Companies are giving more money to charity than ever before — despite the absence of natural disasters like Hurricane Katrina and the Asian tsunamis.
Corporate giving increased 4.7 percent to $10.6 billion during 2006, compared to 2005. And according to the Committee Encouraging Corporate Philanthropy, 56 percent of 113 surveyed companies — including 44 Fortune 100 corporations — reported an increase in giving, and about 13 percent of companies increased giving by more than 30 percent.
Health care companies give most frequently, said Lindsay Siegel, spokeswoman for the organization.
“They really dominate — giving hundreds of millions in cash and products on average per year, as compared to a much lower median total giving across all companies,” she said.
Smaller companies tend to give more as a percentage of pre-tax profit, Siegel said. Companies with profits of less than $1 billion give an average of 1.94 percent, compared to about 1 percent for all companies.
The increase in giving shows a shift in corporate philosophy, said Regis University Professor Nancy Fell, who works in the graduate school’s nonprofit management department.
“As businesses move more and more toward sustainability and sustainable development, they’re looking at a corporate model that includes developing tri-sector partnerships,” she said. “There’s a growing awareness of the environment around them, and they are taking a look at the responsibility they have in their community.”
The partnerships involve government, business and nonprofits working together to solve a problem instead of simply providing a “band-aid solution,” Fell said.
That effort is apparent in the way companies give, Siegel said. Most companies give cash — less than a quarter provide in-kind donations.
Western Union supports charities though in-kind donations, its foundation and employee volunteer programs.
Luella Chavez D’Angelo, the foundation’s executive director, said the company’s philanthropy mirrors its business model.
“We see people moving from Turkey to Germany, from the Phillipines to Kuwait, from China to Brazil,” she said. “And so we focus our efforts on both countries: the countries that the money is sent from, and the country that receives it.”
Western Union’s efforts reflect the sustainable community efforts most companies focus on — working to make communities around them stronger, Fell said.
For instance, the company’s foundation, which is located in Englewood, created a grant program in Mexico for women whose husbands immigrated to the United States, but stopped sending money home.
“We created a program for community greenhouses,” Chavez D’Angelo said. “This is a particularly arid section of Mexico, but the women all work together to grow produce in the greenhouses. They make enough to feed their families, with some left over to sell at the mercado.”
The foundation has given more than $40 million to 1,500 non-governmental organizations in 70 countries — including $4.4 million to groups in Colorado.
Businesses reap social returns from their giving, Siegel said.
“Companies are stronger if their communities are strengthened through matching gifts, in-kind donations, corporate volunteerism and monetary contributions,” she said. “They get the benefits: better education, health, community vitality.”
Businesses also benefit because corporate social responsibility can equal community goodwill, Siegel said.
“Companies with strong philanthropy programs are more successful in the ‘war for talent,’ as they consider employee recruitment and retention,” she said. “They use philanthropy to build their brand, and for business strategy — such as building goodwill and a license to operate.”
That’s one of the reasons Western Union’s foundation also focuses on the countries that immigrants move to, Chavez D’Angelo said. For instance, one program focuses on Chinese immigrants to the Sao Paulo region of Brazil.
“People move there, don’t speak the language, don’t know where to go for services,” she said. “This grant created an NGO (non-government organization) that creates those connections — it’s a lifeline for these new immigrants.”
Western Union’s efforts are echoed by other corporations, which are becoming more aware about the connections between sustainable business practices, strong communities and corporate images, Fell said.
“Consumers are becoming more conscious of what companies are about — what they do and their effect on the environment around them,” she said. “They’re doing their market research, and a big decision is based on their corporate responsibility.”
In fact, consumers are paying so much attention to sustainability, that three markets are experiencing substantial growth: organic food, socially responsible investing and green building.
“Philanthropy is a natural extension of that movement,” Fell said. “It’s just one step in creating a sustainable work environment, a sustainable community.”