Not long ago, corporate philanthropy didn't involve much more than writing a check to United Way or the local opera. Nowadays that's changing. Blame corporate shareholders for tightening the purse strings, or credit Barack Obama and an entire generation raised on public service. All are forcing companies to get creative, to focus on making more of a difference while spending less cash.
So, for instance, companies may allow their employees to volunteer while on the clock, or they might reward customers for their volunteerism. Many are giving goods rather than cash and focusing more on areas in which they have expertise, so that $600-an-hour consultants aren't painting walls but are actually consulting for organizations that otherwise couldn't afford their services. And, in what is perhaps the most profound shift, some companies are thinking more long term and aligning their philanthropy with their core business strategies, looking for ways to do good at the same time they improve their bottom lines.
The entire notion of corporate giving is "starting to get a lot fuzzier," says Margaret Coady, director of the Committee Encouraging Corporate Philanthropy, an international forum "focused exclusively on corporate philanthropy." CEOs are now asking, "What is the role of a corporation in society, and how is that role sustainable? And that's moving very far away from what people traditionally think of as philanthropy," she says. As a result, "philanthropy is getting integrated into the strategy of all the departments throughout the company, as opposed to just being a group of 20 people who write checks."
Some of the new developments in corporate philanthropy are being driven, in part, by the stubborn recession. According to a survey by the CECP, 60 percent of companies cut their philanthropic donations from 2008 to 2009, and most of those trimmed them by more than 10 percent. That has helped fuel the move toward giving time and goods rather than money. According to a survey conducted by the Chronicle of Philanthropy, when companies were asked how the recession has changed their philanthropy, by far the largest number said they were encouraging employees to volunteer more. "Companies and employees are seeing their communities in greater need, but they don't have as much cash to give," Coady says.
But volunteerism is also increasingly in the zeitgeist, and companies that want to attract the best recruits are trying to incorporate that into their corporate culture. "This generation of 20-somethings coming into the workforce have gone through high school and colleges that have service volunteerism requirements. And they define philanthropy by action, not cash," says Evan Hochberg, national director of community involvement for Deloitte, an accounting and consulting firm. Two years ago, Deloitte started allowing employees to include volunteer work for nonprofit organizations as paid time, and staffing the work employees do for nonprofits the same way the firm does for paying customers. Deloitte set a three-year goal to do $50 million worth of volunteer work by 2011.
President Obama's focus on volunteering has helped nudge companies as well. Starbucks encouraged its customers to pledge 1 million hours of volunteer time during Obama's first five days in office, offering a free cup of coffee to anyone who did five hours of work through the HandsOn Network, a volunteerism clearinghouse. "Volunteerism is more in the public dialogue" because of Obama, Coady says.
Companies are also focusing more on specific causes to which they think they can contribute particular skills or knowledge. The clothing retailer Gap realized it had more to offer than just expertise in folding T-shirts, says Bobbi Silten, the corporation's chief foundation officer. "In our 41-year history, we've given hundreds of thousands of young people their first job, and so this was a competence we could draw on," she says.
So Gap started the program This Way Ahead, which teaches job skills to poor youth in New York and San Francisco. So far, 400 young people have completed the program, and 170 of them earned internships in Gap and Old Navy stores, Silten says. And like Deloitte, Gap uses its management experience to help nonprofit organizations, allowing staff members of nonprofits to take management courses developed for Gap executives.