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Trends in Corporate Giving

Year-over-year model helps execs make a difference

Despite the country still reeling from its recent recession, many companies have not slowed down in their creative efforts to give locally to their clients and customers. Alaska operators are no exception. From in-kind donations of equipment to local schools, to high dollar corporate financial gifts to regional universities, or even sponsorship of cultural heritage preservation efforts, Alaska’s corporate operators make giving a part of their culture.

The unusual efforts of one land-services company serving the oil and gas industry is indicative of a growing trend toward substituting gifts of philanthropic social responsibility—donated in the name of the recipient client or customer—instead of a more traditional, tangible gift over the holidays.

In the case of the land-services company, the owner chose to give each of its largest clients a “Gift Ark” from Heifer International, a seventy-year-old Arkansas-based charitable-aid provider founded by a Midwest farmer who sought to send livestock to the world’s poorest regions. It was his belief that providing tools and skills, such as farming, can make a long-term difference. The Ark package includes two of several types of local livestock, as well as bees, chicks, rabbits, and the like. Given in the name of the gift recipient, the collection of livestock itself goes to a needy community. The concept is designed to care for an impoverished community, to provide ongoing income opportunities for its people, and to encourage sustainable farming worldwide.

A drastic departure from a case of champagne, a luxury pen set, or expensive dinner party, such gifts reflect the trend toward increased non-cash corporate giving with a philanthropic flair.

 

Non-Cash Gifts Increase

Such trends are analyzed in the national report, “Giving in Numbers: 2013 Edition,” which offers senior executives a tool to analyze and grow their own companies’ corporate giving programs. The annual benchmark publication is developed each year by the business research association The Conference Board in partnership with the organization CECP, which was formed in 1998 by Paul Newman and business leaders John C. Whitehead, Peter L. Malkin, Walter Shipley and others, originally known as the Committee Encouraging Corporate Philanthropy. With a current membership of about 180 CEOs and chairpersons from companies that represent some $10 billion in annual corporate giving, the organization’s mission is to help companies directly affect local communities through philanthropy. The 2013 report constitutes the ninth report by the group concerning such trends.

Along with facts and figures analyzing the previous year’s contribution data, the publication also offers executives and managers tools and benchmarks to help deploy responsible charitable giving across their own organizational structures. Such tools include a step-by-step guide and template for employing a year-over-year giving model.

The 2013 report indicates some $20 billion in total contributions last year, reflecting data from 240 companies. Findings include that charitable contributions from participating companies increased 59 percent from 2007 to 2012, with some 38 percent of participating companies having increased their giving by one-fourth or more in that period. Companies that gave non-cash contributions—products, use of company facilities, and other assets—in 2007 had increased their non-cash gifts 38 percent by 2012, according to the report.

Companies are finding increased favor with corporate gifts to education. The academic arena of higher education and K-12 education constituted the “most funded program area” for all companies that reported data. The academic sector received 29 percent of companies’ charitable allocation.

Perhaps one of the more unusual areas where companies provide donations is the paid-release-time volunteer program, where companies encourage—and pay—the workers to participate in local volunteer efforts to improve the local community. That sector of corporate giving has increased from 53 percent of participating companies offering such donation in 2007 to 70 percent in 2012.

With 2013 figures, researchers will determine if the companies’ 2012 forecasts came true. In 2012, 40 percent of participating companies anticipated an increase in their corporate giving, with 18 percent planning a reduction and 42 percent anticipating no change in contribution levels, according to the report.

 

Alaska-Sized Gifts

One of the largest and most prominent examples of corporate giving to come to fruition last year was undeniably the BP Asset Integrity and Corrosion (AIC) Laboratory, reflecting a $1 million donation from BP Alaska in partnership with the University of Alaska Anchorage. The company and university also teamed up for the summer robotics camp, sponsored by BP Alaska and administered by the university. The camp taught an average of forty students a week from area middle and high schools basic robotics skills and sought to cultivate an interest in engineering.

Another milestone in corporate giving in Alaska came last year with the state’s namesake airline offering a decade-long commitment of corporate contribution to the University of Alaska Anchorage. In March 2013, the university’s chancellor announced naming the new on-campus arena the Alaska Airlines Center in honor of the agreement. As part of the deal, the airline offered a $1 million scholarship endowment for student athletes, plus a $5.3 million athletics sponsorship contract, with a portion of the overall agreement offering travel for the athletic teams. In announcing the arena name, university officials recognized the company’s more-than-quarter-century of sponsorship and support of the UAA athletics program.

 

Cruise Industry Giving

Two cruise companies that feature Alaska itineraries partnered last fall to donate $1 million to the University of Alaska Foundation to fund three primary areas: research and academic efforts related to the health of the sea, scholarships to help Alaskans seek higher education, and tourism and travel industry-related training for Alaskans.

Both companies had previously sent some of their corporate giving dollars north, with Princess Cruises donating $100,000 in 2009 to the Marine Advisory Program at the university. Holland America Line years earlier donated $15,000 toward a study that eventually resulted in the university’s Culinary Arts & Hospitality Program, which currently graduates roughly forty students each year, according to the university. In more recent years, Holland America Line has given more than $1 million to the university.

That interest in supporting education and training is reflected in the national CECP report, which attributes the growth in education donations to recognition by companies of the “pipeline” that exists from education to developing an available workforce. It appears from the data gathered that companies are wishing to help train and grow their own future labor pool of talent by developing on-target training programs through donations to regional academic institutions present in their operations footprint.

 

Preserving Alaska’s Culture

Many times, the beneficiaries of corporate gifts are those who comprise the contributor’s local client base. Last August, the Bethel-based Association of Village Council Presidents’ cultural heritage center, known as the Yupiit Piciryarait Museum, was the recipient of a $10,000 donation from First National Bank Alaska. The bank, Alaskan owned and operated since 1922, operates its Kuskokwim Branch in Bethel, among the bank’s thirty branches stretched across eighteen Alaska communities. The museum serves as a local repository of cultural artifacts and art from the Yukon-Kuskokwim Delta area, according to the bank.

According to the national CECP report, support of culture and the arts comprised 5 percent of the charitable giving among participating companies. Civic and public affairs comprised an additional 5 percent of corporate gifts.

 

Supporting Improved Health and Welfare

Interest in improving health and social services resulted in 28 percent of charitable corporate gifts tracked by the CECP report in 2012. In Alaska, Northrim Bank provides one example of a company that focused a portion of its giving toward the health and welfare sector. The company contributed $2,000 for building improvements to the Safe Harbor Inn, which provides transitional housing for Alaska’s homeless families and disabled residents. Northrim also contributed $2,500 to the final phase of the Arc of Anchorage’s “Five Homes in Five Years” program to provide housing for disabled and low-income Alaskans.

Last September, Northrim contributed $15,000 for the new Covenant House Alaska, which provides Alaska’s youth with shelter from the streets. The new facility houses both an emergency youth shelter and youth management center, according to a release by the bank.

 

Give and Give Again

The concept of social responsibility through corporate charitable gifts is not a new idea, but it is one that is gaining new traction with managers and executives who see the long-term value from strengthening the communities where they operate. Whether through an education grant, a workforce development program, or a training facility, today’s executives have unique tools available to make a difference—not just during the holidays, but year-round and from year-to-year.

Attorney and author Nicole A. Bonham Colby writes from Ketchikan.

This first appeared in the April 2014 print edition of Alaska Business Monthly magazine.

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