07 Oct New 2013 Giving in Numbers Report Shows Companies Became More Strategic in Investing in Communities: Product Donations Took Center Stage
For this article we welcome guest blogger Michael Stroik, Manager of Research and Analytics at CECP.
Product donations were a vital way to keep companies engaged with their communities through the economic downturn. In CECP’s Giving in Numbers: 2013 Edition, in association with The Conference Board, we analyze how corporate giving among the world’s largest businesses evolved during the global recession of 2008 and 2009. Despite a slow economic recovery, we found that the majority of companies are already giving more than before the recession, and non-cash contributions were a significant driver of this growth. CECP includes product, pro bono service, and other non-cash resources such as office equipment or computers at fair market value in its valuation of total corporate giving.
More than ever, companies aim to utilize their core resources to support community partners. Total non-cash giving grew 70% from 2007 (the year before the recession) to 2012. Non-cash giving accounted for more than 95% of the total giving increase as cash contributions remained relatively steady throughout the recession (see page 11 in the report).
The major driver for aggregate non-cash giving (i.e., total non-cash contributions across all companies) growth was pharmaceutical companies expanding Patient Assistance Programs (PAPs). During the recession, unemployment skyrocketed—as individuals and families lost health insurance, pharmaceutical companies were in a unique position to provide prescription drug coverage to support their health needs. Pharmaceutical companies comprised more than 70% of non-cash gifts in each year since 2007.
Excluding pharmaceutical companies from our analysis indicates that cash giving still dominates for the average company, but non-cash contributions showed considerable growth since 2007. Industries differ in the average level of non-cash contributions. Consumer Staples companies (businesses that sell essential products like food, beverages, or household items) provided 40% of funding in the form of non-cash contributions in 2012. Consumer Discretionary companies (businesses that sell nonessential goods and services) provided 36% of funding in the form of non-cash contributions. Aligned with corporate sustainability efforts, these companies strive to limit the level of unused product going to landfills. Information Technology companies provided 22% of funding in the form of non-cash contributions, often in software donations to schools and other community partners.
Companies are also providing greater pro bono support to community partners. We found that half of companies offered a pro bono service program in 2012 (compared to less than a third of companies in 2008!). The median value of pro bono support in 2012 was $340,750.
All in all, non-cash contributions have become the norm in corporate giving and the efforts of Good360 are integral to the development of corporate societal engagement. CECP expects non-cash giving to continue growing in the future as the majority of giving officers at our annual Summit (held in June 2013) confirmed that their company is seeking new ways to expand or incorporate non-cash giving into their philanthropic portfolio. New funding models will likely emerge and nonprofit fundraisers should consider the full extent that companies can support their work, including cash, product, and service contributions.
Please let us know if you have feedback on Giving in Numbers: 2013 Edition! How does your experience with product donations compare to our data findings? Are corporate-community partnerships becoming more strategic? Have you seen the impact of increasing product or other non-cash donations in your community?Email us at email@example.com.