Giving by Biggest Companies Rose 18% in 1999, New Study Finds

By DEBRA E. BLUM

Donations to American charities by 117 of the nation’s biggest companies rose

by an average of 18 percent in 1999, according to a new study by the Conference Board, in New York. But a report on the study estimated that when the final numbers are tallied, giving by big businesses in 2000 would turn out to be flat.

The Conference Board, a nonprofit research group whose activities are financed by businesses, gathered data on the cash and in-kind gifts that 209 large American manufacturing and service companies made to charity in 1999. The companies reported gifts to nonprofit groups in the United States and abroad totaling more than $5.4-billion.

Among the 117 companies that provided giving figures for both 1998 and 1999, contributions to American charities rose from $1.87-billion to $2.2-billion. That followed a 10-percent increase among a similar group of companies from 1997 to 1998, and a 20-percent increase from 1996 to 1997.

But in surveys answered last February, 151 of the companies said that cash contributions in 2000 would be, on average, only 3 percent more than donations in 1999. And few companies predicted any change in their noncash giving.

In its report, the Conference Board noted that forecasts of in-kind gifts are unreliable because such donations depend largely on what products and other inventory companies have available from year to year.

Corporate contributions in 1999 hit record levels in several categories, including giving as a percentage of pretax profits — one measure of corporate generosity.

Share of Pretax Profits Donated

Among the 100 companies that reported earnings figures for 1999, domestic contributions represented a median of 1.2 percent of domestic pretax income — meaning half gave away a higher share of pretax profits and half a smaller share. That was an increase over the 0.9 percent median in 1998 and was the highest median figure reported by companies in more than 10 years.

Measured against total pretax income from operations here and abroad, domestic contributions grew less significantly, from 0.6 percent of income in 1998 to 0.7 percent in 1999.

Total international contributions are on the rise, however.

Of the 75 companies that provided details of their giving abroad, the median donation of cash and in-kind contributions was valued at $842,000, up from $696,000 in 1998, and was three times the median amount given in 1989 before adjusting for inflation.

About half of the international contributions in 1999 were made in the form of noncash gifts, such as company products. Among pharmaceutical companies, gifts of drugs made up 90 percent of donations abroad.

Education Receives the Most

Noncash gifts represented a growing share of contributions made by companies to American charities as well. Businesses reported to the Conference Board that 28 percent of their 1999 domestic donations were in forms other than cash, including products, equipment, real estate, and intellectual-property rights. That was more than double the percent reported for noncash gifts in 1990.

Corporate giving as measured against companies’ total U.S. employment was also on the rise during the last decade. Companies in 1999 gave a median of $439 per employee, up 24 percent from 1998, and the largest figure reported in at least 10 years.

As has been the case in most years, education was the top cause among companies. Schools, colleges, and other educational organizations received 35 percent of corporate cash and in-kind contributions in 1999. Health and human-service groups formed the second-largest category of recipients, receiving 30 percent of total gifts. Civic and community-affairs groups were next with about 14 percent, and arts and cultural organizations brought in 9 percent.

Copies of the report, Corporate Contributions in 1999, can be obtained by contacting the Conference Board’s customer-service department at (212) 339-0345, or orders@conference-board.org, and referring to publication No. 1284. The report costs $45 for Conference Board members, $180 for nonmembers, and $20 for academics or other researchers.

CORPORATE PHILANTHROPY, 1999

CORPORATE PHILANTHROPY, 1999

SOURCE: Conference Board