Can a Drop in Corporate Cash Giving Signal a Good Thing?

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Corporate Philanthropy
Wednesday, August 11, 2010

On Monday the Chronicle released results from a corporate giving survey indicating that 2010 corporate giving is holding steady from 2009 levels. Not surprised it didn’t go up. Glad it didn’t go down. What caught my eye though was that it was overall giving of cash and products that remained stable – while cash giving actually dropped.

Can corporations continue to achieve social impact if they continue to reduce cash donations?  Probably not, but there may be a silver lining here. A drop in cash donations – in the context of stable overall cash and product giving – shows more companies are finding new ways to bring the full spectrum of their resources to the table.  

 In the article, Preston and Barton reinforce this idea through examples of companies changing the ways they are giving, tightening their focus, and working harder to make their efforts more visible:  three trends that are moving in the right direction even if overall giving levels aren’t.

By finding creative ways to tap corporate resources beyond cash donations, corporations can make their giving more personal to the company. Better utilization of the specific power in their products or people can create a more intimate and meaningful connection between the company and the issues it chooses to address. This intimacy will, over time, more deeply embed the causes the company chooses to support – and even “generosity” in general – in the organization’s culture.

Likewise, increasing visibility around a company’s philanthropic efforts, if done properly, will have immediate impact on brand reputation while strengthening the personal connections between the employees and the cause. Increased visibility can also raise consumer and stakeholder expectations for sustained involvement.  But let me repeat the “if done properly” part. Holding dollars from a place where they can bring about positive change in society and putting them in a place where they simply tout thin or ineffective philanthropic efforts will breed cynicism and mistrust.

And while a previous Preston and Barton article Increasingly, Companies Seek to Tie Giving to Their Efforts to Achieve Business Goals introduces the idea that as more grants come from marketing budgets, giving is less likely to be cut during a recession – its our experience that how the ideas, beliefs and values are embedded within the company is the more critical factor in predicting how philanthropic efforts will weather a storm.

Tied so closely to all these ideas are high-impact Signature Initiatives, a strategy that addresses a clearly defined social goal, enables a company to play and important leadership role within a distinctive niche, and leverages financial and other corporate resources in creative ways that maximize impact and visibility.

For companies that don’t see increased cash contributions on the horizon (or even for those who do) Signature Initiatives can be powerful as they move emphasis from cash contributions to leadership, leverage and strategy as the primary tools for strengthening brand and achieving social impact.  Check out Leslie Pine’s recent article on Signature Initiatives if you’d like to dig a little deeper.