2018’s Biggest Threats to Your Corporate Philanthropy Initiatives

Jan 25, 2018 - Jeff Summers

The demand for corporate social responsibility has never been higher. The impact CSR can make on your consumer brand and employer brand is tremendous. Take a look at some of the latest research proving the impact of CSR.

CSR Impact on Your Consumer Brand

  • 87% of Americans say they’ll purchase products from a company that advocates for an issue they care about. (Cone, 2017)
  • 76% of Americans say they will refuse to purchase a product if they found out a company supported an issue contrary to their beliefs. (Cone, 2017)
  • 92% of Americans state they have a more positive image of the company if it supports a social or environmental concern. (Cone, 2017)

CSR Impact on Employer Brand

  • 75% of Millennials they would take a pay cut to work for a responsible company (vs. 55 percent U.S. average). (Sustainable Brands, 2017)
  • 88% of Millennials say their job is more fulfilling when they are provided opportunities to make a positive impact on social and environmental issues (vs. 74 percent U.S. average). (Sustainable Brands, 2017)
  • 76% of Millennials consider a company’s social and environmental commitments when deciding where to work (vs. 58 percent U.S. average). (Sustainable Brands, 2017)

The benefits to being a socially responsible company continue to grow, but as they do, so do the threats to CSR. We’ve outlined the biggest threats to CSR impact in 2018, as well as what companies can do to stay ahead of them.

2018’s Biggest Threats to Your Corporate Philanthropy Initiatives from CyberGrants on Vimeo.

Threat to CSR #1 - Changing Tax Laws

Changes to this year’s tax codes are projected to have a negative effect on corporate giving this 2018. The new tax code increases the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for couples. The tax code also lowers individual tax rates which benefits individual taxpayers starting this year. In fact, you may have noticed your paycheck is a bit larger thanks to the reduced rates. While the individual tax rates aren’t set to stay this low forever, they do put more money back into taxpayer’s pockets. This could positively affect giving since we’re getting a bit of a break. However some experts believe the value of the charitable tax deduction is likely to go down. Here’s why:

  • The standard deduction is increasing = meaning fewer people will itemize their taxes.
  • Fewer itemizers means less people using the charitable tax deduction
  • Less people benefiting from the deduction means less donations to charity.

Did You Know? The Tax Policy Center estimates charitable giving will be reduced anywhere from $12.3 billion to $19.7 billion in 2018, a 4 to 6.5% decline in giving.

What is the impact of #CSR on your consumer and employer brand? Take a look:Tweet This!

So what will it be? Will giving go up or down?

Well, it could go either way! More money back up front might balance out the deduction changes and giving could potentially increase. In addition, the corporate tax rates have been slashed by 14%, giving employers more money to boost their corporate giving programs (think more matching gifts, or increased incentives to participate).

David Callahan, Founder of Inside Philanthropy explains:

“It’s been estimated that the new tax law will reduce charitable giving by as much as $20 billion a year. But in 2018 at least, my hunch is that net giving holds steady or even rises as the wealthy—buoyed by record stock market gains—continue to ramp up their philanthropy.” - David Callahan

Others say...

“Charities around the U.S. are saying that doubling the standard deduction essentially takes away incentives for middle-class families to donate to charities, and that could hurt the work these charities do in communities.” - (NPR, 2017)

Whatever the case may be, corporations can help:

With your 14% reduction in taxes, invest the money back into your employees’ salaries, invest more money into your corporate philanthropy programs (matching gifts, volunteering paid time off, etc) and reward employees monetarily for their participation. Using a portion of your tax benefits to stimulate your corporate philanthropy programs is a must to tackle the decline in charitable giving we could see from private donors because of changes to the standard deduction rate.

Threat to CSR #2 - Cybersecurity

61% of Fortune 500 CEOs say CyberSecurity is a top challenge their company faces, according to a Fortune survey. And as more cybercriminals launch more malware every day (230,000 new malware per day according to latest research), more and more resources are being deployed to protect against cyber attacks. Cyber attacks sure made their appearance in 2017, with one of the most notable being in Equifax:

“September 7, 2017: Equifax, one of the three largest credit agencies in the U.S., suffered a breach that may affect 143 million consumers. Due to the sensitivity of data stolen—including Social Security numbers and driver’s license numbers—this is being called one of the worst breaches ever. Hackers were able to gain access to the company’s system from mid-May to July by exploiting a weak point in website software; the breach was discovered by Equifax on July 29th, 2017 and at that time, they sought assistance from an outside forensics firm. Other compromised data is said to include full names, addresses, dates of birth, credit card numbers, and other personal information.” (IdentityForce.com, 2017)

The estimated annual cost for cyber crime committed globally is up to 100 billion dollars, according to according to Cybintsolutions. Surprisingly, the role that insiders play in cyber attacks is growing. IBM found that 60% of all attacks were an inside job. The top three industries under attack are:

  • Health Care
  • Manufacturing
  • Financial Services

How Corporations Can Help: According to Harvard Business Review, businesses are expected to invest more than $93 billion in cyber defenses by 2018. Implement a secure system to handle all of your corporate giving transactions. CyberGrants Disbursements System completely protects your company by transferring liability to a 3rd party.

Threat to CSR #3 - Fraud

According to the 2017 Association for Financial Professionals (AFP) Payments Fraud and Control Survey:

  • 74% of finance professionals report that their organizations were targets of payments fraud in 2016; checks continue to be the payment method most exposed to fraudulent activity.
  • Nearly half of all survey respondents reported that incidents of fraud attempts increased in 2016.

In addition:

  • According to FBI estimates, losses from check fraud total $18.7 billion annually.
  • The average fraud scheme lasts 18 months before it is detected. (Relyco, 2015)

How Corporations Can Help: Invest in a system that proactively protects your company, employees and nonprofits from fraud. CyberGrants Disbursements System takes responsibility for vetting all organizations to protect against fraud and immediately transfer funds to negate escheatment concerns.

How CyberGrants Supports Your Mission Against CSR Threats:

At CyberGrants our mission is to provide innovative software and services in the most secure and efficient way. How do we do this? By constantly evaluating technologies, regulations, processes and partnerships.

Continued changes in regulations related to disbursements have driven an evolution of the distribution alternatives offered to our clients. These regulations have increased the markets focus on issues of risk and liability.

Do you want to:

  • Increase efficiency in administration of gifts?
  • Aggregate payments for simpler management?
  • Simplify your tax receipt process?
  • Find a partner focused on changing risks?
  • Secure money transfer practices?

Our banking partners are increasingly focused on managing the changing risks associated with financial crimes and we are all determined to strengthen our Anti-Money Laundering (AML), Economic Sanctions and Customer Due Diligence (CDD) program requirements. Plus any enhanced measures are intended to comply with evolving Know Your Customers guidelines and new regulations issued by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and ensure sound money transfer practices.

To meet these challenges, CyberGrants is now offering three banking and disbursement options that provide great benefit to donors, nonprofit organizations, and our corporate clients alike. To explore these options more download our brochure.

Speak with an expert at CyberGrants to see how our secure platform can keep your corporate philanthropy initiatives protected this year.

Additional Research on CSR’s Impact:

CSR Impact on Your Consumer Brand

  • Four out of five (79%) U.S. citizens expect businesses to continue improving their CSR efforts. (Cone, 2017)
  • 71% of Millennials are hopeful businesses will take the lead to drive social and environmental change moving forward. (Cone, 2017)
  • 70% of Americans believe companies have an obligation to take actions to improve issues that may not be relevant to everyday business operations. (Cone, 2017)
  • 87% of Americans say they’ll purchase products from a company that advocates for an issue they care about. (Cone, 2017)
  • 76% of Americans say they will refuse to purchase a product if they found out a company supported an issue contrary to their beliefs. (Cone, 2017)
  • 92% of Americans state they have a more positive image of the company if it supports a social or environmental concern. (Cone, 2017)
  • 87% of Americans state they are more likely to trust a company if it supports a social or environmental concern. (Cone, 2017)
  • 88% of Americans state they are more loyal to a company if it supports a social or environmental concern. (Cone, 2017)
  • 89% of Americans state they’ll switch brands to one that is associated with a good cause (given it’s similar price and quality) compared to 66% in 1993. (Cone, 2017)

CSR Impact on Employer Brand

  • 94% of American consumers consider whether a company is a good employer or not to be a factor in determining the company’s responsible business practices, making this the number one reason. (Cone, 2017)
  • 75% of Millennials they would take a pay cut to work for a responsible company (vs. 55 percent U.S. average). (Sustainable Brands, 2017)
  • 83% of Millennials would be more loyal to a company that helps them contribute to social and environmental issues (vs. 70 percent U.S. average). (Sustainable Brands, 2017)
  • 88% of Millennials say their job is more fulfilling when they are provided opportunities to make a positive impact on social and environmental issues (vs. 74 percent U.S. average). (Sustainable Brands, 2017)
  • 76% of Millennials consider a company’s social and environmental commitments when deciding where to work (vs. 58 percent U.S. average). (Sustainable Brands, 2017)
64% of Millennials won’t take a job from a company that doesn’t have strong CSR practices (vs. 51 percent U.S. average). (Sustainable Brands, 2017)

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