News and analysis
October 27, 2010

Nearly 60% of Big Companies Cut Their Giving in 2009, Report Says

General Electric Co. committed $25-million to community health centers in 2009.

A majority of big companies cut their giving in 2009, according to a study released Wednesday by the Committee Encouraging Corporate Philanthropy, in New York.

Fifty-nine percent of companies gave less last year, the study found, with 40 percent reducing their giving by at least 10 percent.

Those figures were based on 95 companies that provided data for both 2008 and 2009. Over all, the survey gathered information from 171 businesses.

Donations of cash were the first to be cut as corporate leaders required companywide spending cuts, foundation endowments dipped, and transfers to company foundations decreased. Sixty-six percent of companies gave less cash last year, up from 47 percent that cut back on cash giving in 2008.

But not all businesses cut back in 2009. Just over a third (36 percent) of businesses in the survey increased their contributions, with 20 percent of companies stepping up their giving by at least 10 percent. Five percent donated the same as the previous year.

And despite the cost cutting at many companies, total cash and product giving by the businesses with two years of data increased last year by 7 percent, to $9.93-billion.

That was due largely to corporate mergers (which meant that some businesses in the survey suddenly had much larger philanthropy budgets) and increased donations of medicine from pharmaceutical companies, according to Alison Rose, manager of standards and measurement at the Committee Encouraging Corporate Philanthropy.

Cash gifts from corporate foundations also increased, by 6 percent, because a handful of funds stepped up their giving to groups providing basic needs, she said.

By comparison, 68 big companies that responded to an August Chronicle survey on corporate giving reported that they had increased their cash and product giving by nearly 5 percent, although cash gifts dropped by 7.5 percent.

New Patterns of Giving

The Committee Encouraging Corporate Philanthropy’s survey also examined how the recession was influencing companies’ approach to philanthropy.

Some companies said they redirected some of their money and products to groups that serve people hard hit by the economic downturn.

Businesses in the survey gave, on average, 29 percent of their cash and products to health and social-service charities, the most of any type of group. That was a 2-percent increase over 2008.

Support for community and economic development also rose last year, from 13 percent to 14 percent, on average, of company’s giving.

Some companies expanded existing programs or started new ones to help those in need, Ms. Rose said.

For example, Eli Lilly and Company, the pharmaceutical giant in Indianapolis, made it easier for people to qualify for its program that helps uninsured patients. At the behest of its employees, Pfizer, in New York, started a program to help people who had recently lost their health insurance, she said.

Companies are also doing more to encourage their employees to give and volunteer, according to the survey.

Ninety-two percent of companies said they had a formal program that makes it easier for employees to volunteer. The share of businesses that increased the amount of paid time off for employees to volunteer increased from 2007 to 2009 by 18 percent, according to the study.

As they pared their grant making, many companies also cut the money they spend to manage their corporate giving.

Fifty-three percent of companies reduced their management and program costs last year, the majority by 10 percent or more.

The study, Giving in Numbers: 2010 Edition, is available on the Committee Encouraging Corporate Philanthropy’s Web site.