December 16, 2014–This year CECP engaged in more than 1,000 individual conversations with the world’s leading CEOs and companies, analyzed nearly 300 corporate giving surveys, and published key reports on corporate societal engagement. These insightful connections have uniquely positioned CECP to capture and share some of the most exciting trends of 2014:
Purpose Leads to Performance: Companies are evolving their culture and community investment strategy to reflect the notion that leading with values and a purpose that aligns with those of their employees and customers accelerates business performance and societal impact. Redefining corporate purpose beyond profitability is the way forward. CECP research indicates that the shift flows from an increase in facets of the business engaging and putting resources behind societal investment (cash contributions grew 28% from corporate budgets, while foundation cash gifts only increased by 2%). Further companies with overall increased giving by more than 10% since 2010 also increased median revenues by 11% from 2010 to 2013, compared to a 3% decline in revenues for all other companies.
Focusing for Impact: Companies are adapting the same management best practices to corporate societal engagement as they do in other areas of their businesses to drive more effective and efficient social impact. The result is more strategically driven programs tied to their core business and employees’ values. CECP also sees fewer and deeper corporate-nonprofit partnerships, with more rigorous measurement and evaluation goals for the social and business impact of a company’s community investments. This trend is reflected in the significant percentage of companies (76%) that reported measuring societal outcomes and/or impacts of their community investments in 2013.
Evolution of Employee Engagement: CEOs at CECP’s 2014 Board of Boards voted employees as the most influential stakeholder group when deciding to expand their companies’ investments in the community. As the demographics, priorities, and expectations of employees evolve, the ways in which companies support and invest in communities are becoming essential in developing a meaningful culture that attracts and retains top talent. Millennials, in particular, place a high value on an employer’s corporate philanthropy and employee engagement opportunities. Companies recognize this fact and increasingly aim to meet those expectations. We’ve seen employee engagement evolve to meet diverse workforces in many ways: 1) providing deeper engagement opportunities through pro bono and skills-based volunteering; 2) offering employee choice of causes in matching gift programs; 3) leveraging technology to provide programs that better resonate with millennials; 4) contributing greater institutional support in partnership with HR; and 5) exploring the global expansion of their programs.
The Move to Mandate: One of the most compelling trends CECP sees globally is the move by countries and regions to mandate certain aspects of corporate societal engagement. Companies with a current or growing multinational footprint need to understand this evolving landscape to inform their societal investment strategy and support compliance teams trying to stay abreast of new developments.
Some emerging markets, including Brazil and Indonesia, have regulations that determine a specific level or type of corporate societal investment, similar to India’s new “2 percent” CSR requirement. In Europe the mandate trend is seen in a requirement on non-financial disclosure and reporting. Learn more about this topic, addressed in greater detail in the free Giving Around the Globe report.
It’s Not Just About Cash: Non-cash contributions, including product donations, pro bono services, and other non-cash assets have increased as a percentage of overall corporate giving. A deeper link between these programs and core business strategy and values drives this shift, and is further supported by the increased focus on employee engagement. From 2010 to 2013, CECP research showed participation in paid volunteer programs grew substantially, with an increase of 37% of paid volunteer hours reported and 8% more companies now offering these initiatives. Within pro bono, we see companies from all industries leveraging the skills of their staff, with half of all companies offering pro bono opportunities as part of their employee engagement programs (up from 34% from 2010 – 2013). For those companies reporting a dollar value for pro bono support, 67% increased cash contributions over that same time frame.
Elevation of the Corporate Responsibility Role: Leaders in corporate citizenship have long been the link between community members and business leadership, and given the above trends in culture, strategy, and employee engagement, companies are increasingly recognizing the value of blending this department more deeply across their businesses. These leaders have the responsibility of translating community needs and making the business case for societal investments to their C-suite, while simultaneously inspiring and mobilizing employees to address those same community needs. These roles are becoming increasingly strategic as the field becomes more professionalized.
Where the Investment is Going: Research highlighted in Giving In Numbers: 2014 Edition indicates the following allocations by area for corporate societal investment from 2013: Education at 28%, Health & Social at 27%,Community & Economic Development at 14% (the highest growth area by 34% over this time period), Culture & Arts and Civic Affairs each at 5%, Environment and Disaster relief both at 3% with the remaining allocated for other programs and initiatives.