Drops in Corporate Giving Exceed Forecasts

By Miriam Kreinin Souccar

Big corporations are cutting back their charitable donations more than they had expected to just six months ago.

In a survey conducted this month, 52% of corporations reported that they have cut their charitable giving because of the recession. Just six months earlier 42% of those same companies had predicted that their budgets for charitable giving would decline this year, according the LBG Research Institute, a nonprofit that conducts research on community investment. The move comes despite a big upswing in pleas for funds, with over 72% of the corporations reporting an increase in grant requests.

Corporations aren’t turning their backs completely. More than 84% of those surveyed say they are encouraging more employee volunteerism to offset the decline in company cash donations, and more than 48% have increased the number of volunteer events this year. Meanwhile, 15% report that they are increasing their in-kind donations of such things as meeting space and office equipment; and 12% are giving away more products.

What cash is still flowing is being given away under higher scrutiny. Almost half of the corporations report that they are emphasizing partnerships with nonprofits over straight cash donations. Half also note that they are paying more attention to measuring the impact of their largesse, holding the nonprofits accountable for results.

“It’s not just check writing anymore,” said Donna Devaul, executive director of LBG Research Institute. “Corporations want measurable results and are actively seeking nonprofit partners that can produce win-win, impactful programs.”

More than 70 major U.S. corporations participated in the survey.