Business leaders say they remain committed to being good corporate citizens even during the recession, but financial pressures have forced some to cut back on philanthropy and volunteerism, according to a new study by the Boston College Center for Corporate Citizenship and the Hitachi Foundation.
Fifty-four percent of more than 750 business executives surveyed said that corporate-citizenship activities—including environmental efforts, ethical business practices, treating employees well, and philanthropy—are even more important during bad economic times than good.
But 38 percent of companies were forced to cut their cash giving this year, according to the study of small, medium, and large businesses.
The percentage of businesses contributing products and services dropped slightly, from 65 percent in 2007 to 60 percent this year. Those providing volunteering opportunities fell from 64 percent to 57 percent.
The cutbacks were strongly correlated to a company’s financial performance. Among businesses hit hard by the recession, 59 percent spent less on philanthropy.
Of those whose performance improved, 19 percent gave away less money, while 63 percent gave about the same. The rest (18 percent) gave more.
The study, “Weathering the Storm: The State of Corporate Citizenship in the United States 2009,” is the fourth of its kind.
‘Pretty Good Story’
Mark Popovich, senior program officer of the Hitachi Foundation, in Washington, said the survey results painted “a pretty good story for corporate philanthropy and volunteering,” considering the severe economic stress most businesses faced this year.
While there is strong support among business leaders for charitable giving and volunteering, he said, it was difficult to maintain cash contributions in the face of plummeting revenues.
“Employees may be asking whether we have the money when we’re laying off people, when our sales and revenues are down, when we’re cutting back hours,” Mr. Popovich said. “There are internal pressures.”
The survey, which was conducted in June by the polling company GlobeScan, found that small businesses were responding differently to the recession than large ones. While they were less likely to lay off workers, small companies (those with fewer than 100 employees) were more likely to cut charitable giving and volunteerism.
A company’s reputation, and its traditions and values, were cited as the two main reasons for engaging in corporate-citizenship activities. The chief executive now leads a company’s efforts to be a good corporate citizen at three-quarters of the businesses surveyed.
Companies were more likely to give money, products, and volunteer hours to education, health care, and the environment than other causes.