Corporate social responsibility (CSR) is the popular term used to describe actions taken by for-profit businesses to assess and take responsibility for the company's effects on environmental and social wellbeing. CSR encompasses not only corporate philanthropy, but also environmental issues, employee engagement, and corporate governance. Multiple studies have shown that consumers prefer to patronize businesses that demonstrate social responsibility.
When it comes to philanthropy, corporations give in various ways, including cash donations or grants, in-kind gifts, sponsorships, cause-related marketing, and pro bono services. Companies also like to promote workplace giving through employee matching gifts programs and other efforts that encourage their employees to give their time and/or money to charity.
Cash donations or grants are usually distributed either 1) directly through the company via a corporate giving program, or 2) through a company-sponsored foundation.
- Corporate giving programs – These are administered by the company itself, often through a dedicated department such as Community Relations or CSR. It may be difficult to find information about an in-house corporate giving program, such as what they support, who they’ve given to and how much, unless the company chooses to publicize it.
- Company-sponsored foundation – The company can set up a separately-administered private foundation. A company-sponsored foundation is subject to the same rules as other foundations and must file IRS documents that disclose their giving. It is more likely to have a webpage or website, outlining what they will and won’t fund, and how to apply – but not always. Like any private foundation, a company-sponsored foundation can choose to only support pre-selected organizations.
Some companies have both. The corporate giving program gives them more discretion about who to give toand how much, since it is not subject to IRS foundation rules. A company could also organize a public charity or give through a donor-advised fund. How a corporation organizes its giving is mainly determined by tax and legal factors that really don’t impact donors.
For more information on the difference between these vehicles, see“What is the difference between a company-sponsored foundation and a corporate direct giving program?”
Grantseekers should always keep in mind when approaching corporations that, unlike foundations, they don’t exist to give money away. Many are usually looking to benefit in some way from their philanthropy. A proposal to this type of funder should emphasize how support for your project will help the company achieve its own goals.
Corporate giving is motivated by a combination of altruism and self-interest. Most companies tend to favor:
- Nonprofits that operate in and improve the quality of life in the geographic locales in which they operate.
- Organizations or causes that their employees support with their own time and money. (See Workplace Giving.) Sometimes a CEO’s pet cause directs the company’s contributions; for example, Dave Thomas, the founder of the Wendy’s chain, was adopted as a child and the company is a major supporter of adoption and foster children.
- Causes that align with their business interests – for example, Home Depot gives grants and assistance to build homes for veterans.
While many enjoy the glow of being a good corporate citizen, some companies are cautious about revealing too much about their philanthropic activities, for fear of:
- being inundated with requests they cannot fill.
- raising the expectations of potential beneficiaries in a good year, because a lean year may follow.
- angering shareholders who may perceive the company's charitable activity as giving away profits, or who don’t approve of the organizations or causes supported
- losing public support by giving to something considered controversial
Learn more about corporate fundraising with Introduction to Corporate Giving. Available free as an online webinar or in-person class.
To find corporate funders and details about their giving programs, use Foundation Directory Online, our searchable database of U.S. grantmakers. Subscribe online to search now.
Visit our Foundation Center libraries and Funding Information Network locations to use these resources for free.
More articles about corporate fundraising can be found under Funding Resources: Corporations
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