Curt Weeden was disappointed, but not surprised.As a former Johnson & Johnson executive, author of two books on corporate giving and administer of the “New Strategies Program,” Curt’s one of the smartest guys I know in corporate giving (Just as Mollye Rhea is one of the smartest people I know in cause marketing!). That’s why I contacted him first when I saw the report from the Giving USA Foundation that U.S. corporate charitable donations measured as a percent of pretax profits fell to .80 of one percent in 2013, a slight retreat from a year earlier. Corporate earnings and the stock market had skyrocketed in 2013, how could companies be giving less? “The drop is being disputed by another monitoring agency,” Curt wrote back. “Still, not the trend line one would like to see. Let me look into it.” Later, Curt confirmed the drop, which is both good and bad news for nonprofits.
FIRST, THE BAD NEWS.
While business donations once averaged two percent or more of pretax earnings, companies have tightened their philanthropic purse strings over the past decade.
“Tax laws allow companies to take big deductions, but businesses are keeping their philanthropy at or below the one percent mark,” said Curt.
The drop in corporate donations is in sharp contrast to an up-tick in giving by individuals (a 4.2% increase last year), foundations (+5.7%) and bequests (+7.2%). So why the stock market is roaring and others are opening their wallets to help good causes businesses are grasping their dollars tighter than Scrooge. Or maybe not.
NOW, LET’S TAKE A CLOSER LOOK
According to Curt, businesses aren’t convinced that the charitable giving statistics fully reflect corporate support for nonprofit organizations. Cause marketing campaigns, employee volunteer initiatives and certain special events are often carried as ordinary business expenses and not counted as donations, companies contend.“Few companies have an accurate way of tallying everything they do for nonprofits,” Curt said. “Corporate donations in 2013 stayed within what businesses seem to consider a philanthropic safe zone,” said Curt. “The question among nonprofits is whether last year’s drop is just a variance within that zone – or the start of a more significant falloff.”
Curt, who as plain talking as the state he hails from, South Carolina, has a clear message for nonprofits: “Nonprofits need to find new ways to skin the corporate cat outside of the philanthropy program,” he said. “This isn’t the time for desperation. Nonprofits need to seize the opportunity, because there is one.”
First, product and cash donations from companies still account for nearly $20 billion in giving. “Strategically positioned cash donations equal to 1% of a corporation’s projected annual profits could be a win-win for a company as well as for nonprofit organizations,” confirmed Curt. “Nonprofits should continue their outreach to companies.”
Second, nonprofits should leverage businesses to raise more money from individuals. For example:
- Recruit a retailer to host a point of sale fundraiser. These programs can raise tens of thousands locally, and millions nationally.
- Ask a company to include your nonprofit in its employee payroll deduction. The added benefit is that may you receive a matching gift from the company.
- Ask a business to host a collection drive for your nonprofit that will have customers and employees donating gently used winter coats to your organization.
Forbe’s George Brandt put the opportunity for nonprofits this way.Checkbook Philanthropy seems to be going away….Corporations [are] far less interested in writing unrestricted checks than in leveraging their talent, technology, and infrastructure [Curt and me: aka assets!] to help those in need. This makes total sense. There’s no synergy in cash. Organizations leveraging their own strengths build those strengths while doing good for others.
Curt and I couldn’t agree more. Corporate giving is dead. Long live corporate giving.
