Corporations help boost record-setting $316-billion charity year
Corporate giving helped push charitable donations to a record $316.23 billion in 2012, according to the recently released annual report on philanthropy produced by Indiana University’s Lilly Family School of Philanthropy.
The report was produced for the Chicago-based Giving USA Foundation.
The amount was seen as a sign of an improving economy and increased business profits. It broke the old record of $311.06 billion set in 2007 before the global recession, the report said.
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Overall, donations climbed 3.5% from 2011, and some of that was driven by a 12.2% increase in corporate philanthropy, up to $18.15 billion compared with $16.18 billion in 2011.
Although he cited increased profits as one reason for the increase, one expert said that businesses are responding to changing demands and expectations.
“It’s a new kind of strategy,” Patrick Rooney, associate dean of academic affairs for the Lilly Family School of Philanthropy, said in an interview.
“A lot of corporations have realized that giving can be a very salient factor in terms of being attractive to customers, shareholders and employees,” Rooney added.
Some of the motivations are also practical. So-called in-kind giving of surplus products by businesses has increased compared to the number of corporations that are giving cash donations.
Those businesses “don’t have the carrying costs of the inventory they don’t need,” Rooney said, “and they also get the good will from those donations, and the tax benefits.”
One of the fastest growing segments for in-kind corporate giving is the pharmaceutical industry, Rooney said, “to give people an opportunity to get medications free or at deeply discounted prices.”
Corporate giving is still dwarfed by other kinds of philanthropy and still represents a very small percentage of company profits.
Corporate giving in 2012 amounted to about 6% of all giving, Rooney said, up from “typically 4% or 5%.”
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