Corporate Performance Linked to Giving ‘Beyond Borders’
16 October 2013 at 8:14 am
The distribution of U.S companies’ philanthropic dollars overseas is influenced by a corporation’s financial performance in those countries, a new study suggests.
The report, “Giving Beyond Borders: A Study of Global Giving by U.S. Corporations,” found that 52% of companies cited regional performance as a key factor in decision-making on social investments abroad, surpassed only by needs of local communities in that country (78 per cent).
Companies with a larger share of their sales revenue coming from overseas made more international gifts and gave more money internationally at the million-dollar-and-above level between 2000 and 2010, compared to companies with more than 90 per cent of sales revenue from the U.S.
The study, by the distributor of U.S. corporate donations Global Impact and Indiana University Lilly Family School of Philanthropy, also showed that nearly one fifth of the companies that donated internationally gave only in developing countries.
Asia and the Pacific regions attracted the most attention from companies that donated internationally, with a majority giving to this area.
“Much progress has been made on a number of key global health issues in recent years, but traditional sources of public funding are on the decline; there is a strong need for increased corporate participation in global philanthropy,” said Global Impact President and CEO Scott Jackson.
“Eighty-six percent of companies that gave internationally said they plan to increase or maintain the size of their foreign giving budget in their next fiscal year,” said Una Osili, Ph.D., director of research for the Lilly Family School of Philanthropy.\
“That is an encouraging sign for the future of global corporate-nonprofit partnerships. The study shows that deepening evaluation of nonprofits and strengthening the sustainability of these relationships will be important to their success.”
Companies tended to align their business goals and the charitable passions of their stakeholders, the report suggested.
Corporations sought Not for Profit partners that aligned with their own philanthropic and business goals in terms of mission (77 per cent), geographic footprint (51 per cent) and focus area (40 per cent).
The main attribute companies looked for when selecting a Not for Profit partner was a demonstrated record of producing effective and efficient results with 68 per cent spotlighting it as their top priority.
Corporations also weighed a Not for Profit’s accountability (25 per cent), reputation (17 per cent) and size and capacity (6 per cent).
“This study demonstrates there is alignment between the goals of corporate philanthropy and global development; all parties benefit,” Jackson said.
“For corporations, this data suggests global philanthropy is not only charitable, but a smart business investment..”
The study was conducted between January and August 2013 through secondary research on FORTUNE 100 companies, an online survey of 59 FORTUNE 500 companies, and in-depth interviews with four major U.S.-based companies.
Read the full report here.