What is Corporate Philanthropy?
Corporate philanthropy is the act of corporate giving (money, resources, or time) for the purpose of charitable causes by businesses or organizations for the betterment of society. The giveaway can be in the form of financial donations, or in-kind donations, among others.
It is a voluntary effort undertaken by organizations to positively impact society by addressing various social, community, and environmental requisites. Corporate philanthropy can be designed in various forms including corporate foundations, cause-related marketing, employee volunteer programs, and more.
What are the Types of Corporate Philanthropy?
There are various types of corporate philanthropy which include the following:
➔ Matching Gifts
Matching gift programs are a popular form of corporate philanthropy where companies match the charitable contributions of employees to eligible non-profit organizations.
Under these programs, when an employee makes a contribution towards the betterment of society to the nonprofit of their choice, then companies match the equivalent amount with employees to give back, which is within a predetermined budget.
The non-profit organization must be registered under 501(c)(3) nonprofit and be aligned with the company’s giving priorities. The staff member should be employed for a specified term or make a minimum contribution to qualify.
If the donation qualifies for the matching gift program, the company will match the employee’s contribution, often on a dollar-for-dollar basis. Some companies may have a maximum limit for matching donations.
➔ Volunteer Grants
Volunteer grant programs, also known as ‘Dollars for Doers’ or ‘Volunteer Time Off’ (VTO) grants, are the amount paid by companies to Nonprofits Organizations on the basis of hours spent by its employee volunteering for a specified nonprofit.
Volunteering activities involve tasks such as mentoring, serving at a food bank, participating in environmental clean-up efforts, or any other volunteer work aligned with the company’s guidelines.
The time volunteered is tracked by the organization or the non-profit organization provides a letter confirming the number of hours spent by the organization’s employees in volunteering. After approval, a predetermined dollar amount per volunteer hour or a fixed grant amount for reaching a certain threshold of volunteer hours is contributed to the non-profit organizations by the company.
➔ The Community Grants
These are a form of corporate philanthropy that provides financial assistance to nonprofit organizations, or community groups in which they operate.
There is a wide range of community-focused initiatives that involve healthcare, education, art and culture, environment conservation, youth development, and more.
The community grants can be contributed in both in-kind assistance as well as financial support depending upon the company’s budget and guidelines.
These are granted one-time, or on a multi-year basis and can vary from smaller to larger amounts of donations.
➔ Employee Grants Stipends
Such kind of grants are temporarily provided to the employees by the company in case of any medical emergencies, natural disasters, personal crises, unexpected expenses, or more.
The company decides the criteria of the grant depending on the length of employment, financial needs, and other factors. The criteria vary for different organizations on the basis of their size, budget, and strategy.
➔ Volunteer Support Initiatives
This is a corporate philanthropy that encourages employees’ morale by rewarding them for active participation in volunteering activities in company-specified non-profit organizations.
Employees are rewarded in various ways like such as employee spotlights, internal newsletters, social media recognition, award programs, and more.
It not only promotes employees’ societal impact but also fosters employee engagement, contributing towards a positive work culture.
Any monetary grant that is contributed towards the betterment of society is considered a financial donation. These are usually exempted from taxes.
Any kind of donation except monetary grants is considered an in-kind donation. In-kind donations include goods and services, leveraging assets for social impact, providing facilities or space for operational purposes to non-profit organizations, providing professional expertise, offering various training sessions, workshops, and scholarships to individuals or organizations, and more.
➔ Corporate Scholarships
Corporate scholarships are a type of corporate philanthropy in which companies provides educational grants in the form of financial rewards to academic pursuits in the academic realm which includes students.
These are provided to employees, their children, or any specific students who fulfill the criteria or requirements of the company.
Companies define the criteria of scholarships according to certain factors which might include, financial requirements, academic accolades, demographic factors, and more.
➔ Corporate Sponsorships
It is a form of cause-related partnership or association in which companies provide assistance in the form of finance, resources, or other assets in exchange for exhibiting their brand image in the event of the former, grasping marketing opportunities, etc.
Few corporate sponsorships types include event sponsorships, sports sponsorships, cause-related sponsorships, and more.
➔ Cause-related Corporate Philanthropy
When companies contribute a part of their earnings to non-profit, charitable, and social organizations associated with them and which aligns with companies’ objectives and goals to increase visibility in the market as well as contribute to society’s well-being, it is called cause-related marketing.
For example, some companies contribute ₹ 2 on every purchase of its product to nonprofit organizations/charitable trusts associated with it.
Corporate Philanthropy – How it Benefits Employee Engagement?
Corporate philanthropy is not only beneficial for the organization but has the following benefits:
➔ Eases Team Building
The corporate philanthropy process strengthens the team-building factors within an organization among its employees as it brings together all staff to contribute to a noble cause with proper planning and strategy.
➔ Fosters Ethical Responsibility
The ethics and morale of employees too rise by contributing to charitable organizations and taking part in volunteering activities and causes they care about. So, it is essential for the company to process the corporate philanthropy program.
➔ Out-of-the-Box Proficiency
The proficiency of the employees also enhances as they put their skills and talent to use, outside the workplace. They even engage in activities that are different from their regular job requirements which refreshes their thinking, surges creativity, and boosts their morale.
➔ Greater Exposure
Employees engage in charitable and volunteering activities which gives them opportunities to get a close-knitted view of the issues of the society, support causes they care about and hence increase their exposure.
➔ Pride and Loyalty
The program of corporate philanthropy introduces pride in an employee towards a company’s work ethics and culture as it initiates activities that not only enhance social responsibility and morale within employees but earn employees’ loyalty too.
A company’s goodwill escalates both internally and externally by putting the corporate philanthropy process into action.
What are the benefits of Corporate Philanthropy?
The importance of the corporate philanthropy process is extensive, which includes:
- Government Support – It can be availed as the cause of donations is for the betterment of society.
- Tax Benefits – Any contributions made for social causes are subject to tax deductions so the business gets benefitted from it.
- National Recognition – Social presence of a company becomes prominent through the corporate philanthropy process; hence giving recognition and enhancing the goodwill of the company in the country.
- Builds Community Assistance – By supporting a community in financial or in-kind ways, a company earns support from them.
- Increased Sales – People invest in those companies that are considerate of society. Hence, the sales of products of such companies go on the rise.
- Employee Engagement – Employee engagement surges with volunteering activities that give rise to employee morale and strengthen their mental health as they support causes of their interests and contribute to society’s well-being.
- Enhances Productivity – With increased engagement, the employees would also be productive, leading to increased profits.
- Stronger Customer Relation – Customers favour those companies which have an inclination towards the betterment of society.
How to Create a Corporate Philanthropy Program?
It is very important to plan your steps before implementing the corporate philanthropy process. If you are someone who is worried about the program implementation, then we have your back.
➔ Plan a Strategy
The first and foremost step for a company is to plan a strategy to execute the corporate philanthropy process which should include the blueprint of the associated charitable trusts, non-profit organizations, and more, which should align with the goals and objectives of your company.
➔ Choose the Members
You can choose the employees/members for suitable activities by taking into consideration their volunteer support initiatives, interests in social activities, reasons to support causes they care about, and more.
➔ Make a Budget
The next step you can focus on is to prepare a budget for the program; a fixed amount of charitable monetary resources is to be spent or what percentage of profit is to be provided for contribution.
Financial resources are vital as they are crucial for the business workflow. So it is essential to plan a budget that matches the overall expected incurred to-be expenses of the business for the year.
➔ Framing Execution Outline
The next step is framing the outline to execute the corporate philanthropy program and choosing which type of corporate philanthropy program would match the company’s needs, objectives, and goals. You can choose from various nonprofits and other organizations seeking charity and fulfill the requirements of the company to be qualified for the corporate philanthropy program.
➔ Make it Visible
There is an age-old saying in PR, “Public relations is not just about telling your story; it’s about showing the world what you stand for through your actions.” Similarly, through corporate philanthropy and program implementation, your company can showcase its work culture and ethics to the world and make a huge impact on the tightly-locked competitive market.
➔ Access the Matrix & Keep Track
Last but not least, keep track of the corporate philanthropy program and make sure to access the program matrix that if it matches the company’s needs or not to make suitable alterations on time.
Sow the Seeds!
Now that you got a detailed insight into what is corporate philanthropy, it is time to make contributions and give back to society or return the favours it contemplates by providing its resources for the betterment of your business.
Choose your company-aligned type of corporate philanthropy, which may include matching gifts, volunteer grants, donations, community grants, or more. You can match your bunch of philanthropy and make eminent positive alterations in your business. So why wait? Go sow the seeds of the corporate philanthropy process and utilize it to make an impactful change in your organization as well as society. After all “what goes around, comes around”.