Corporations are increasingly looking for innovative ways to create social and environmental impact through their giving programs. The challenges targeted by corporate foundations and CSR initiatives are becoming ever more complex and corporate philanthropy is evolving in response. Here are seven corporate social philanthropy trends that are shaping the new best practices of tomorrow.
1. Corporations are giving more dollars than ever and those numbers will continue to rise.
Figures compiled by The Giving USA Foundation show that corporate giving reached over $20B in 2017, which they calculate as an 8% increase over 2016 corporate giving levels. This finding is echoed by CECP’s 2017 Giving in Numbers report, based on self-reported data provided by 209 of the world’s largest companies, showed that 48% reported their median total giving increased by 2.3% between 2013 and 2016. Their data also showed that a majority of those corporations planned to either increase philanthropic giving or remain at the same level in the next year.
2. Corporate social philanthropy and corporate responsibility initiatives are increasingly recognized as key drivers of sales, customer loyalty, talent retention, and recruitment.
As found in a report published by Project ROI, Corporate Responsibility has the potential to increase sales by up to 20%, affect variations in customer satisfaction by 10% or more, and reduce the average turnover rate of employees over time by 25% to 50%. These statistics, along with others, emphasize the long believed notion that CSR does in fact drive bottom line performance. Doing good is no longer an intangible benefit for corporations. It yields better financial results and CFOs and Chief Marketing Officers are taking notice.
3. CEOs are now expected to be widely seen as champions for their companies’ philanthropic efforts.
Simply having a corporate philanthropy program listed on your website is no longer enough. Increasingly, the public expects CEOs to proudly (and publicly) lead and advocate for their company’s philanthropic efforts. For evidence of this, look to the 2018 Edelman Trust Barometer Expectations for CEOs report. Their data shows that a majority (64%) of people they surveyed believe that CEOs should provide strong, visible leadership as changemakers. Across age groups, a vast majority (70%+) of survey respondents believed that CEOs should take an active role by personally sharing stories that illustrate the company’s mission and the impact they are creating through their corporate giving programs.
4. Corporate philanthropy is becoming more strategic.
Corporate giving is no longer just about giving money to organizations that are doing good, but giving to catalyze the most effective solutions to mission-aligned challenges. Inside Philanthropy’s 2018 Philanthropy Forecast notes they expect to see corporate giving increasingly guided by strategies designed to maximize impact. This is not a new trend, but it expected to continue for the foreseeable future. Susan McPherson’s article 8 Corporate Social Responsibility (CSR) Trends To Look For In 2018 identified “focused and forward-thinking brand activism” as something she is seeing more and more of. McPherson notes that we can expect to see “more focused action, with companies designating social or policy areas where they can make the most impact and devoting more resources toward proactive initiatives.”
5. More corporate foundations and CSR departments are looking at impact data to guide future giving.
We are already seeing greater numbers of corporate leaders who are looking at impact data in order to prioritize philanthropic giving. Last July Anne Kazimirski wrote an article for Stanford Social Innovation Review called Harnessing the Power of Evidence in which she argued that “making better use of evidence and increasing its role in decision-making is crucial to achieving social change at scale.” She cited data from The Center for Effective Philanthropy showing that greater numbers of large-foundation CEOs are now placing increased emphasis on using evidence-based practices.
6. The UN’s Sustainable Development Goals are increasingly serving as frameworks for corporate philanthropy.
In 2015 the members of the United Nations voted to adopt a set of 17 goals to “end poverty, protect the planet and ensure prosperity for all as part of a new sustainable development agenda.” These Sustainable Development Goals (SDGs) serve as a useful framework for organizations with philanthropic aims. According to research conducted by the Council on Foundations, corporate funders are increasingly using the SDGs to guide their giving strategies.
7. Corporations and corporate foundations are seeking out innovative philanthropic alternatives to grants.
Giving grants is no longer the only way that corporations are creating social and environmental change. More and more companies are looking to maximize their impact by supporting for-profit social enterprises that are scaling sustainable solutions to enduring global challenges. Impact investing is one of the newer, and increasingly more common, tools found in the corporate philanthropy toolbox. John Hewko, the General Secretary of Rotary International, wrote an editorial for The World Economic Forum that named impact investing as one of three ways to redefine corporate philanthropy for the 21st century.
For corporations that are interested in supporting social ventures, but unwilling or unable to take on the risks of investing with their philanthropic dollars, there is an alternative. At Good Returns, we have created an innovative, low-risk twist on corporate social investing called cycling. With cycling, instead of giving a grant, the corporation gives a vetted social enterprise a guaranteed, interest-free loan. Those dollars offer the social venture the runway they need to increase their impact while becoming financially sustainable. Because the loans are guaranteed, corporations and corporate foundations can be certain that the money will be repaid in full. We have a zero percent default rate. When the social enterprise repays the capital, the corporation is able to lend that money again to another social enterprise and the cycle is completed. Contact the Good Returns team to learn more about cycling.