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In an era of global economic malaise, will corporations remain a reliable source of grants or other cash donations as we approach the mid-2010s?

 

This post describes how corporations give to support charitable purposes. A later post will explore several social and economic trends impacting corporate charitable giving.

 

How Corporations Give

Corporate charitable giving – including grant making – is a major component of private philanthropy. Other major components include community foundations and private foundations. Giving programs form 77.5% of corporate philanthropy; corporate foundations, as endowed by a parent corporation, form the remaining 22.5%.

 

Corporations offer support to charitable causes in many ways. Every mode of support contributes to the larger social good and thus has great value for those whom they benefit both directly and indirectly.

 

Many corporations donate products. Others provide services and expertise through their workers. Many sponsor special events or programs. Some contribute to employee donation matching programs. Still others award cash through grants or gifts.

 

Profit Drives Philanthropy

Cash donations to charity come from corporate profits. In many sectors, particularly in manufacturing and agriculture, profits are scarce as more consumers save rather than spend when faced with local and global economic uncertainties. In 2011, the median share of corporate profits given as cash donations to charity was 1%.

 

A Forecast

Corporate donation levels are likely to remain flat in 2012. A survey of leaders in corporate philanthropy revealed that 71% expected to donate no more this year than last, 2% expected to donate less, and 27% expected to donate more. In the near term, the flat donations curve does not bode all that well for organizations seeking a corporate grant or other cash support.

 

An overview of several of the larger trends affecting corporations as a potential source of cash support will appear in a later post.

 

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