Beyond the Storm: Corporate Giving Rose in 2006

CECP survey finds philanthropy increase despite year-earlier outpouring for tsunami, Katrina

By Dennis Schaal

Some philanthropy officials expected overall giving levels to dip in 2006 because the tsunami and the one-two punch of hurricanes Katrina and Rita contributed to a 14.6 percent spike in corporate munificence in 2005.

But instead of settling back to pre-Katrina levels, total giving per company in 2006 increased again, at a slower clip than a year earlier, according to the Committee Encouraging Corporate Philanthropy (CECP)’s latest annual survey.

The results of the online survey, presented in CECP’s recently released “Giving in Numbers 2007 Edition,” show that the median dollar value of corporate giving increased 4.8 percent to $32.6 million in 2006 among the 97 major corporations that responded to the survey for the past two years.

“It was exciting to see that the trend still pulled the numbers upward despite such an extraordinary year in 2005,” said CECP spokeswoman Lindsay Siegel.

So, why is it important to track philanthropy trends?

Siegel said determining whether your company’s initiatives mesh with the philanthropic efforts of other companies in your industry “creates stronger conversations” with senior management and boards.

The report noted: “The heightened visibility of corporate philanthropy has given rise to an increased demand for performance benchmarks and transparency. Strengthened reporting, measurement and management of corporate community investment programs will be critical in creating an ongoing knowledge base regarding best practice and lessons learned and is equally important for communicating philanthropic inputs and goals with stakeholders.”

CECP’s 2007 report, which traces philanthropy in 2006, found that although total giving edged higher, 57 percent of the companies that participated in the survey for the past two years increased their philanthropy spending while 43 percent decreased their giving.

“The most frequently cited reasons for the upward change were continued strong profits, improved measurement of pre-existing giving, corporate growth by mergers and acquisitions, the launch of multiyear funding initiatives, and more accurate valuations of pro bono services,” the report found.

Companies that responded to the 2006 and 2007 surveys and saw giving decline by at least 10 percent cited several reasons for the cutback. Among the factors, manufacturing companies decreased noncash giving after exceeding budgets in 2005 with donations to combat the natural disasters, and there was a reduction in matching gifts following the outpouring of support for the victims of the 2004 and 2005 calamities, the survey found.

In addition, the study found that another reason for decreased giving was that philanthropy staffs and budgets were themselves victims of a different sort. In fact, corporate spin-offs took place and new owners shuttered departments, the study concluded.

CECP’s membership includes 165 CEOs and board chairpersons from corporations ranging from Adobe Systems and McDonald’s to Schering Plough and Time Warner. The mission is to raise “the level and quality of corporate philanthropy.”

Some 136 companies participated in the 2007 survey, which is available at www.corporatephilanthropy.org .