October 18, 2007
Companies Increased Giving by 4.8% in 2006
By Nicole Lewis
Corporations increased their giving by a median of 4.8 percent last year, according to a new study. The median value of company contributions of cash and products last year was nearly $33-million, which means half the companies gave less than that amount and half gave more.
The increase, spurred by giving in the service sector, is the result of strong profits, improved measures for tracking and accounting for gifts, and new philanthropic commitments, especially to programs overseas, says the report by the Committee Encouraging Corporate Philanthropy, in New York.
The Committee Encouraging Corporate Philanthropy based its research on data provided by 136 companies, 55 of which ranked among the 100 largest in terms of revenue, according to Fortune magazine. Contributions from these companies totaled more than $11.2-billion in cash and product gifts last year, says the report. The median total giving among these large companies was $50-million.
Awards to health and social-service charities (which accounted for 31 percent of donations) topped the list of giving priorities, followed by education (25 percent) and community and economic development (14 percent). Gifts to environmental groups (3 percent) proved least popular with companies.
Giving to international groups is on the rise, according to the report. Of the 48 companies that provided data in the past three years, in 2004 9.6 percent of donations helped people overseas; in 2006 that figure increased to 12.9 percent. Maufacturing companies are leading the change; 18 percent reported gifts overseas, compared to 4 percent of service companies. The report says a possible reason is manufacturing companies often have employees or factories overseas.
The report highlights giving by the Dow Chemical Company, which has manufacturing operations in 37 countries and has increased its international giving four-fold in the last two years, to 20 percent of its overall philanthropy.
A sharp divide exists in giving patterns between service and manufacturing companies. Of the 97 companies that provided data for the past two years, 35 percent said they had increased their giving by 10 percent or more. Two-thirds of these respondents were service companies. But not all companies reported an upward tick in contributions, with 21 percent of respondents saying they had cut contributions by 10 percent or more. Manufacturing companies accounted for nearly half of these repondents.
Most of the cuts were due to an absence of gifts for disaster relief, says the report. After upping their giving levels in 2005 to make grants around Hurricane Katrina and the Asian Tsunamis, many companies in 2006 returned to “normal” giving levels, says the report. Other reasons companies gave for decreased contributions included corporate spin-offs and department closures, completion of multi-year grants, and a lower overall production of goods, leaving less extra products to donate.
Soaring profits helped lift donations by service companies, while manufacturing companies reported cutting non-cash gifts — which represent a third of their contributions — by 25 percent.
Among industry sectors, information-technology companies reported the biggest rise in giving from 2005 to 2006 (18 percent), followed by utilities (7 percent), and makers and distributors of food and drink products, as well as other companies (6 percent). Health-care companies experienced the largest decline in giving (11 percent).
Of the 97 companies that provided data in the past two years, fewer corporations put money into their foundations in 2006 than did so the previous year, and the dollar amount was lower, says the report. In 2005 62 companies added a median of $8.2-million to their corporate foundations, while in 2006 the figure dropped to 54 companies, committing a median of $7.3-million to foundations. Less money being allocated for disaster relief explains the decrease, says the report.
The Chronicle’s most recent survey of corporate giving showed a median increase of 6 percent in cash gifts among the largest companies.
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