U.S. companies are increasing their community investment, making it an “essential measure” of business performance, according to a new survey.
The Committee Encouraging Corporate Philanthropy reported that more than half (56%) of the CEOs it polled said their companies increased giving from 2012 to 2014. Median corporate giving totaled $18.5 million, or 0.11% of revenue, in 2014.
“While there were increases for a majority of companies on an individual basis, giving rates largely stabilized across the sector in the same period,” CERP said in a news release. “This stabilization shows that the business case for societal engagement is strong, with companies increasingly seeing community investment as essential to their operations.”
CECP, founded in 1999 by the late actor and businessman Paul Newman and others, is a coalition of roughly 150 CEOs of the world’s largest companies who are “united in the belief that societal improvement is an essential measure of business performance.”
The 2015 Giving in Numbers survey said several indicators show “the expanding application of corporate skills and resources to solving societal challenges.”
Among other things, more companies are encouraging their employees to perform pro bono services (51% in 2014, versus 40% in 2012) and participate on nonprofit boards (53% versus 43%). Pro bono and nonprofit board service were the fastest-growing volunteer programs.
Companies are also increasing the number of innovative ways they give, including cross-company collaborations, new product development, and “impact investing” — investing that seeks to make a positive impact, like the funding of clean technology startups.
Nine out of 10 attendees at the 2015 CECP Summit said that companies are implementing innovations not included the Giving in Numbers survey.
The survey also found that companies in which giving increased by 10% or more saw a 14% median growth rate in pretax profits. In addition, community investment staff size at those companies was resilient, regardless of other downsizing at the company. Team size stayed the same or grew for 65% of companies that decreased overall headcount.
The indicators “confirm that companies are adding to traditional societal investment programs to become more strategic and innovative, and infuse purpose throughout the entire company,” said Daryl Brewster, chief executive of CECP. “To these companies, purpose means making societal improvement an essential measure of business performance, and we call on companies to invest even more in this pursuit.”