Most big US companies expect flat giving in 2012, despite 2011 gains

The Chronicle of Philanthropy special report, 7/22/12

Charitable giving by America's biggest businesses rose slowly last year and shows little sign of gaining in 2012, according to a Chronicle study of 166 large companies. (See an interactive table that pinpoints how much each company gave in cash and products and the causes they supported.) Donations grew by 4% in 2011, according to the 115 companies that provided two years' worth of data. That's far less than the 13% rise from 2009 to 2010, when companies saw a sharp rebound in profits after the recession. More than 7 in 10 corporate leaders anticipate their philanthropy budgets will be roughly the same this year amid continued worries about the economy. About 27% say they will give more and 2% will donate less.

Among other findings:

> 13 companies donated more than $100 million in cash, compared with 11 in 2010.

> Five companies increased their giving by more than 50%. Starbucks grew the most (197%).

> Donations of products are growing at a faster rate than cash. Overall corporate giving, when both cash and products are counted, rose by nearly 15% in 2011.

> Alcoa gave the biggest share of its profits in cash to charity (6.2%). But most companies donated far less: The median was 1 percent.

> Four companies in the survey lost money in 2010 but still contributed to charity in 2011: Bank of America, Caesars Entertainment, First Data Corporation, and Office Depot.

While a handful of companies started new philanthropy projects this year, many are winnowing the causes they support in favor of bigger, higher-profile gifts to fewer organizations. That's in part because of a long-term trend of companies zeroing in on social issues that threaten their bottom lines, like people's ill health, high transportation costs, or diminishing fresh water. They are also focusing on causes that help them tap into new markets, appeal to their customers, and use their employees' skills. UnitedHealth Group, for example, continues to pare its arts giving in favor of efforts to improve Americans' health. Corporations continue to pursue new ways to encourage volunteering: General Mills workers around the world spend a week volunteering on office teams, while UnitedHealth started a "micro-volunteering" site to let its employees perform quick tasks for charities, like sprucing up their Web sites or crafting press releases. While many corporate grant makers are focused on advancing their business's goals, some companies also want their giving to propel social change.


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Commentary: An ancient philanthropy model that benefits corporations and the arts

Nick Poole, The Guardian Culture Professionals Network, 7/24/12

In 27 BC, in the early days of the Roman Empire, Caesar Augustus (also known as Octavian) became emperor, ushering in the 300-year period of peace and prosperity known as the Pax Romana. One of the qualities that characterised this unprecedented period of stability was an enlightened relationship between the state, commerce and the arts. And this relationship was largely due to the advice of one man - Gaius Cilnius Maecenas. Maecenas was a diplomat, a patron of the arts and a close friend and political ally to Octavian. So when the government of France began looking for enlightened models of patronage in 2003, they turned to the example of Maecenas. The result, a tax law called Le Mécénat, has unlocked up to €2.5 billion in corporate philanthropy for arts, culture, environment and civic society projects per year, and is now being considered in countries around the world from Italy to Korea. Central to understanding the huge impact of Le Mécénat on culture sector funding in France is the distinction between sponsorship and corporate philanthropy. This distinction hinges on the fact that while sponsorship may confer benefits on the corporate sponsor, corporate philanthropists may not directly benefit materially from their giving. Instead, under Le Mécénat, companies making philanthropic donations to cultural organisations are entitled to make a deduction from their corporation tax equivalent to 60% of the value of the donation. So what has the impact been for French cultural institutions? Sources estimate that as much as 40% of the total operating budget for the Louvre is released through Le Mécénat. And because the giving is based on a clear tax incentive, it is regarded in France less as a donation and more as an investment -- giving private companies an active stake in culture-sector funding which also delivers to their bottom-line priorities. Because of this, it is a more stable and predictable form of investment, and less prone to the 'boom and bust' cycle of traditional corporate giving.


Commentary: What's bad about corporations benefitting from their arts support?

Stephanie Frankel, Euro Discovery blog, 7/10/12

Large corporations often get a bad rap for receiving benefits for being philanthropic -- whether it is a tax break; goodwill in the community; a positive public relations spin; or heightened recognition. But is that such a bad thing? A 2006 Slate Magazine article poignantly titled "Charity is Selfish" makes the point that charity is no longer altruistic. Does that make the efforts of companies worthless or meaningless? No. Since 2006, with the huge increase of social media usage by corporations, the benefits of corporate philanthropy to a company have grown tremendously. One example is the Pepsi Refresh Project. Pepsi used a huge chunk of its advertising budget in 2010 to engage social media users to vote on community improvement projects throughout the country. More than 61 million individuals voted - [compared] to 89 million for the 2010 U.S. general election. Pepsi also recorded almost 3.5 million likes and gained almost 60,000 Twitter followers. Did the Refresh Project enhance Pepsi's social media network? Yes. In turn, this should benefit its marketing efforts. But possibly more importantly, Pepsi [gave] approximately $14.6 million to fund 352 ideas. And Pepsi was back at it again in 2011, looking to do more. By aligning itself with a charity and publicizing that relationship to the world, a company can benefit from that effort. But I would argue the charity can benefit as much if not more. They are benefitting from a corporation's large resources -- both financial and manpower -- the charity may not have otherwise. In addition to making large donations, using its resources to raise funds, and having a large pool of employees that can serve as volunteers, corporate boasting can raise a profile of a non-profit. Corporations should not shy away from over-publicizing their philanthropic efforts. By using traditional public relations methods, along with grassroots efforts and social media platforms, a large corporation can end up helping a charity more than it ever thought possible.


Commentary: How to show corporations the benefits of funding the arts

Julie Muraco, Americans for the Arts blog, 7/11/12

It is probably a revelation to most corporate funders that the arts & culture industry generates $135.2 billion in economic activity and supports 4.1 million jobs. Some corporate funders may not be looking at how arts & culture within their community support their own business revenues. Corporate funders need to be shown the light. And if it is anything like corporations I have worked for, what turns the light on in corporations are numbers and quantitative data. Why? Whoever you have approached with the data needs to deliver it to someone else, who will then deliver it to another layer of management, and so on before a decision is made. That includes the CEO. But it is no longer just a decision made in the executive suite. A "corporate funder" decision-maker might be found within the sales and marketing, human resources, or corporate communications departments. The numbers and the rationale for funding arts organizations based on the data needs to resonate with all of these people. In my own company, I want to understand the best and most effective way the person I want to target receives the research. Are they partial to e-mail? Snail mail? Do they want bullet points, the summary, or the whole report? It's best to ask and find out before sending the information and having an opportunity wasted. Sometimes multiple forms of distribution are required (Sometimes over many months.) If the challenge is that the funder is not partial to receiving the data, or if they have claimed to not be an arts funder, don't stop at that obstacle. I like to point out all the ways their company is a tacit user of the arts. Do they have a lobby with visual arts? Do they support other organizations that are [connected to the arts]? Overcome obstacles with information that shows you have researched their organization. Arts & Economic Prosperity IV can offer the most recalcitrant corporation data that supports the arts as a vital and necessary part of our society.

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