Industry Insights: Employee Giving + Volunteering = Happy Employees + Higher Profits

Corporations across America are steadily and surely morphing their workplaces to better accommodate changing employee demographics and attitudes. As millennials and younger baby boomers make up a larger chunk of the workforce, employers find the ground shifting below their feet. Where, earlier, employers held almost all the cards and virtually dictated hiring, firing, compensation, benefits and workplace policies, today’s new worker mindset has shifted the reins from employer to employee… so, now, workplace policies are set to match employee needs and anything deemed less than fair to employees risks being met with harsh criticism and backlash – by employees, the community and activists – using highly effective social media to right wrongs.

This shift in employer attitudes over the past few years is also evident in CECP’s Giving in Numbers Brief 2015 that is based on input from 271 multi-billion-dollar companies with $8.3 trillion in combined sales, including 67 on the Fortune 100 list. The report shows a steady increase in corporate philanthropy over the past few years, to a point of stability in giving rates which reflects organizations increasingly aligning with the do good values of a younger generation of workers. But, make no mistake, while corporations are responding to employee values, they are doing so rather voluntarily… because they now realize that corporate philanthropy contributes significantly to a happy workforce which, in turn, has multiple collateral benefits to the corporation… such as improved employee engagement and corporate reputation, lower recruiting and retention expenses, higher sales and profits, and a proven boost in share price performance.

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Corporate Giving Increased in 2014, Reflects Steady Uptrend

Hard numbers in CECP’s 2015 Brief confirm these changing organizational attitudes, and show that from 2012 to 2014, total giving increased for 56% of the surveyed companies, and international giving ramped up from 56% to 62%.

This giving included volunteering, employee donations and company matches. Corporate cash donations (across all companies surveyed) had a median value of $18.5 million, roughly one-tenth of one percent (0.1%) of company revenue. And the top quartile of donors went even further, with median giving of $49 million which was roughly two-tenths of one percent (0.2%) of revenue.

Most Companies Now Offer Matching Gifts

Nine out of ten surveyed companies offered “matching gifts” and matched employee donations accounted for about 12% of total corporate cash donations, with companies putting their money behind causes that employees wanted to back. Companies also realized that workplace giving was significantly more effective when done year-round (as opposed to a few times a year at staged events), and increased matched giving through year-round policy programs which saw the largest increase and grabbed dollar share from other corporate philanthropy programs.

Companies See Strong Returns from Paid Time Off for Volunteering

Data also shows that when a group of employees support and volunteer for the same causes, they build strong bonds that transfer to the workplace as a sense of camaraderie that promotes workplace cooperation, information exchange and greater job satisfaction. So corporations see value in promoting workplace volunteering, and the CECP Report confirms this, with 60% of surveyed companies offering “paid time off” for employee volunteering. CECP data shows that roughly 1-in-3 employees participated in workplace volunteering programs (and 1-in-2 at companies in the top quartile), with participation rates steadily increasing over the past three years. The three most successful volunteer programs were Company Wide Day, Dollars for Doers and Paid-Release Time.

Donors More Interested in Funding Strategic, Long-Term Development Causes

Data also showed a strong move towards long-term change-oriented causes, corporate competencies and community priorities such as educational programs (which received 29% of all giving), health and social service programs (which received 25%) and community and economic development programs (15%). So, for example, giving was down sharply for one-offs such as disaster relief.

Corporate Giving Directly Linked to Stronger Financial Performance

Finally, companies with the strongest growth in giving for community-related programs also had the strongest financial growth, confirming a clear correlation between corporate philanthropy and financial performance.

So CECP’s 2015 Giving in Numbers Brief conclusively shows that corporations realize the strategic, reputational and financial benefits of employee-oriented giving and volunteering programs, and are moving towards nurturing year-round giving activities because they are far more beneficial than sporadic event-oriented programs and giving is increasingly seen as a core part of what employees expect from the companies they work for.