Chronicle of Philanthropy

August 7, 2010

After a year of cuts, most companies plan to hold steady in 2010, Chronicle study finds

Patrick Schneider

By Noelle Barton and Caroline Preston

Corporate profits are on the rebound, but most big businesses say it will be some time before they can give as much cash as they did before the recession, according to a Chronicle survey of 162 of the country's largest corporations.

Seventy-three percent of businesses polled said they expect their cash and product giving in 2010 to be about the same as in 2009-a year in which cash giving fell by 7.5 percent. Thirteen percent anticipate an increase and 13 percent predict a drop.

While that would be's bad news for charities, the reality could be even worse.

Sixty-eight companies decreased their combined cash giving in 2009 from $4.3-billion to $3.9-billion, the first time since 2003 that cash contributions from businesses in The Chronicle's survey have dropped. Fifty-four percent of businesses gave less cash, 30 percent gave more, and 16 percent gave roughly the same. But donations of cash and products increased by nearly 5 percent last year, as companies sought to compensate for the decline in cash by offering other types of assistance.

"The whole economy has to burrow itself back up before a lot of corporations are going to have the money to invest as they did prior to the recession," says Woody Dicus, manager of corporate community relations at Progress Energy, in Raleigh, N.C.

The business will donate a little less this year by giving money to fewer groups that have never received aid from Progress, and by cutting back on support of galas and eliminating and eliminating support of galas and golf tournaments. 

When Ford Motor Company temporarily shut down one of its auto plants, the corporation assignedits interns to work on a local volunteer project, enabling them to stay productive and also do good.

GE committed $25-million to community health centers.

Changes in Giving

 While they have less money to give, companies are trying to respond to needs aggravated by the bad economy.

Fifty-four percent of businesses in the survey said they are encouraging employees to volunteer more, 25 percent are giving more money to groups that serve people hard hit by the recession, and 16 percent are donating more products and services.

Microsoft, for example, is cutting back on cash giving slightly this year but training more out-of-work people (roughly 900,000 vouchers for free classes have been distributed so far) in technology skills. The company, with headquarters in Redmond, Wash., is also doing more to get employees to volunteer by creating a "leadership" designation for people who volunteer regularly (before, only those who donated $1,000 or more were recognized).

The volunteer work has benefits for Microsoft, too. After the company publicized its volunteering program to its employees in Egypt, workers' satisfaction with the company's commitment to societythere, as measured by an internal survey, jumped from 61 percent to 91 percent, says Akhtar Badshah, senior director of global community affairs.

A Narrowed Focus

Companies are changing their approach to giving in other ways, too., Businesses continue to pare the number of causes they support, often favoring social issues that align with their business goals and expertise. Progress Energy, for example, is now directing a large share of its charity to energy-related causes, such as a program at the University of North Carolina that educatestrains teachers aboutin energy issues.

Other companies are narrowing their focus around specific goals. Northwestern Mutual Foundation, in Milwaukee, is no longer giving to a wide range of groups that seek to improve education; instead, its grants will focus on literacy. Target, in Minneapolis, is focusing its education philanthropy on getting children reading proficiently by the end of third grade.

As companies focus on fewer causes, they are pressing charities to do more to demonstrate their performance.

Northwestern Mutual, which is seeking to cuttrim in half the number of groups it supports in half, is asking charities to fill out a "financial scorecard," showing the organization is on sound financial footing as a prerequisite for getting a grant.

PNC Financial Services Group, in Pittsburgh, works with consultants who specialize in nonprofit evaluation to vet its grantees and typically directs roughly 12 percent of each grant to evaluate its effectiveness.

At the same time, the bank, like 35 percent of businesses in The Chronicle's survey, is moving away from making multi-year grants. "We don't want to be a line -item in an organization's budget year after year," says Michael Labriola, deputy executive director of the PNC Foundation. "That fosters, I don't want to call itsay dependence