Why We Give Back

More Companies Are Giving Back as They Realize Charitable Giving Isn’t Just Good for the Receiver, It’s Also Good for the Brand

In today’s marketplace, corporations are donating more than they ever have historically. Similarly, more brands are realizing the importance social sentiment has on their brand reputation and are beginning to establish corporate giving programs, employee contribution matches, foundations and grant opportunities.

The Nielsen Global Survey on Corporate Social Responsibility polled 30,000 consumers in 60 countries on how passionate they were about sustainable practices when it comes to purchase considerations.

More than half of global respondents (52%) said they had purchased at least one product or service in the past six months from what they deemed a “socially responsible company”. The findings also revealed that two-thirds of the “sustainable mainstream” population chose products from sustainable sources over other products.

Today’s consumers are invested and knowledgeable about the brands they purchase and expect companies, both large and small, to play a meaningful role in society. In today’s marketplace, that means more than just how a company treats employees, but how much it actually contributes to the overall good of society.

In a 2016 report by CECP (a CEO led coalition that helps companies transform their social strategy), Giving in Numbers, 272 multi-billion dollar companies with aggregated revenues of $7.5 trillion were surveyed on their corporate giving. In total, $24.5 billion was given in charitable contributions. While this is a large number, when compared to their combined revenue, it only amounts to .3 percent.

In a similar special report on corporate giving released in June 2016, the Chronicle of Philanthropy surveyed 150 top companies in the Fortune 500, using historical philanthropy data, tax records and independent verification, to publish a list of the most generous public companies.

According to the Chronicle, “The 68 corporations in the report gave a total of $4.8 billion in cash donations. However, most companies gave less than 1 percent in cash relative to their pre-tax profits.”

This means that of the top earning companies in the U.S., only a very small portion actually gives away a meaningful percentage of its revenue.

That said, there are many companies that did not make this list, and should have for the sake of comparison. These would be the smaller, more community-centric Fortune 1000. While there is a plethora of research regarding the Fortune 500 and the amounts they donate, very little information exists on the Fortune 1000.

Surprisingly, these companies give back substantial amounts of their overall revenue compared to their Fortune 500 colleagues. One such company, Sanderson Farms, a Fortune 1000 company, might not compete dollar-for-dollar with the larger Fortune 500 corporations. However, when comparing the percentage of Sanderson Farms’ overall contributions with that of its gross revenue, the company makes a sizable dent in philanthropic giving.

In 2016, Sanderson Farms donated a total of .67 percent of its net income to charity. Moreover, this number does not reflect the over 350,000 pounds of chicken it gave away that same year.  Not to mention ice, boxes, and other resources given when helping to respond to Hurricane Matthew and flooding in both Louisiana and Texas.

When comparing apples to apples, Sanderson Farms’ percentage of overall cash contributions is equal to, or greater than a majority of those Fortune 500 companies featured in the Chronicle’s list.

“We just feel like we have a responsibility to give back where we see the greatest need,” said Lampkin Butts, President and COO of Sanderson Farms. “As a business, if you are going to operate within a community, you need to be willing and able to give back to the members of that community. And as a business, we are responsible to each and every one of the communities where we operate. We owe it to our employees and their families.”

Research shows a direct correlation between charitable contributions and growth as a result of annual giving. In CECPs report, companies most committed to contributing to society also performed better financially. In fact, “companies that increased their total giving between 2013 and 2015 by 10 percent or more had higher median growth rates in terms of revenue.”

As consumers and employees alike begin demanding more from companies, the growing force behind “capitalism-with-a-conscience” has given way to historically high corporate contributions. Hopefully, as more companies and investors begin to see the link between philanthropy and the bottom line, they will realize that a strong social strategy not only helps those in need, but is also good for the brand and the business.