Four trends in corporate philanthropy

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| 19 June 2019

When you think of causes like mental health, access to summer camps for disadvantaged kids or shelter for the homeless, what companies spontaneously come to mind?

Recent studies by Imagine Canada and Episode show that corporate philanthropy is increasingly becoming a strategic tool aimed at improving brand image and stakeholder loyalty (customers, suppliers and employees) and also for having a major impact on a social issue.

Let it be said, corporate social responsibility (CSR) is not just a buzzword! The media, activist groups and younger generations who are invading the job market, in particular, influence businesses to do useful work and to show themselves in their best light. Good news for charities, but they will have to adapt to the following trends:

Trend 1: Towards more targeted investments

Large companies define the niches they want to support: be it health, education, youth and childhood, arts or culture, they mostly opt for sectors that are related to their corporate mission. Within five years, four out of five executives say they will reassess their investments in the causes they support. Almost the same proportion say they will create their own brand image.

This trend is also marked for SMEs, although on a smaller scale, since most of them have no official philanthropy policy. Many still choose piecemeal causes to support, often based on the importance they have in the eyes of their employees.

Trend 2: Partnerships aligned with business objectives

The Imagine Canada survey goes even further, revealing that a majority of companies focus their resources on one or a few main partners. Note: “main” partner does not mean “exclusive!” Still, 42% of respondents say they are funding fewer charities than before in order to help their partners. Although the survey sample is much smaller than that of Episode, it can be inferred that companies want to get closer to the cause and use of their money, while deriving benefits for their business activities.

Trend 3: Greater philanthropic commitment for SMEs

A previous survey already mentioned the intention of SME managers to play a greater role in charitable causes. Now, Episode tells us that within 10 years, 25% of them plan to “make a significant donation far in excess of their current budget for philanthropy.” This is great news for organizations, although it should be noted that the average donation and sponsorship by SMEs is 2,000 times less than that of large companies! However, they are much more generous, all things considered, in donations of goods and services.

Trend 4: Employee and senior management engagement

This is a requirement that will give small organizations a hard time! Companies wish to involve their employees in a chosen cause and affirm that their choice to financially support an organization will be based on its ability to offer them volunteering opportunities, or even exchange experiences with customers helped by the organization. In addition, the leaders of both large companies and SMEs aspire to get actively involved: on the board or in an honorary capacity at events for the former, and as a volunteer or by holding a position within the organization for the latter.

It is not surprising that companies seek to position themselves as agents of change in their community through philanthropy: a strong association with a cause is easier to communicate, makes it possible to retain employees, customers and suppliers, and increases visibility within the business community.

Corporate philanthropic culture is becoming more refined: charities must adapt! They will have to find new sources of investment, particularly from the newer entrepreneurial generation in SMEs who are more focused on social responsibility; better assert the credibility and influence of their cause; are creative in encouraging employee participation in their activities; and above all, meet the growing expectations of their corporate benefactors regarding the proper use of their money and the concrete results it brings.