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Defining Corporate Philanthropy

August 31, 2010

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For more definitions and other helpful resources, see our website here.

Continuing the series on definitions…

Corporate Philanthropy:

Definition: Corporate Philanthropy mirrors individual philanthropy except for the fact that a corporation, not an individual, is donating funds, time, or talent. Although done on a larger scale, corporate philanthropy is still done without any expectation of direct corporate gain (such as increases in revenue), but usually involves indirect gains (such as enhancing a company’s brand, engaging employees, recognition, etc.).

Attributes:

  • Like standard philanthropy, corporate philanthropy focuses on the treating the cause of a problem or issue instead of the symptom.
  • Unlike standard philanthropy, corporate philanthropy must be done through a corporation directly or a corporation’s own non-profit entity.
  • Funding for corporate philanthropy mainly comes from the company’s contributions and are usually treated as a business expense.
    • Funding can also consist of individual donations if, for example, someone wanted to donate to a corporation’s non-profit.
    • Companies are allowed to deduct up to ten percent of pre-tax income for direct charitable contributions (this includes giving to the company’s foundation). Most companies deduct closer to one percent.1
  • Some of the common forms of corporate philanthropy are:
    • Cash donations: including grants, donations, sponsorships – whenever money exchanges hands.
    • In-kind donations: such as donating products, access to employee volunteer groups, the use of a company’s facilities, property, or services as examples – whenever non-monetary support is given.

Examples: Many large companies have a philanthropy branch, this is just two of the more well known examples:

  • Boeing: Boeing’s philanthropy does not go through its own individual non-profit, but it is very much a part of their CSR mission.
    • Boeing defines its CSR mission around the three principles of Sharing Our Expertise, Partnering With Others, and Impacting Key Issues. They execute these goals through a variety of grants and long-term partnerships.
    • For example, Boeing supports environmental conservation through its partnership with Botanic Gardens Conservation International to help preserve plant life around the globe. Additionally, Boeing supports educational initiatives with business partner Alenia Aeronautica that teaches children in Italy about environmental awareness (simultaneously treating a symptom and a cause).

1http://www.sponsorship.com/resources/ieg-s-guide-to-corporate-nonprofit-relationships.aspx

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