Key Considerations for Corporate Philanthropy: Five Questions to Ask

Corporate philanthropy is a complex endeavor that requires careful consideration. Many companies use philanthropic donations as a means of giving back to communities, contributing to causes like disaster relief, education, and healthcare. In 2022, U.S. companies collectively donated $29.48 billion, encompassing both monetary contributions and in-kind donations, according to the Giving USA Foundation and the Indiana University Lilly Family School of Philanthropy.

Corporate philanthropy has evolved from being a CEO's passion project or a PR strategy to an integral part of broader business goals. However, companies often grapple with questions about where to allocate their resources, what form their philanthropic efforts should take, and how to measure their impact. Here are five crucial questions that companies should consider as they develop their philanthropic policies.

How Should Contributions Be Made?Sometimes, the most effective way for companies to demonstrate support is by writing checks to organizations and allowing them to manage the funds. This approach is particularly suitable for building local goodwill and supporting disaster relief efforts.


How to Choose Philanthropic Efforts?Decisions about where to allocate resources often depend on geographical locations, employee presence, and customer base. Aligning philanthropic efforts with a company's expertise and capabilities can also be more impactful than simple monetary contributions.


What Role Should Employees Play?Employee engagement in philanthropic efforts can be facilitated through matching gift programs and volunteer hours. These programs empower employees to participate in charitable endeavors, but eligibility criteria and vetting processes may be necessary.


How Do You Measure Success?Defining success is crucial, and it should be established from the outset. Success can be measured by predetermined objectives or outcomes, and sometimes, third-party evaluators may be needed to assess progress.


Should Philanthropy Be Linked to Marketing?While companies may want to promote their philanthropic initiatives, it's important not to solely engage in philanthropy for marketing purposes. Instead, the focus should be on achieving tangible results and making a genuine impact. Cause-related marketing can be an effective way to increase visibility and drive donations, benefiting both the company and the nonprofit organizations involved.

In summary, corporate philanthropy involves making thoughtful choices about how and where to allocate resources, engaging employees, measuring success, and being mindful of the balance between philanthropy and marketing. By addressing these key questions, companies can create impactful and meaningful philanthropic strategies.