Giving by Service Companies Spurs Increase in Corporate Contributions

Corporations increased their giving by a median of 4.8 percent last year, according to a new study. The median value of company contributions of cash and products last year was nearly $33-million, which means half the companies gave less than that amount and half gave more.

The increase, spurred by giving by service companies, is the result of strong profits, improved measures for tracking and accounting for gifts, and new philanthropic commitments, especially to programs overseas, says the report by the Committee Encouraging Corporate Philanthropy, in New York.

The Chronicle’s most recent survey of corporate giving revealed a median increase of 6 percent in cash gifts among large companies.

The Committee Encouraging Corporate Philanthropy based its research on data provided by 136 companies, 55 of which ranked among the 100 largest in terms of revenue, according to Fortune magazine. Contributions from those companies totaled more than $11.2-billion in cash and product gifts last year, says the report. The median total giving among the large companies was $50-million.

Health and Social Services

Awards to health and social-service charities (which accounted for 31 percent of donations) topped the list of giving priorities, followed by education (25 percent) and community and economic development (14 percent). Gifts to environmental groups (3 percent) proved least popular with companies.

Giving to international groups is on the rise, according to the report. Among the 48 companies that provided data in the past three years, 9.6 percent of donations in 2004 helped people overseas; in 2006 that figure increased to 12.9 percent. Manufacturing companies are leading the change; 18 percent of their overall giving goes to programs overseas, compared with 4 percent of service companies’ giving budgets. A possible reason for their leadership, the report suggests, is that manufacturing companies often have employees or factories overseas.

A sharp divide exists in giving patterns between service and manufacturing companies, the report said. Of the 97 companies that provided data for the past two years, 35 percent said they had increased their giving by 10 percent or more. Two-thirds of those respondents were service companies.

But not all companies reported an upward tick in contributions, with 21 percent of respondents saying they had cut contributions by 10 percent or more. Manufacturing companies accounted for nearly half of those repondents.

Most of the cuts were due to an absence of gifts for disaster relief, says the report. After increasing their giving levels in 2005 to make grants to help victims recover from Hurricane Katrina and the Asian tsunamis, many companies in 2006 returned to “normal” giving levels, says the report. Other reasons companies gave for decreased contributions included corporate spinoffs and department closures, completion of multi-year grants, and a lower overall production of goods, leaving fewer extra products to donate.

Soaring profits helped lift donations by service companies, while manufacturing companies reported cutting noncash gifts — which represent a third of their contributions — by 25 percent.

Information-technology companies reported the biggest rise in giving from 2005 to 2006 (18 percent), followed by utilities (7 percent), and makers and distributors of food and drink products, as well as other companies (6 percent). Health-care companies decreased their giving the most (11 percent).

Among the 97 companies that provided data in the past two years, fewer corporations put money into their foundations in 2006 than did so in 2005 and the dollar amount was lower, says the report. In 2005, 62 companies added a median of $8.2-million to their corporate foundations, while in 2006 the figure dropped to 54 companies, committing a median of $7.3-million to foundations. Less money allocated for disaster relief explains the decrease, says the report.

The report, “Giving in Numbers,” is available free for download on the Committee Encouraging Corporate Philanthropy’s Web site.