Corporate philanthropy may sound like a business jargon-type phrase, but it's actually incredibly important.
Corporate philanthropy refers to "the charitable donations of profits and resources given by corporations to nonprofit organizations," according to the Business Dictionary. "Corporate philanthropy generally consists of cash donations but can also be in the form of use of their facilities or volunteer time offered by the company's employees. Donations are generally handled directly by the corporation or by a foundation created by the firm."
In other words, corporate philanthropy is all the good that a company does for its community and the world — both the monetary good and good deeds.
Why is corporate philanthropy important?
Corporate philanthropy is important both for the company itself and the community and/or planet.
So, what are the benefits of corporate philanthropy?
First of all, a company that boasts corporate philanthropy is one that shows that it cares about others. This is good for the company for several reasons:
- A company that cares about others is a company that can usually attract and retain talent more than a company that doesn't care about people.
- Corporate philanthropy fosters employee engagement in the community and in passion projects that help the world.
- A company that gives back to the community is one that has a purpose, and people (aka employees of that company) find motivation in having a purpose
- A company that donates to charities or offers volunteered time sees and gets the "bigger picture," which means that the company likely sees the bigger picture for itself and employees, as well — and that's attractive for prospective employees.
- Corporate philanthropy generates business value.
Second, corporate philanthropy is important for local communities and the whole world in which we live. Corporate philanthropy is a critical business function that supports the communities in which companies are based.
In fact, according to Double the Donation, corporations in the United States donated more than $17.77 billion to nonprofit organizations that are helping to change the world for the better last year — arts organizations, health and human services and educational institutions were among those nonprofits, for examples.
What is the difference between corporate philanthropy and corporate responsibility?
Corporate philanthropy and corporate responsibility, though very similar, are different.
"Corporate philanthropy and corporate social responsibility are similar concepts that often overlap in practice; in fact, the relationship between [corporate philanthropy and corporate social responsibility] are often barely distinguishable from each other, as the terms are sometimes used interchangeably," according to Small Business. "Often, philanthropy is integrated into a bigger-picture corporate social responsibility plan. Both are positive concepts designed to deliver corporate resources to the community the corporation serves, and the giving may also be aimed toward specific causes. The divide between philanthropy and corporate social responsibility is pretty clear when you take a hard look at the context for each, and when both are practiced simultaneously by corporations. The difference between philanthropy and charity is less clear, and the terms often have greater overlap."
While corporate philanthropy describes a company's specific intentions to help a local community or the world through charitable donations or acts of service, corporate responsibility refers to a company's overall corporate culture and its attitude toward its employees, clients and customers, the local community and society at large. Corporate social responsibility, unlike corporate philanthropy, directly involves the company's implemented business model and business practices. It directly involves the company in the causes it cares about and in the community in which it's based.
What are some examples of corporate philanthropy?
There are five basic types of corporate philanthropy, according to Double the Donation.
1. Matching Gifts
According to Double the Donation, matching gifts are the most popular form of corporate philanthropy there is. Companies with matching gift programs, in short, donate the same amount of money to the same nonprofits to which their employees donate. So if employees donate $1,000, the company will donate an additional $1,000 to the same nonprofit.
There are typically parameters, of course. These include employee eligibility (i.e. only full-time employees can participate), nonprofit eligibility (i.e. only educational institutions or only environmental projects, etc.), a match ratio (i.e. 1:1 or 2:1), a maximum or minimum of donations matched (i.e. the company will only match if employees raise at least $1,000 or the company will match up to only $10,000) and deadlines (i.e. within six months after the donation), etc.
2. Volunteer Grants
Volunteers grants are also known as Dollars for Doers programs, and they're the second-most-popular type of corporate philanthropy, according to Double the Donation. These Dollars for Doers programs basically match employees' volunteer hours with donations to the same nonprofits. So if an employee donates 20 hours of their time, the company will match that with a donated monetary amount that's deemed equal.
3. Employee Grant Stipends
Employee Grant Stipends are stipends that some companies will award to employees to donate to nonprofits of their choice. These are impactful because employees get to choose what nonprofits are important to them — it engaged employees that much more by giving them choice in the matter.
Typically, an employee will submit a request for a check to be sent to the nonprofit of their choice; they may be given the opportunity to apply to support one nonprofit in a calendar year. Meanwhile, the company has set money aside to choose a small number of nonprofits to which they'll award the grants each year.
4. Community Grants
Community grants refer grants that a company gives to different nonprofits in the community. Typically, a nonprofit applies to the company (if it has a community grant program in place), explaining why their organization would benefit from the grant money. Most companies award these grants to organizations that share like-minded values or that impact the local community in a way about which the company specifically cares.
5. Volunteer Support Initiatives
Volunteering time and services is just as important as donating money. Companies can partner their employees with nonprofits in order to provide support that, perhaps, only that company can provide. For example, the company might offer food or technology services, as well as specialized services like consulting or legal advice, to an organization in need.
AnnaMarie Houlis is a feminist, a freelance journalist and an adventure aficionado with an affinity for impulsive solo travel. She spends her days writing about women’s empowerment from around the world. You can follow her work on her blog, HerReport.org, and follow her journeys on Instagram @her_report, Twitter @herreport and Facebook.