Despite turmoil in the credit markets and growing economic uncertainty, corporate philanthropy increased in 2007 and is expected to stay at those levels in 2008, a new survey from the Committee Encouraging Corporate Philanthropy finds.
According to the survey, final results from which will be published in the fall, large multinational corporations increased their giving by 5.6 percent in 2007 — from a median of $24.7 million in 2006 to $26.1 million in 2007. And, perhaps reflecting a shift toward new strategic focus areas and an increased level of attention to community investment, more than half the companies that reported lower profits in 2007 increased their giving, as did seven of the eight companies that experienced losses.
Indeed, the weakening economy did not seem to have a significant impact on most companies' giving. In response to an anonymous CECP poll of forty CEOs, 83 percent indicated that the economy was of little importance in determining how much a corporation should give, and none felt it was very important. At the same time, 89 percent indicated that companies should have mechanisms in place (e.g., cash reserves or endowed foundations) to sustain their charitable giving during periods of weak financial performance.
CECP projects that despite what appears to be an earnings slowdown in 2008, most companies will likely maintain their 2007 levels of giving, with some expected to increase or restructure their budgets to help community partners hardest hit by the economic slowdown.
"Historically, companies have made strong commitments to respond during periods of higher unemployment and elevated community need," said CECP executive director Charles Moore. "In addition to sustained cash contributions, companies have also become more creative at better identifying and leveraging resources such as in-kind product donations and employee pro bono service to greater benefit community partners."