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Disaster Relief Drives Growth in 2017 Corporate Giving

Giving USA noted that in 2017, corporate giving grew at a faster rate than giving from individuals, foundations, or bequests. Moreover, giving to disaster relief efforts contributed substantially to this sector’s charitable growth. What drives corporations to give, and how do they decide where to invest their charitable contributions? How can organizations who have benefitted from corporate philanthropy continue to engage this type of donor?

2017: The Year of Domestic Disasters

Natural disasters are unpredictable, and they hit hard and rapidly. In the second half of 2017, the United States experienced multiple disasters in relentless succession. Hurricanes Harvey, Irma, and Maria slammed Texas, Louisiana, Florida, the US Virgin Islands, and Puerto Rico in August and September. Wildfires burned out of control in Northern California in October and in Southern California in December. Loss of life and property damage were extensive. And while individual donors responded generously, corporations were especially charitable. For example, companies gave over $157 million to Harvey relief efforts, and 69 of the total gifts were for $1 million or more. Consumers, employees, and donors now expect companies to demonstrate some commitment to the common good. As such, it has become standard (and profitable) policy to manage public perception through philanthropy. Disasters in particular offer corporations an opportunity to fulfill this public expectation quickly and visibly.

Disaster Relief - % of Pretax Profits

Geography Matters

Hurricane Harvey affected one of the biggest population centers and the headquarters of numerous energy companies. Flooding damaged homes, businesses, factories, and refineries in Houston, coastal Texas, and Louisiana. Notably, the geography of Harvey’s impact affected who responded and how generously. Puerto Rico and the US Virgin Islands are both highly populated areas that lack a strong corporate presence, and the impact of this absence is profound: Corporations gave only $24 million in relief to Hurricane Irma and Maria victims in Puerto Rico—a fraction of the $157 million that they provided for Harvey victims.

Have Giving Patterns Changed Over Time?

Giving USA estimated that 86% of all giving is from individuals (making outright gifts), bequests, and donor-advised funds or private foundations. While overall giving increased by a substantial percentage during 2016, giving as a percentage of pretax profits increased modestly and remained below the highs reached during the 1980s. Corporate giving, on the other hand, has remained between 5% and 6% of total overall giving since the 1970s. Many companies have significantly raised their giving profiles in recent years, but they will always be strategic about using philanthropy to further their brand, their reputation, and their influence. That said, many wonder whether the significant tax rate reduction signed into law in late 2017 will increase corporate philanthropy.

How Can Nonprofits Plan for Corporate Giving Opportunities?

If your organization benefitted from increased corporate giving following a natural disaster, you might already be actively stewarding those donors. This is important because giving is likely to be episodic. You can engage these donors by telling stories about the impact of their gifts on the victims and their lives. You could also find ways to connect to the company’s core values (usually expressed in their communications), or honor the company’s volunteers and matching gifts program.

To maintain longer-term relationships with companies, organizations might find ways that their brand aligns with that of the corporation. Another strategy is to pursue a multi-faceted relationship that speaks to the needs of the corporation. For example, a university might support the company’s goals around recruitment and research. An arts or cultural organization could publicize their corporate sponsorship, thereby allowing the companies they support to leverage, publicly, their association with such prestigious institutions. And a human services organization might collaborate with a corporation to recruit volunteers.

In sum, it is important to articulate your values and understand how they align with the values that your corporate donors want to show their customers, employees, and the public. Importantly, geography matters, so communicating to potential corporate partners how you bring something unique to the region they serve is vital.

To learn more, watch GG+A’s webinar on the Giving USA Report here.

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About the author

Jim McKey

Senior Vice President

Jim McKey, Practice Area Leader for Independent Schools and Senior Vice President, brings more than 25 years of experience in fundraising and administration for academic institutions. Jim has extensive experience in planning and managing campaigns; evaluating current programs; defining successful donor strategies; working with governing boards; and identifying opportunities and solutions…