What Is Corporate Philanthropy? The Basics Explained

 

Are you looking for ways for your business to give back?

If so, you should consider setting up a corporate philanthropy program. Corporate philanthropy can be an excellent way for your business to show that you care about the community, and it can even help your business grow.

But, what is corporate philanthropy? How do you set up a corporate philanthropy program?

Check out this guide to learn everything you need to know about corporate philanthropy.

What is Corporate Philanthropy?

Corporate philanthropy refers to the activities and investments that a company voluntarily partakes in to benefit society. While most people think of financial contributions when they think of philanthropy, philanthropy also involves giving your time and resources.

Corporate philanthropy typically involves both long- and short-term solutions to drive change. For example, a corporation may offer to help feed the homeless around the holidays as a short-term solution. As a long-term solution, they may offer to work with a nonprofit that helps young people who are homeless find jobs.

Many corporations choose to donate to a cause they care about. However, other corporations decide to take a more direct role in their philanthropic efforts by partnering with a nonprofit or putting together an in-house team to manage philanthropic programs and charitable gifts.

Corporate Philanthropy vs. Corporate Social Responsibility

It’s important to understand that corporate philanthropy is different from corporate social responsibility.

Corporate social responsibility involves creating and implementing business practices that will lead to a more sustainable future. With corporate social responsibility, you get your business directly involved with a charitable cause.

For example, let’s say you run a mining company. To mitigate the pollution and harmful environmental effects caused by mining, you may choose to implement a local cleanup program as a part of your social responsibility plan.

Or, let’s say you own a restaurant. To cut down on food waste, you may choose to create a program that involves donating leftover food items to in-need populations.

While corporate responsibility isn’t mandatory or always practiced, it’s a vital component for growing your brand. A recent survey found that 73% of Americans make purchasing decisions based on how much a company involves itself with charitable organizations.

And, 50% of Americans say they’d switch to a brand that supports a cause they believe in. Additionally, two-thirds of Americans say it’s a company’s responsibility to give back to those in need. In other words, giving back can help make your brand more successful.

It’s important to understand that you don’t need to choose between corporate social responsibility and corporate philanthropy. A lot of corporations intertwine these programs so they can have a more significant impact on the broader community.

Corporate Philanthropy vs. Charity

It’s also important to understand that corporate philanthropy is different from corporate charity. Corporate charity involves directly donating money from your corporation to a charity.

There are no strings attached, and you can work with any charity of your choosing. Philanthropy, on the other hand, involves giving your corporation’s time or resources to solve a problem.

For example, let’s say your corporation wants to help patients suffering from HIV. As a part of your corporate charity plan, you may choose to give money to a nonprofit that delivers HIV medications to those who can’t afford them.

As a part of your corporate philanthropy plan, you would do something that involves seeking a cure for HIV. For example, you may put together a charity walk/run that raises money for HIV/AIDs research.

As you can see, corporate philanthropy and corporate charity are very similar, and you can also intertwine your corporate charitable donations with your corporate philanthropy program.

Types of Corporate Philanthropy

If you decide to set up a corporate philanthropy program at your workplace, one of the first things you need to figure out is the type of corporate philanthropy you’re going to engage in. Here are the different types of corporate philanthropy:

Matching Gifts 

Gift matching is one of the most common forms of corporate philanthropy. 65% of Fortune 500 companies have corporate gift matching programs, so if you don’t have one yet, now is the time to set one up.

With this type of program, employees or consumers can contribute money to a nonprofit or charity. Then, the corporation reviews their donation, and if it’s approved, they match that amount with their own money.

In other words, if someone donates $50 to your corporate gift matching program, your corporation will match this donation with another $50.

Employee Grant Stipends

Another common type of corporate philanthropy program is an employee grant stipend. This involves awarding grants to employees, which are then donated to the charity of the employee’s choosing.

Some corporations have a handful of nonprofits that employees can choose from, while other ones allow employees to fill out a form detailing information about the nonprofit they wish to donate their stipend money to.

Volunteer Grants

A volunteer grant involves a corporation donating a set amount of money to a nonprofit in exchange for their employees putting in volunteer hours with the same nonprofit.

Typically, these programs are created with a threshold in mind, rather than an exact donation-to-hour ratio. For example, you may say that once your employees have volunteered for 20 hours, your company will donate $1000. This makes things slightly easier to track and report.

Talent or Service-Based Donations

Talend or service-based donations are another great way to get your company involved with corporate philanthropy. This type of program involves allowing employees with specific skill sets to volunteer their services.

Common talent-based donations include:

  • Consulting services
  • IT services
  • Legal services (check out the John Arnold Foundation to learn more about how you can put your legal expertise to use)
  • Tax services
  • Catering services

You’ll need to coordinate with your chosen nonprofit to determine how much time you should allocate for service-based donations.

Corporate Sponsorships 

Corporate sponsorships are a great way for your company to help your community and get the word out about your brand. If a nonprofit has a big event or gala coming up, your corporation can offer to sponsor it in exchange for some advertisement space.

For example, if a nonprofit has a charity auction coming up, you can donate banners for the auction that have your logo on them.

Benefits of Corporate Philanthropy

So, why should you bother to set up a corporate philanthropy program? Here are some of the top benefits of corporate philanthropy:

  • Create a bigger network and connect with your local community
  • Make your employees happier and help them feel like their work matters (studies show that happy employees are more productive)
  • Create a better company culture
  • Increase your job applicant pool, as people want to work for places that care
  • Create more customer loyalty

Corporate philanthropy can also help you increase your sales. As we mentioned earlier, customers are more likely to support businesses that give back to their communities, so setting up a corporate philanthropy program can help your business grow.

How to Start a Corporate Philanthropy Program

So, how do you create a corporate philanthropy program? Here are the steps you need to take:

Choose a Cause 

While your corporate philanthropy program can work with multiple causes, in the beginning, we suggest choosing one cause to focus on. If you can, try to choose a cause that somewhat aligns with your business.

For example, if your corporation sells reusable water bottles, you may want to focus on helping the environment. Or, if you own a legal firm, you may want to focus on helping rehabilitate juvenile delinquents.

Choose the Type of Corporate Philanthropy Program 

Once you’ve chosen a cause, it’s time to figure out the type of corporate giving program you want to set up. We discussed the type of programs earlier in this article, so you can refer to this section if you need ideas.

When you’re first starting out, it’s probably a good idea to set up one type of corporate giving program and once it’s established, you can set up another one.

Involve Your Employees 

Once you’ve chosen a cause and a type of corporate giving program, it’s time to get your employees involved. If you want to, you can even get your employees involved when it comes to choosing a cause and a type of program to set up.

If you run a large corporation, we suggest setting up a corporate philanthropy board so that your employees can have more control over what goes on.

Corporate Philanthropy: Are You Ready to Set Up a Corporate Philanthropy Program? 

Now that you know what corporate philanthropy is and how to set up a corporate philanthropy program, it’s time to get started. Corporate philanthropy can help both your business and your community grow, so it’s time to start your program today.

Be sure to check back in with our blog for more tips on growing your corporation.