Have you ever donated canned goods or helped feed the homeless with your coworkers? Maybe you have participated in a payroll deduction with the funds going to a nonprofit that helps the community you live in! If so, great – you have an awesome start to knowing what corporate philanthropy is! If not, that’s ok too! Corporate philanthropy is constantly evolving and we can explore together how your company can give back – no matter how large or small your organization is!
Corporate philanthropy, giving, volunteering, and social responsibility are becoming more important each day—companies that may not have prioritized this are realizing the need to change, while companies that do have a history of philanthropy are ramping up their programs and making social responsibility more of a thoughtful process and a priority. A corporate giving program can make your business stand out from the rest to employees & customers, yet, even more than that, provide support to your surrounding community.
Although some might think that corporate philanthropy is just for large businesses or Fortune 500 companies, small- to mid-sized businesses participate in a large amount of philanthropy as well. In fact, small businesses donate 250% more than larger businesses to local nonprofits and community causes, according to data compiled by SCORE. The same data also showed that 75% of small business owners donate an average of 6% of their profits to charitable organizations annually.
This is encouraging data!
But every team has to start somewhere, so if you’re not there, no worries! We’ll show some examples of philanthropy that you could implement or add for your team. Without further ado, here is a review of the types of corporate giving along with the benefits of having a philanthropy program.
What is corporate philanthropy?
Regarding a nice definition, corporate philanthropy refers to the investments and activities a company voluntarily undertakes to responsibly manage and account for its impact on society.
Said more simply, it encourages actions by both a company and their employees in giving and volunteering, which has a positive impact on nonprofits and society. This benefits businesses by helping them reach their goals, and helps society by getting resources to nonprofits.
An example of corporate philanthropy
So exactly how do small- to mid-sized businesses give back to their communities? Although there are many examples of the kind of philanthropy effort large corporations like Apple, ExxonMobil, or Google make, small businesses are known to give back just as much. Here are a few examples of how small- to mid-sized business support their communities:
- Give to local charities: 66%
- Support youth organizations: 48%
- Donate to local first responders: 42%
- Aid local service groups (Rotary Club, Scouts, etc.): 37%
- Donate food or volunteer in soup kitchens: 32%
Volunteering has been a popular choice of philanthropy within the months of pandemic recovery. Many volunteers can even do this remotely! According to information gathered by SCORE, one out of four, or 77.4 million Americans, volunteer. Not only has this been a major source of help to local communities but, 92% of human resource executives agree that volunteering and contributing to a nonprofit can improve an employee’s leadership skills.
What are the benefits of corporate philanthropy?
You might be wondering, why is corporate philanthropy important? Even while maintaining healthy profits and achieving other business objectives, great leaders should implement philanthropy in their business to do their part to make the world a better place. Two incredibly important reasons are that employees want to work for companies that support causes they care about, and customers increasingly want to purchase from companies that give back.
Aside from the fact that businesses have the power to do a lot of good in the world, there are also some serious business benefits to corporate philanthropy:
- Companies that prioritize corporate giving create positive work environments where employees see themselves as part of something bigger.
- Participation in philanthropic initiatives increases employee engagement, and with increased employee engagement comes improved performance.
- Partnering with local nonprofits gives companies the opportunity to demonstrate how much they care and appreciate their communities. This can boost a company’s positive public image.
- Companies that support nonprofits and causes that customers care about also have more solid customer relationships.
All of this shows the importance of putting in place a strong corporate philanthropy program. But what types of corporate giving make sense for your company?
What are the types of corporate philanthropy?
There are many ways to incorporate giving and philanthropy into your business. Small- to mid-sized businesses have plenty of options open in front of them for giving back. Below are some great examples of corporate philanthropy for your team.
1. Matching Gifts
Matching gifts are a very popular form of corporate philanthropy. Companies with matching gift initiatives match the dollar amount of funds given by employees to eligible charities and nonprofits. For example, a company may have a matching gift policy for employees who donate to their preferred food pantry or other favorite non-profit. Nonprofits love matching gifts! Approximately two-thirds of companies match employee donations to nearly any 501(c)(3) organization―including art and culture, environmental, educational, health, and community organizations.
Companies with such programs typically set parameters on the amount being donated, e.g., matching gifts up to $500, or create a group incentive, e.g., if employees together raise $3,000 toward a particular cause, then the company will match the amount raised.
2. Volunteer Grants
Volunteer grant programs are also a very popular form of corporate giving. This is a great way for an employer to show they care about and support where employees are spending their volunteer time. Companies with this type of initiative will donate a set amount of money to nonprofits after an employee has volunteered so many hours with the same nonprofit.
Typically volunteer grant programs are created with thresholds in mind. For example, once employees have volunteered for 20 hours, the company will donate $500. This makes it slightly easier to track and report.
3. Volunteer time off
Volunteer time off (VTO) is employer-sponsored paid time to do volunteer work in your community. This type of philanthropy is fairly new. Less than ten years ago, volunteer time off was rare, with roughly 15% of employers offering it in 2009. More recently, 26% of employers offer paid time off for volunteering, according to SHRM’s 2019 Employee Benefits Survey. Often these policies don’t include massive amounts of time off. In fact, it’s common to allow just one VTO day (or eight hours to be divided up) per employee per year. Businesses can even specify which organizations are valid for VTO use.
Organizations that offer employees paid days off to volunteer their time and support the nonprofit causes they care about can be more attractive to job seekers.
4. Annual Grant Stipends
Annual grant stipends, though not as common, are a great way for nonprofits to benefit from companies and their employees.
An annual grant stipend is essentially an allocated amount of money that is given each year to employees, who then donate the money to the nonprofit of their choice. Volunteer hours are not required, and the company donates for them. The stipends are not incredibly large, but nonprofits can still benefit from these annual corporate giving programs.
5. Community Grants
Generally for this one, community organizations can apply to a company with a community grant program in place detailing how the grant would support their nonprofit missions. Many times companies, rather than employees, initiate community grants. However, don’t let that stop you from involving employees in this one! You can allow individual employees to suggest nonprofits for the grant, or some companies have even gamified this, where the winning team can select who the nonprofit recipient should be! While community grant programs are more commonly placed at larger corporations, companies of any size could implement such a grant.
6. Group Volunteering (Days of Service)
Corporate philanthropy doesn’t only have to be about donating money. Group volunteering, otherwise known as days of service, allow businesses to partner with nonprofits or organizations to provide material support free. An example of this could be volunteering at a local food pantry or animal shelter.
7. In-Kind Donations (Pro Bono Services or Product Donation)
Pro bono services are often offered “at cost” and benefit a cause or the general public. For example, a professional consultant may donate her time and expertise but ask for payment to cover traveling expenses. The difference between volunteer support and pro bono services is that pro bono services are typically offered as professional services. An individual, business, or organization would ordinarily have to pay the donor for this work. The tangible expenses of providing pro bono services can be at least partially deducted on business tax returns.
If you consider your organization to be focused on growth and employee engagement, utilizing corporate philanthropy initiatives is the top way to achieving these objectives all the while giving back and benefitting your community. These seven types provide a solid preview of the corporate philanthropy possibilities. You can choose which work best for your organization! Additionally, if helpful, our team is always available to chat and guide you on the best options to involve your team and fellow employees — simply reach out to us at [email protected].
Give back, Selflessly
Selflessly is a software that helps HR leaders create philanthropic programs for their employees.
We want to increase social impact. We do this by rapidly building technology to connect great resources to great organizations. Our software provides everything an HR leader needs to create the program and engage their employees. At Selflessly, we partner with great companies, platforms, and people to provide even better services. Selflessly is Indiana’s first dual Certified B Corp and Domestic Benefit Corporation. We are excited to help further the discussion on business as a force for good. Contact us today to start giving back.