tangible effect on the bottom line).  In other words, more and better.  And that’s an approach to corporate giving that will help companies that get it to truly "do well by doing good."

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