Corporate foundations gave an estimated $4.4-billion to charity last year, a 3-percent decline from 2007 after adjusting for inflation, according to a new report.
And giving this year is expected to be down again, with slightly more than half of the corporate foundations surveyed anticipating a drop in contributions.
“We’re going to see even more of the effects of the economic downturn in 2009,” says Steven Lawrence, senior director of research at the Foundation Center, the New York organization that published the report. “Especially as a result of the mergers and upheavals in the banking and finance industry, we’re likely to see more dramatic cutbacks and foundations ceasing to exist.”
The Foundation Center examined nearly 2,500 corporate foundations for its report.
The study did not include donations made directly from corporations themselves, gifts that account for the bulk of corporate largesse. In 2007, when corporate foundations also gave about $4.4-billion, Giving USA, the annual tally of American philanthropy, reported that businesses gave a total of $15.7-billion.
The Foundation Center figures also do not include gifts from so-called operating foundations, grant-making organizations commonly established by drug companies to distribute medicine to low-income Americans. Thirteen of the biggest such groups made in-kind gifts in 2007 worth $2.6-billion, according to the Foundation Center.
The Foundation Center’s new report says that giving by corporate foundations has grown more slowly over the last couple decades than other types of grant makers.
Donations from community foundations increased nearly six-fold from 1990 through last year, while private, or independent, foundations, more than tripled their giving.
Gifts from corporate foundations, by comparison, grew 90 percent (or less than double) during the same time.
Banking and Finance Institutions Likely to Decrease Giving
Corporate foundation giving declined as a share of all foundation giving from 17 percent in 1990 to 10 percent last year. And that share may continue to drop, according to the Foundation Center’s Mr. Lawrence.
He says that corporate foundations are less likely to hold assets they can draw from when money is tight, and companies are subject to pressure from stockholders who may prefer a strict focus on business rather than philanthropy.
“The good news is that we hear the leadership of corporate foundations say they continue to take very seriously their responsibility as corporate citizens of their communities and the world,” Mr. Lawrence says. “But when profits are down and shareholders see the value of stock go down, it may be hard to continue to provide all that support.”
Especially vulnerable, he says, is the banking and finance industry, which has typically accounted for the biggest single chunk of giving by various types of businesses — about 25 percent.
“Three of the top five corporate foundations are facing very challenging situations,” he says, referring to the Bank of America, Wachovia, and Citigroup, which together gave away a total of $382-million through their foundations in 2007. “This is definitely a pressure point where we expect to see the impact of the economy.”
The Foundation Center’s report offered an estimated giving figure for last year, but the bulk of the data focused on 2007 for which audited figures were available.
For that year, corporate foundations distributed an average of $1.76-million in total grants. And one out of every five of the nearly 2,500 grant makers gave away at least $1-million. A quarter of all gifts went to education causes.