Companies Collect Data to See if They’ve Reached Charitable and Business Goals

As corporations become more focused in their grant making, they’re also trying to become better at tracking what their gifts have accomplished.

In a recent survey of 261 companies, CECP, a coalition of CEOs encouraging more corporate philanthropy, found that 76 percent of the companies are measuring the impact of their grants.

Johnson & Johnson, for example, has a team of people tracking the company’s goal of helping 120 million women and children per year through 2015 through projects such as supplying treatments for intestinal worms and providing health information for pregnant women over mobile phones. The company made the pledge to support the United Nations 2010 call for a renewed effort to achieve the Millennium Development Goals.

“We’ve improved our electronic reporting system, and we’re doing workshops with our partners to make sure that we have an accurate count,” says Michael Bzdak, the company’s director of corporate contributions.

The company is already plotting next steps. Last month, Johnson & Johnson committed $30-million to improve newborn health and increase newborn survival through 2020, with an initial focus on China, Ethiopia, India, and Nigeria.

Meanwhile, academics and some groups like CECP are doing their own measuring to determine whether corporate-giving programs contribute to a company’s value. Some shareholders believe companies would be better served by putting more of that cash back into the business.

CECP found that the most generous companies in 2010—those in the top 25 percent—had significantly higher revenue growth and profitability over the following three years than the least generous companies (those in the bottom quartile).

Margaret Coady, CECP’s executive director, says her group isn’t trying to argue that philanthropy is a lever to increase profitability, but she does believe giving programs signal to the investing community that a company is well run and planning for the future.

“Some see a tradeoff: You reinvest profits into traditional revenue-generating products and services, or you invest in the community,” Ms. Coady says. “This shows there’s not a tradeoff. You can do both.”