3 Surprising Effects of Corporate Philanthropy and Volunteering

What do you really get when your company gives back? Warm feelings and potential tax breaks aside, your corporate giving program could also have three unintended effects: making it easier to recruit (and retain) workers, improving employee attitudes, and boosting the bottom line.

How corporate philanthropy resonates with the generations

In 2016, Fortune magazine published a survey of more than 2,000 workers that looked at the impact a company’s charitable gifts had on the workforce. The results: approximately two-thirds of millennials indicated charity matters to them personally. Specially, respondents noted it could impact their decision regarding where to work.

• 18-34 years old: 66% would prefer to work for a company that gave to charity
• 35-44 years old: 59% would prefer to work for a company that gave to charity
• 45-64 years old: 47% would prefer to work for a company that gave to charity

Research by Cone Communications went a step further, indicating that 76% of millennials would also be willing to take a pay cut to work for a responsible company engaged in philanthropy.

Corporate gifts and employee engagement

Aside from hiring do-gooders, researchers at the University of Notre Dame learned that employee attitude and emotional engagement can also be affected by corporate philanthropy. The manner in which the “gift” was given, however, was equally as important. Specifically, they found:

• Higher levels of corporate giving were linked to better employee attitude.
• Company-wide charitable endeavors had a greater positive effect than individual employee-selected charitable activities.
• Hands-on activities/volunteer opportunities in which employees worked directly with the charity showed a stronger positive attitude correlation when the company also gave to the charity.

Giving back to a community gives back to a company’s bottom line

Additionally, companies that actively give back to their communities have the potential to see those dollars impact their bottom line. Research by Michael E. Porter and Mark R. Kramer titled “The Competitive Advantage of Corporate Philanthropy” explains it like this: when a company gives to a nonprofit organization, that nonprofit is better able to extend its reach to more recipients in need. Individual recipients can then shift their own focus to meeting other needs and goals -- and the community as a whole benefits.

Similar to Maslow’s hierarchy of needs, if a person is lacking food, he or she becomes micro-focused on obtaining nourishment, whether through legal channels or by theft or other means. However, when that person’s food needs are met and are no longer the most pressing concern, that person can focus instead on other responsibilities, like work or family. This in turn improves the economic growth in a specific geographic location, enhances education because of the ability for students to focus on school work, and the company who made the initial donation may even see some of its charitable dollars retuned in the form of revenue.

Getting the word out: broadcasting charitable gifts

For all the good coming from corporate giving programs, there is one caution: over-publicizing charitable gifts and activities. While companies gain goodwill and enhance their reputations through philanthropic efforts, touting these too loudly can have the opposite effect and result in public cynicism. Tobacco giant Philip Morris found this out the hard way. After spending $75 million on charitable contributions in 1999, the company then spent another $100 million in advertising to publicize its good deeds. End result: all that expensive talk acted to negate much of the good it had done.

Our advice: involve employees in your corporate philanthropy, from selecting charities to pitching in to help. Don’t be afraid to talk about what you’re doing to spread the word; sometimes people just need to be aware of the need, which may inspire other companies to pitch in or find another organization to donate towards. Just be sure your message is more focused on the charity than tooting your own company’s horn.