12th January 2021
In ancient Greek, “philanthropy” means “love of humanity,” but when it comes to corporate philanthropy often people think tax breaks and good PR are the driving force incentives, but there’s so much more to it than that!
Philanthropy is an integral social responsibility for businesses, regardless of their size. Worth goes beyond wealth. Corporate philanthropy adds worth all companies – this worth is not always financial and can take many forms.
Why is Corporate Philanthropy Important?
It encourages employee giving, which positively impacts non-profits and society, and benefits businesses by helping them reach their goals.
Corporate philanthropy can lead to:
- Positive Work Environment
- Increased Employee Engagement
- Positive Public Image
- Enhanced Consumer Relationships
With clear benefits, more businesses are offering a vast array of corporate philanthropy options.
The most popular form of corporate philanthropy is matching gifts. According to one analysis of matching gift participation, 65% of Fortune 500 companies offer matching gift programs.
Companies with such programs usually set the parameters on the amount being donated or create group incentives where employees can raise the money collectively toward a particular cause. The company then matches the amount raised by employees by its match ratio, this could be the same amount, or double, or even triple what’s been raised. Companies themselves determine match ratios and employee eligibility for gift match programs. They can also choose to implement maximum and minimum donations matches (e.g. gifts of £50 – £1000).
Volunteer grants are the second most prevalent source of corporate philanthropy today. These programs see employers reward their employees’ philanthropy by donating to the organisations where they volunteer their time. Volunteer grants can be a win-win, as they attribute to engaged and active volunteers and provide financial security of donations.
Volunteer grant programs typically have structured thresholds instead of an exact hour-to-donation ratio. Once employees have volunteered for a minimum number of predetermined hours (e.g. 10 hours), their employer will donate a fixed amount to that specific non-profit organisation (e.g. £500). This makes tracking and reporting slightly easier.
Employee Grant Stipends
Some corporations award grants to employees, which are then donated to the non-profit of their choice. While these programs are less common than matching gift or volunteer grant programs, they are hugely impactful for the non-profits that benefit from them.
Companies choose to implement employee grant stipend programs in a number of different ways. So, this one has some flexibility built-in.
Some businesses choose a handful of non-profits to support each year, and employees can apply to support one. Within other organisations, employees fill out a form with the details of a cause they wish to support, and if approved, the company will send a check to the non-profit in the employee’s name.
Companies, not their employees, are the initiators of community grants. Non-profits can apply to companies with these programs to explain why their organisation’s mission would benefit from the financial endowment.
While community grant programs are more common at larger corporations, companies of any size could implement such a grant.
Volunteer Support Initiatives & Resource Donations
Corporate philanthropy isn’t solely restricted to the donation of money. With volunteer support initiatives, companies partner their employees with non-profits to provide specialised support only that company can provide.
This support can also come as a resource donation in physical assets being loaned or given to a charity. For instance, Walmart provides access to its large fleet of refrigerated food trucks nationwide to Feeding America. Walmart donates the use of their trucks and logistics expertise to help coordinate the charity’s needs, which are distributing fresh food to people in need.
Resource donations are an innovative way of increasing company exposure and impact without forking out any cash. Companies consider the business assets their disposal and where they may have extra capacity that charities could utilise.
Corporate sponsorships are a form of advertising in which companies pay to be associated with certain activities, programs, events or attractions. Companies frequently give financial support to a non-profit to help further their mission. The non-profit will then recognise this by acknowledging that the business has supported them to achieve their goals in these initiatives.