A study authored by the Indiana University Lilly Family School of Philanthropy provides insight into why U.S. corporations make charitable contributions outside the country. The research, commissioned by Virginia-based Global Impact, suggests decisions are primarily driven by local community needs and the company's financial performance in the country. October 9, 2013
ALEXANDRIA, Vir. – Today, Global Impact released the results of a research report, “Giving Beyond Borders: A Study of Global Giving by U.S. Corporations,” at the U.S. Chamber of Commerce Business Civic Leadership Center's (BCLC) annual corporate social responsibility conference. Global Impact President and CEO Scott Jackson is set to speak at the BCLC event this afternoon and will share details of the study's findings with attendees. The study, commissioned by Global Impact and researched and written by the Indiana University Lilly Family School of Philanthropy, explores the scope and depth of international giving by U.S. corporations.
“Much progress has been made on a number of key global health issues in recent years, but traditional sources of public funding are on the decline; there is a strong need for increased corporate participation in global philanthropy,” said Jackson. “This study demonstrates there is alignment between the goals of corporate philanthropy and global development; all parties benefit.” he continued.
The study examines factors that influence corporations in their decisions to invest in projects, organizations and communities outside the United States. It specifically addresses the nature of corporate-nonprofit partnerships, qualities that companies look for when searching for nonprofit partners and what makes partnerships successful.
“Giving Beyond Borders” found the two major determining factors that propel U.S. corporations to make social investments abroad are needs in local communities (78 percent of 27 companies surveyed said this was a priority) and the company's financial performance in that country (cited by 52 percent of 27 companies surveyed).
“Eighty-six percent of companies that gave internationally said they plan to increase or maintain the size of their foreign giving budget in their next fiscal year,” said Una Osili, Ph.D., director of research for the Lilly Family School of Philanthropy. “That is an encouraging sign for the future of global corporate-nonprofit partnerships. The study shows that deepening evaluation of nonprofits and strengthening the sustainability of these relationships will be important to their success.”
The study also showed that, when creating their giving programs, companies tend to align their business goals and the charitable passions of their stakeholders. In fact, the report explains, corporations seek nonprofit partners that align with their own philanthropic and business goals in the following categories: mission (77 percent), geographic footprint (51 percent) and focus area (40 percent).
The main attribute companies look for when selecting a nonprofit partner is a demonstrated record of producing effective and efficient results (68 percent of 53 companies surveyed responded with this as their top priority). Corporations also weigh a nonprofit's accountability (25 percent), reputation (17 percent), and size and capacity (6 percent).
“Companies participating in the study also identified assistance with vetting potential nonprofit partners and with developing strategies for engaging their employees in global partnerships as among the resources they need to expand or strengthen their international philanthropic commitments,” Osili said. “This report provides insights that we hope will help both corporations and nonprofits create positive, lasting social change in the global community.”
Among other key findings:
-Nearly 20 percent of the 27 companies that donated internationally gave only in developing countries.
-Asia and the Pacific region attracted the most attention from companies that donated internationally, with a majority giving to this area.
-Companies with a larger share of their sales revenue coming from overseas made more international gifts and gave more money internationally at the million-dollar-and-above level between 2000 and 2010, compared to companies with more than 90 percent of sales revenue from the U.S.
The research study, conducted over the past eight months (January through August, 2013), was conducted in three parts: secondary research on FORTUNE 100 companies, an online survey of 59 FORTUNE 500 companies, and in-depth interviews with four major U.S.-based companies.
Scott Jackson explained, “For corporations, this data suggests global philanthropy is not only charitable, but a smart business investment. For charities that are facing challenges given uncertainty in the U.S. economy and seeing less funding from government, this increase in corporate interest is coming at an opportune time,” he added.
About Global Impact
Global Impact raises funds to meet critical humanitarian needs around the world. In partnership with nearly 100 major corporations and more than 300 public sector entities, Global Impact provides funding to more than 80 U.S.-based international charities through innovative partnerships and employee giving programs. The organization also provides advisory services and solutions to meet the unique giving needs of organizations and donors.
Global Impact serves as the secretariat of the Global Health Council and the Hilton Humanitarian Prize Laureates Collaborative, as well as administrator for one of the world’s largest workplace giving campaigns, the Combined Federal Campaign-Overseas. Since 1956, Global Impact has generated more than $1.6 billion to help the world’s most vulnerable people. Follow Global Impact on Twitter or “Like” us on Facebook.
About Indiana University Lilly Family School of Philanthropy
The Indiana University Lilly Family School of Philanthropy is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The School offers a comprehensive approach to philanthropy through its academic, research and international programs and through The Fund Raising School, Lake Institute on Faith & Giving, and the Women's Philanthropy Institute. Follow IU Lilly Family School of Philanthropy on Twitter or “Like” us on Facebook.
Source: Indiana University Lilly Family School of Philanthropy