Corporate giving is up? Not so fast
Tim Sarrantonio
Generosity Experience Design | Empowering nonprofits to build a community of generosity
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Giving USA 2022 is out and I've written a longer analysis of what I feel the top five takeaways are when it comes to the numbers this year. I also did a short run down on TikTok for those of you looking for a TLDR on what happened in each category.
Yet, there's one data point that I want to have us step back and discuss in a bit more depth - corporate giving.
Giving USA Numbers - Corporate Giving
According to this year's report, giving by corporations is estimated to have increased by 23.8% in 2021, totaling $21.08 billion (growth of 18.3%, adjusted for inflation). Corporate giving includes cash and in-kind contributions made through corporate giving programs, as well as grants and gifts made by corporate foundations.
Impressive, right? Well, first I'd like to scale the view back and look at the entirety of giving that occurred in 2021 according to the report.
Corporate giving represents 4% of all generosity in the United States last year. Yet, when reviewing the increases/decreases that occur on a yearly basis going back to the 1981 data supplied by the Giving Institute, corporate giving has seen a downgrade in Year over Year numbers in 15 of the last 40 years of data.
This means that 37.5% of the time that corporate giving has been tracked it has seen a decrease from the previous year.
In comparison, individual giving has dipped only 7 times in the 40-year history outlined, representing 17.5% of the entirety of giving history tracked in the Giving USA report.
What exactly is corporate giving anyway?
The other piece of the puzzle to unpack here is what exactly defines corporate giving? The giving data itself is drawn from Candid's dataset so it is likely heavily relying on corporate foundation reporting as well as providers like YourCause and Cybergrants.
Diving in deeper on the intersections between corporate giving and mega-donor philanthropy, it becomes increasingly blurry to understand and unpack what exactly these numbers are referencing. Using Elon Musk as an example, an excellent outline from The Conversation states, "Tesla CEO?Elon Musk liquidated Tesla shares, starting in November 2021, that?totaled more than US$16 billion. So far, he?hasn’t declared plans to donate?the proceeds from selling those shares to charity.
Instead, Musk?donated $5.7 billion in Tesla shares to one or more charities?in late 2021, according to paperwork?filed with the Securities and Exchange Commission. He has?not disclosed which charities they were. But based on?what’s known about the year’s biggest donors, he is now among the nation’s most significant philanthropists."
Going further, there is a worrying trend that Big Corporate Philanthropy is being driven by a view that societal problems will be solved through the medium of for-profit ventures like SpaceX and hence should be considered a form of philanthropy in itself. Rhodri Davies outlines this viewpoint in an excellent article that focuses on Musk's takeover bid of Twitter, stating:
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This carries over into the approaches and narratives tech moguls apply to their philanthropy, with complex and intractable social issues being seen as ‘problems’ that can be ‘solved’ if only a sufficiently brilliant and disruptive individual is willing to have a go.
However, I do want to state that there is likely a difference between the individual billionaire philanthropy numbers being discussed in articles about Musk and Twitter and Block, Inc. founder Jack Dorsey and the dedicated corporate philanthropy numbers in the Giving USA report. The folks who do the research in Giving USA understand that there are deep and complicated nuances when it comes to mega-philanthropists that a pie chart won't get deeply into.
So what should the average nonprofit make of this?
Corporate philanthropy is a distraction
The primary point I am trying to make when it comes to these numbers is that for the vast majority of the sector, this is a distracting conversation. I read a Giving USA 2022 piece yesterday by another vendor in our space that has individual nonprofit CRMs and Corporate Social Responsibility software. One of the recommendations made when talking about corporate giving was to have the nonprofit "begin exploring corporate grants and partnerships if they’re looking to diversify their fundraising streams."
My advice is to primarily ignore this for two reasons.
Chasing down big sponsorships for events or applying for corporate grants is just not a good usage of the typical nonprofit's time. There is limited time in the day and working your way up the corporate chain of decision making is like tilting at a windmill for large portions of our sector.
Caveat To This Warning
However, there is one rule that can completely contradict the advice I just gave - relationships. If you have a tight connection with a corporation because of relationships that your organization has cultivated over time then explore that like any other major donor prospect opportunity. It could end up with a solid sponsorship for an event, a matching grant being activated for Giving Tuesday, or other revenue opportunities.
Yet, the biggest reason I don't like the corporate giving number is that it likely is downplaying or even completely missing the impact of small businesses making a major impact in their communities. According to a study conducted by American Express and The Chronicle of Philanthropy, small companies?donate an average of 6%?of their profits to charity. ?
Forging these relationships with a local business that are within your community is a really solid strategy and one that gets to the heart of what philanthropy actually is about - building a community of support.
So instead of worrying about what Verizon can do for your nonprofit, instead focus your efforts on the local businesses that you have a higher likelihood of getting face time with.
Am I too cynical? Getting the data wrong? Or am I on the right track here?
Providing strategic advancement solutions to nonprofits: I challenge organizations to think & do differently
2 年As always, a thoughtful piece, Tim. I disagree with corporate philanthropy being a "distraction." It should be considered in a holistic plan that encompasses diversified revenue streams. However, nonprofits should take a very strategic approach to securing support from corporations. While they're not going away, I think corporate sponsorships are transactional, however grants enable impact. Your "caveat" is my platform - giving is driven by relationships. With corporate giving it's relationships coupled with an alignment between their giving objectives and the nonprofits' missions. And ultimately, the viability of long-term relationships is dependent on stewardship. Onward!
Nonprofit Writing to Fund Your Mission: Grants | Donor Communications | Fundraising Appeals
2 年Appreciate the insights here -- and love the advice to think about how you can build connections and relationships locally, rather than chasing the big corporate dollars.
Individual Giving Strategist and Keynote Speaker. "Philanthropy and Wealth are not synonyms, but donors are data and data is human."
2 年The appeal of corporate philanthropy is that "gifts" tend to be larger/higher dollar than most/many individual gifts, so you can celebrate big wins "quicker" - it seems like its less effort to pursue a $5K sponsorship than 100 $50 gifts, but in the long run the ROI is less. Thanks for including that link to what CSR reps were saying. Anecdotally I heard so many NPOs in other verticals stating they had fallen out of funding from corporations that used to fund them because their funding priorities had changed. For larger corporations, especially in areas like finance and hospitality, their CSR guidelines are mandated by their regulatory and accreditation bodies, so if those priorities change, the corporations have to change as well. And it can leave NPOs who were funded last year suddenly finding themselves outside of the funding priorities in the new year. A lot of major corporations did shift their funding priorities over the last 27 months to focus on pandemic-related issues. Notice, too, deeper in GivingUSA's report that Corporate giving as a percentage of corporate pre-tax profits actually declined last year and is the lowest its ever been since 1981 at 0.7%. It's been on a steady decline from a peak of 1.7% in 2001.
Here for the Impact Uprising ? Co-Founder + CEO, We Are For Good / Podcaster / Keynote Speaker / Creative Entrepreneur
2 年Appreciate your insights here, Tim. And a good balanced look at the greater landscape. But really love that you included the caveat because I do think it’s a incredibly important aspect for nonprofits who have the capacity and relationships to explore it meaningfully. Here’s to not throwing the baby out with the bathwater ??