Philanthropy (n.) – “Goodwill to fellow members of the human race; especially an active effort to promote human welfare.” (Merriam-Webster)
Written above is the standard definition of philanthropy; essentially an act of charity. So what is the difference between an act of philanthropy when done by an individual versus a corporation? In short, there is no difference.
Corporate Philanthropy is the act of a corporation or business promoting the welfare of others, generally via charitable donations of funds or time.
With corporations donating more than $17 billion per year to nonprofit organizations and charities, corporate philanthropy has become a hot button topic, and a source of income that charities shouldn’t overlook.
Some brief points about corporate philanthropy:
- Charity and philanthropy are often used interchangeably, however, this is not always the case. According to “Philanthropy in America: A History,” the difference between the two is “charity relieves the pains of social problems, whereas philanthropy attempts to solve these problems at their root.” Corporate philanthropy is often focused on treating the issues that nonprofit organizations exist to serve.
- Corporate philanthropy can come through a variety of channels – monetary donations or gifts of time and talent (in-kind donations). These may be more commonly known as matching gifts, volunteer grants, and any other type of product or service donation that is non-monetary.
So, we’ve offered a brief synopsis of corporate philanthropy, but how does this apply to you, the nonprofit organization? Let’s get into more detail on how corporate philanthropy most commonly occurs – through monetary donations.
Types of Corporate Philanthropy
There are several channels of corporate philanthropy, as mentioned above. These can include matching gifts and volunteer grants, which are two types we’ll explain in further detail below. Corporate philanthropy can also include (in short), product and service donations.
For example, Microsoft donates, on average, about $2 million per day in software to nonprofits around the world! The key to Microsoft’s corporate philanthropy successes is really about communication.
Matching Gift Programs
Matching gift programs are what we like to call “free money for nonprofits!” These are charitable giving programs set up by corporations in which the company matches donations made by employees to eligible nonprofit organizations. The types of matches depend on what the company’s policies are, but some companies will match the donation, 1:1, and others might even triple the donation (i.e. if an employee donates $50 to a nonprofit organization, their employer may write a check for $150 to the same organization.) Each employer is different, so donors should always check to see what kind of matching gift programs their employers may offer.
Matching gift programs are considered corporate philanthropy in that the monetary funding to nonprofit organizations is intended to help serve a mission that, once solved, would better humanity.
Volunteer Grant Programs
Volunteer grant programs are different in that corporations may not give money right away to a nonprofit organization because they are encouraging volunteerism of their employees in communities where they live and work. Through these programs, companies will provide monetary grants to organizations where employees volunteer on a regular basis. There are two primary structures to these programs:
- A corporation will donate a certain dollar amount per hour to an organization where an employee volunteers
- A corporation will set a threshold so that once an employee volunteers for a certain number of hours, the corporation will provide a donation to that nonprofit.
Volunteer grants, like matching gifts, are a type of corporate philanthropy. We like to think that these volunteer programs count twice since a nonprofit organization would not only benefit from the volunteer hours incurred by corporate employees, but also via the monetary donation that comes once the volunteerism has already happened.
Top Corporate Philanthropy Programs
Thousands of companies nationwide (and many internationally) offer some kind of corporate philanthropy program – you just have to know where to look.
Here are the top 10 forms of corporate philanthropy:
- Matching gifts
- Fundraising matches
- Dollars for doers
- Team volunteer grants
- Community grants
- Volunteer support programs
- Automatic payroll deductions
- No strings attached annual grant stipends
- Internal employee fundraising campaigns
- Annual giving