Corporate givers regroup in recession

By Todd Cohen

Charities trying to figure out where corporate citizenship may be headed should look at new study by The Hitachi Foundation and the Boston College Center for Corporate Citizenship.

The study, “Weathering the Storm: The State of Corporate Citizenship 2009,” says 54 percent of over 750 corporate executives who responded believe corporate citizenship is even more important in a recession.

Companies increasingly are trying to build corporate citizenship into their business strategy and to link their actions and investments with principles of corporate citizenship, the study says.

And despite the recession, most businesses maintained their attention to corporate citizenship and their budget for it, while others increased their commitment.

While cutbacks and misconduct have eroded trust in business, “business leaders understand that corporate citizenship in our country entails great responsibilities as well as extensive rights,” Barbara Dyer, president and CEO of The Hitachi Foundation, says in the report. “Most are diligently working and investing toward improving their efforts to more fully meet these responsibilities.”

With 70 percent of executives who responded saying reputation is its main driver, the study says, companies have increased their internal and external communications about corporate citizenship.

Fifty-four percent now communicate with employees on the issue, and 39 percent talk about it with stakeholders.

While most U.S. companies are not making changes in their corporate citizenship practices, the study says, 38 percent of those that are making changes have reduced their charitable giving, 27 percent have increased layoffs and 19 percent have trimmed research and development for sustainable products.

And 83 percent of large companies support employee volunteering.

Rated by executives as the top three areas of corporate citizenship are ethical business practices, treating employees well, and managing and reporting company finances accurately.

Most senior executives believe business should be more involved in taking on major public issues, the study says, with 65 percent saying business should get more involved in the national debate on health care.

Big companies are responding differently than small firms, the study says.

Large firms are making big increases in their investment and involvement in citizenship work but are more likely to lay off employees, while small firms have limited layoffs but made big reductions in other areas of citizenship.

Corporate citizenship certainly is more than money, although money certainly matters to nonprofits.

Corporate giving, which falls under the umbrella of corporate citizenship, totaled $14.5 billion in 2008, or only 5 percent of overall charitable giving in the U.S. according to Giving USA 2009.

And corporate giving fell that year by 4.5 percent, or by eight percent in inflation-adjusted dollars.

With companies becoming more strategic in their giving and tying it more closely to their business and bottom line, nonprofits also should be more strategic in developing corporate partnerships.

Nonprofits should be working to team up with companies in ways that will generate not only the contribution of corporate dollars but also ongoing relationships that will build a pipeline of other resources that include in-kind support, employee volunteers and expertise, and corporate sponsorships and connections.

Doing good can be good business, and business can be a good partner for the giving sector.