A recent trend among companies involves charitable giving. It is true that individual charitable giving has decreased, but corporate giving is on the rise, and candidates are paying attention.
A recent Fast Company article reported that volunteering and charitable giving overall have dropped around 11% since the early 2000s, and not surprisingly, economic recession and demographic shifts may account for the decline. In 2005, individuals gave an average of $1,024 to charities annually. Following the Great Recession in 2008, that number dropped to $872 in 2015, as many Americans took a more cautious financial approach. Demographic shifts may have further influenced the willingness to give, with more Millennials getting married later in life, possibly delaying personal charitable giving until they are more financially stable. The recently passed Tax Cuts and Jobs Act also has charities concerned that individual giving may drop even further.
Surprisingly, while personal giving is down, corporate and foundational giving is at a high and is considered very important to Americans. In fact, Charity Navigator reports corporations in the United States gave $390.05 billion (2.1% of gross domestic product) to charitable organizations in 2016, and corporate giving grew from 2015 levels by 3.5% to $18.55 billion (5% of all donations) in 2016. Companies are championing charities that support communities and provide important services, such as education (15%), human services (12%), and health (8%).
The Significance of Corporate Giving
Despite individual hesitations and limitations when it comes to contributing time and resources to charitable causes, giving back results in tremendous emotional benefits, helping individuals feel more empowered and more connected to the world around them. And individuals who feel empowered and connected make stronger and more well-rounded employees. That’s one reason why many companies, including Ally, are ramping up corporate giving efforts and providing more ways for individuals across their organizations to get involved.
Volunteerism is a powerful component of employee giving. Volunteering in the community brings a human component to giving back—no more checkbook philanthropy; this is real people doing real work and making a real impact. Companies that involve themselves in corporate giving and employee volunteering position themselves with more strength as a brand, recruiter, retainer, and performer. Volunteerism and offering numerous giving-back opportunities is the new way to make an impact on your employee base.
Adweek reports 70% of Millennials will spend more on brands that support causes—which leads to deeper brand identification and stronger hiring pull. In the same vein, a 2016 Deloitte study on volunteering found that Millennials were “twice as likely to rate their corporate culture as very positive” if their company participated in workplace volunteer activities, leading to better retention.
In fact, more than two-thirds (67%) of respondents in Nielsen’s global online survey on corporate social responsibility say they prefer to work for a socially responsible company, while more than half (55%) say they are willing to pay extra for products and services from companies that are committed to positive social and environmental impact.
Perhaps more important than retention and recruitment, corporate giving has been proven to help tremendously with employee engagement. Companies with engaged employees outperform companies whose employees do not report feeling engaged by up to 202%.
Successful Corporate Giving Programs
There are many examples of corporate programs designed to inspire employees and teams to contribute in meaningful ways. For example, Verizon has a successful corporate giving model that allows employees to get involved in causes they care about both within and outside of the organization. Verizon is a generous donor to employees who volunteer in the field: Fifty hours equals $750 for a nonprofit of the employees’ choice.
Verizon also offers a unique employee giving network through its VtoV fund, which directly benefits Verizon employees. The VtoV fund helps employees who have lost their homes due to disasters—something that proved very beneficial following a tough hurricane and wildfire season.
Ally is another company dedicated to giving back. Ally has found that a special cause or time of year for employees to participate can also inspire engagement. Every November, Ally celebrates a companywide Giving Back Month, which encourages employees to support local nonprofit organizations with donations and volunteer time for vital community services and financial education. In November 2017, Ally gave back through more than 175 events, more than 5,800 hours volunteered, and more than $800,000 donated by employees and the company.
These and other ongoing efforts have united employees in efforts to do good things across the country and have contributed to some of the highest employee engagement survey scores in Ally’s history, with Ally earning 77 out of 100 points—5 points higher than the Financial Services Industry benchmark. Additionally, the statement, “Ally allows us to make a positive difference in the communities we serve,” received an engagement score of 84, showing that employees strongly agree that Ally is committed to giving back to the communities it serves. Benchmarks show that high scores in corporate social responsibility have a high impact on engagement.
Another great example of a successful employee giving program is Microsoft, which provides a matching program for employee donations and volunteering and hosts an annual giving campaign. Microsoft also has a robust skills-based volunteer program, Hack for Good, where employees with a passion for applying technical and business skills help address some of the world’s most pressing societal problems. In 2016, Microsoft and its employees gave $142 million and volunteered 650,000 hours. This significant community impact is likely due to the organization’s high employee giving participation rate of 74% (most companies average 20%).
Through corporate giving programs, it is possible to empower individuals to become involved in charity. By being partners in corporate giving, individuals are encouraged to give time and money as part of company culture. In turn, this helps recruit, retain, and engage employees by building stronger brand loyalty.
Kathie Patterson is the CHRO at Ally Financial.