Recurring giving, donor-advised funds and the tracking of giving impact are three current trends in corporate donations and sponsorships.
In this other post, we have provided a high-level overview on ways that companies sponsor or donate to causes.
Table of Contents
1. Recurring Giving
- Recurring giving was selected as one of the top trends in corporate sponsorships/donations based on the fact that a preponderance of industry experts (e.g., Givinga, Classy, CAF America, CyberGrants) are currently highlighting this giving approach as a theme in corporate philanthropy efforts.
- According to Givinga, monthly recurring giving by corporate donors increased by a striking 40% in 2018.
- In parallel, Classy reports that recurring donors are up to five times more valuable than one-time donors and 42% more valuable than a fundraiser for charities.
- This is in part because recurring corporate donors make an additional, one-time gift approximately 75% more often than one-time donors.
- Notably, recurring giving by companies can take a variety of forms according to Givinga and CAF America, including that of monthly donations by corporate parents or donations that are made throughout the year by corporate employees.
- Most recently, corporate recurring donation programs have been enabled by the rise of charitable automation tools, which allow companies and their employees to automatically donate directly from paychecks or other revenue sources.
- Tencent, Google and Dropbox are all examples of companies that are embracing such recurring giving programs and automated tools.
- Additionally, charity:water (The Spring), Watsi (Universal Fund), The Adventure Project (The Collective) and World Help (Child Sponsorship) are examples of non-profits and other charitable organizations that are leaning into this trend by establishing recurring giving programs.
2. Donor-Advised Funds
- Donor-advised funds (DAFs) were identified as another trend in corporate philanthropy based on both the quantitative evidence of recent DAF growth as well as the fact that multiple industry experts (e.g., Givinga, Classy) are currently reporting the rise in popularity for this form of corporate giving.
- DAFs are a form of brokerage account that allow donors to enjoy an immediate tax benefit when they contribute funds, irrespective of when the funding is actually donated or distributed to a specific cause.
- Giving reports that there are now over 450,000 DAFs, with total assets in excess of $110 billion and annual new grants of over $20 billion per year.
- This is up from $85 billion in assets in 2018 and only $29 billion in assets several years prior, according to Classy.
- Givinga suggests that the opportunity for immediate tax deductions along with the administrative savings of working through an external third-party are major reasons for the rise in corporate giving through DAFs.
- Moreover, as with recurring giving, Classy reports that the rise of DAF-related workplace giving software is increasingly enabling corporations and their employees to quickly and easily make donations through this mechanism.
- Meanwhile, American Express, Dow and CarMax all examples of major companies that have embraced DAFs.
- In parallel, Fidelity Investments (Fidelity Charitable), Goldman Sachs (Goldman Sachs Charitable Gift Fund), Schwab (Schwab Charitable) and Vanguard (Vanguard Charitable) are examples of companies that are leaning into this trend by creating DAF services.
3. Tracking Giving Impact
- Lastly, the fact that corporations are increasingly tracking the impact of their philanthropic efforts was chosen as a key trend based on the insights of industry experts (e.g., Givinga, Good Returns, The Center for Effective Philanthropy), who consistently report that corporations are increasingly calculating the return on investment (ROI) of their sponsorships and donations.
- According to Givinga, corporations previously viewed philanthropy as a “necessary cost” that provided “few measurable results.”
- However, at present, Givinga reports that approximately 87% of companies are actively measuring the results of their donations and sponsorship campaigns.
- This trend in corporate philanthropy is somewhat driven by the increasing focus on corporate social responsibility, given that 81% of customers will make “personal sacrifices” to buy from responsible companies.
- Additionally, the availability of tracking software is making it easier for corporations to capture and monitor analytics related to their giving campaigns.
- Meanwhile, Salesforce and the company’s Philanthropy Cloud tracking product is an example of a company that is illustrating this trend.