Emerging Trends in Corporate Philanthropy January 15, 2014

Michael StroikManager, Research and Analytics

CECPmstroik@cecp.co

Today’s Agenda

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About CECP• CECP Organizational Beliefs• Giving in Numbers Annual Trends Report

Corporate Giving Trends• Corporate Giving Before, During, and After the Global Recession• New Jersey Benchmarking Statistics

Employee Engagement Trends• Recent Trends in Employee Engagement

AboutCECP

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Who We Are Nonprofit organization founded by Paul Newman in 1999

as the Committee Encouraging Corporate Philanthropy International forum of corporate CEOs and chairpersons

What We Believe Philanthropy is a long-term investment with the potential

to drive significant societal and business returns Executive leadership is essential for successful

community engagement Corporations have unique resources that can support

communities

Who is Engaged 149 CEOs and Chairpersons Engaged companies from each industry

Our Strategic Focus Represent the CEO voice Own the standard on philanthropy practice and

measurement

Introduction to CECP

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Corporate Giving Standard Survey and Trend Report

• Annual survey of Global 1000 companies on the scope and scale of their philanthropy and employee engagement programs.

• Survey conducted each spring in association with The Conference Board.

• 240 companies participated in the most recent survey on 2012 contributions. The survey on 2013 contributions launches in January.

• Includes corporate cash giving, corporate foundation giving, and non-cash contributions (including pro bono service).

• The survey, valuation guidance, and report are all available as free downloads at cecp.co/research.

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Corporate Giving Trends

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Business performance has slowly rebounded since the global recession began in 2008, but in 2012 companies did not earn as much as they did in 2007.

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Business Has Been Slow To Recover As Profits Dropped in 2012

Median Revenues

Note: Inflation-Adjusted, 6-Year Matched-Set Data, N=93

Median Pre-Tax Profits

$ B

illio

ns

Note: Inflation-Adjusted, 6-Year Matched-Set Data, N=96

2007 2008 2009 2010 2011 2012

$30.56

$26.95$26.41

$28.31

$29.45$29.90

2007 2008 2009 2010 2011 2012

$3.76

$1.94$2.14

$3.03

$3.63

$2.84

$ B

illio

ns

Despite a slow economic recovery, the majority of companies increased giving from 2007 to 2012.

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Companies Are Giving More Than Before The Global Recession

Distribution of Companies by Changes in Total Giving Between 2007 and 2012

Note: Inflation-Adjusted, 6-Year Matched-Set Data, N=96

Per

cent

age

of C

ompa

nies

Decre

ased

by

more

than

25%

Decre

ased

bet

wee

n 10%

and 2

5%

Decre

ased

bet

wee

n 2%

and 1

0% Flat

Incr

ease

d bet

wee

n 2%

and 1

0%

Incr

ease

d bet

wee

n 10%

and 2

5%

Incr

ease

d by

more

than

25%

24%

11%

3% 3%

7%

14%

38%

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Non-Cash Giving Growth Drove Overall Giving Increase From 2007 to 2012

Note: All Figures in Billions, 6-Year Matched-Set Data, N=96

Non-cash giving as a percentage of total giving grew from 57% in 2007 to 69% in 2012.

2007 2008 2009 2010 2011 2012

$6.16 $6.05 $6.98

$8.55 $9.43

$10.46

$4.63 $4.53 $4.29

$4.80

$4.93

$4.81

Non-Cash Cash

$11.27

$13.35

$14.36$15.27

$10.58$10.79

57%

69%

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Companies Aim To Support Communities With Unique Non-Cash Resources

Aggregate Percentage of Non-Cash Giving to Total Giving

YearAll Companies

(N=96)

All Companies Excluding

Pharmaceuticals (n=89)

2007 57% 28%

2008 57% 30%

2009 62% 32%

2010 64% 32%

2011 66% 37%

2012 69% 39%

CECP member companies often support community partners with non-cash contributions, including product, pro bono service, and other in-kind contributions.

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Reasons for Giving Increases1. Increased Non-Cash Contributions2. Improved Business Performance3. Increased Commitment to Education

Initiatives

Reasons for Giving Decreases1. Company-Wide Cost Reductions2. Reduced Disaster Spending3. Refreshing Focus Areas

Reasons For Giving Increases and Decreases in 2012

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Companies Support Education More Than Any Other Program Area

For the first time since the introduction of Giving in Numbers, in 2006, Education (K-12 and Higher Education combined) became the most popular program area, inching ahead of Health and Social Services for the top spot on the list.

Note: Average Percentages, N=172

Civic & Public Affairs; 5%Comm & Econ De-

velopment; 13%

Culture & Arts; 5%

Disaster Re-lief; 3%

Education, Higher; 12%

Education, K12; 17%

Environ-ment; 3%

Health & Social Services; 28%

Other; 14%

Civic & Public Affairs

Comm. & Eco. Dev.

Culture & Arts

Education: Higher

Education: K-12

Environment

Health & Social

Sciences

Disaster Relief

Other

2007 6.4% 13.4% 8.8% 13.3% 16.1% 3.6% 27.3% 0.7% 10.4%

2008 6.0% 12.8% 7.7% 13.9% 15.8% 4.2% 27.3% 2.6% 9.7%

2009 4.1% 16.6% 6.9% 13.6% 15.1% 4.4% 28.9% 1.0% 9.4%

2010 5.0% 13.8% 6.5% 13.3% 15.8% 4.9% 29.8% 2.8% 8.1%

2011 5.0% 15.0% 5.7% 14.0% 15.3% 4.9% 30.1% 3.0% 7.0%

2012 4.8% 15.3% 5.3% 14.1% 15.8% 4.5% 28.3% 2.7% 9.2%

Overall Chang

e

Giving Allocations Shift Most Notably in Community & Economic Development and Culture & Arts

Note: Average Percentages, 6-Year Matched-Set Data, N=51

<1% <1% <1%

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Companies today are more likely to invest the majority of their philanthropy programs in individual program areas compared to before the global recession.

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Companies Are Focusing Philanthropy Programs To Achieve Deep Societal Impact

“I helped to start CECP with the belief that corporate America could be a force

for good in society.”- Paul Newman

Percentage of Companies Investing 50% or More to One Program Area (N=51)

2007 22%

2008 18%

2009 25%

2010 31%

2011 29%

2012 33%

New Jersey companies supported Health & Social Services considerably more than the average global company.

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New Jersey Company Program Area Allocations

Civic & Public Affairs; 4%

Comm & Econ

Devel-opment;

6%Culture & Arts; 2%

Disaster Relief;

8%

Education, Higher; 6%

Education, K12; 11%

Environ-ment; 1%

Health & Social Services; 50%

Other; 11%

New Jersey Companies

Civic & Public Affairs; 5%Comm & Econ De-

velopment; 13%

Culture & Arts; 5%

Disaster Relief; 3%

Education, Higher; 12%

Education, K12; 17%

Environ-ment; 3%

Health & Social Services; 28%

Other; 14%

All Companies

Note: Average Percentages, N=9 Note: Average Percentages, N=172

Employee Engagement

Trends

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Companies Match Gifts Primarily Through Workplace Giving Campaigns and Year-Round Policies

8% of employees participated in the typical Year-Round Policy while 44% of employees participated in the typical Workplace Giving Campaign (medians).

Note: Average Percentages, N=181

Year-Round Policy; 41%

Workplace Giving Campaigns; 39%

Dol-lars for

Doers; 9%

Disas-ter Re-

lief; 6%

Other ; 5%

2012 Matching-Gift Program Allocation

Studies show that employees with favorable impressions of a company’s philanthropy program are three times more likely to be truly loyal to the company. In addition, employees who volunteered through employee-volunteer programs strengthen relationships with co-workers and feel happier overall.

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Research Indicates That Engaged Employees Are More Loyal To Their Employers

2012 CGS Volunteer Data

All Companies

(N=188)

Northeast Companies

(n= 61)

New Jersey Companies

(n=11)

% of Companies Offering a Paid-Release-Time Program 57% 66% 55%

% of Companies Offering a Flexible Scheduling Volunteer Program

55% 54% 45%

2012 CGS Matching Gifts Data (Medians)

All Companies

(N=175)

Northeast Companies

(n=61)

New Jersey Companies

(n=11)

Total Matching Gifts $1,700,000 $1,670,000 $981,075

Matching Gifts as a % of Total Cash Giving

11.99% 13.03% 13.03%

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Companies Strive To Engage Employees In Community Investment Programs

More companies offered on-company-time and outside-company-time employee volunteer programs in 2012 than in 2007.

Note: Matched-Set Data, N=53

53%

62%

68%64%

60%

70%

43%

51%

57% 57%58%

57%

2007 2008 2009 2010 2011 2012

Offered Paid-Release-Time Program Offered Outside-Company-Time Program

Percentage of Companies with Paid-Release-Time and Outside-Company-Time Volunteer Programs

Paying Employees While Volunteering Is More Popular In The Northeast And Midwest

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66% of companies based in the NE

offer a Paid-Release-Time

Volunteer policy

51% of companies based in the South offer a

Paid-Release-Time Volunteer

policy

45% of companies based in the West

offer a Paid-Release-Time

Volunteer policy

64% of companies based in the

Midwest offer a Paid-Release-Time Volunteer

policy

Note: Among companies based outside of the U.S., 47% of companies offer a Paid-Release Time policy

A Growing Percentage Of Companies Offer Domestic and/or International Pro Bono Programs

Since CECP began tracking pro bono programs in 2008, companies have increased offerings.

Note: 6-Year Matched-Set Data, N=68

Percentage of Companies with Pro Bono Service Engagement Programs

2008 2009 2010 2011 2012

32%

37%40%

35%

50%

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Financials and Information Technology companies provided the highest average levels of total pro bono support as a percentage of total non-cash gifts.

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Service Companies Have Traditionally Been More Engaged With Pro Bono Work

All Companies, N=117

Consumer Discretionary, n=24

Consumer Staples, n=15

Energy, n=5

Financials, n=18

Health Care, n=17

Industrials, n=10

Information Technology, n=10

67%

93%

59%

30%

77%

91%

60%

16%

7%

35%

19%

5%

29%

17%

10%

7%

41%

35%

4%

4%

11%

Product Donations Pro Bono Service Other Non-Cash

83%

Note: Telecommunications Services companies are excluded due to a small sample size, Average Percentages.

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Paid Release Time Programs Stand Out As The Most Successful Employee Volunteer Program

Most Successful Volunteer Engagement Programs in 2012

Domestic International

1. Paid Release Time 1. Paid Release Time

2. Dollars for Doers 2. Company-Wide Day of Service

3. Company-Wide Day of Service 3. Employee-Volunteer Awards

4. Employee-Volunteer Awards 4. Flexible Scheduling

5. Flexible Scheduling 5. Team Grants

Regions Differ In Approach To Employee Engagement Programming

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Paid-Release-Time programs

were most popular in the Northeast

and Midwest

Family Volunteering

programs were most popular in

the South.

Dollars for Doers programs were most popular in

the West.

Paid-Release-Time programs

were most popular in the Northeast

and Midwest

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Industries Differ In Approach To Employee Volunteer Engagement

Volunteer Engagement Offerings by Industry

Industry Most Prevalent Program% of Companies Offering

Program

Consumer Discretionary Employee Volunteer Awards 66%

Consumer Staples Family Volunteering 64%

Energy Dollars for Doers 86%

Financials Paid-Release-Time 73%

Health Care Employee Volunteer Awards 75%

Industrials Employee Volunteer Awards 67%

Information Technology Flexible Scheduling 65%

Materials Board Leadership 50%

UtilitiesRetiree Volunteering and

Family Volunteering77%

Why Are Companies Offering More Employee Engagement Programs?

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Millennials (individuals born between the early ‘80s and the early 2000s) are holding companies accountable for engaging them in community programs.

Open Discussion

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