EVALUATING AN INVESTMENT

Ways That Companies Sponsor or Donate to Causes

Several common ways that companies sponsor or donate to causes are matching gifts, volunteer grants, employee grant stipends, community grants, volunteer support initiatives and corporate sponsorships.

In this other post, we have provided a high-level overview on current trends in corporate donations and sponsorships.

1. Matching Grants

  • According to Potomac Recruiting, Re: Charity, Givinga and Double the Donation, the most common way in which corporations sponsor or donate to causes is through matching grants.
  • For example, Potomatc Recruiting reports that approximately 65% of Fortune 500 companies have matching gift programs.
  • In this form of philanthropy, companies commit to match the donations that are given by eligible employees to eligible charities and non-profits, in either a 1:1, 2:1 or even 3:1 ratio.
  • Ultimately, this form of giving enables both the corporate parent as well as its employees to “maximized the impact” of every donation.
  • Notably, ExxonMobile has one of the more aggressive matching grants for employees, with the company donating up to $3 for every $1 given by employees, for a maximum of $22,500 in matching grants per employee per year.

2. Volunteer Grants

  • Industry experts (e.g., Potomac Recruiting, Re: Charity, Double the Donation) note that matching grants are closely followed by volunteer grants in terms of popularity, with Potomac Recruiting asserting that volunteer grants are the second-most popular form of corporate giving.
  • Similar to matching grants, volunteer grants are based on the employee contribution.
  • In this case, companies offer to donate a specific monetary amount to an eligible cause after eligible employees complete a number of volunteer hours.
  • Double the Donation adds that volunteer grant programs are typically structured with thresholds rather than an exact hour-to-donation ratio (e.g., an employee must volunteer for a minimum, predetermined number of hours).
  • One notable example of this is Microsoft and the company’s volunteer grant program, which donates over 3 million hours to volunteer work each year.
  • In this case, Microsoft donates $25 to the charity of an employee’s choice for every hour that he/she volunteers.

3. Employee Grant Stipends

  • Potomac Recruiting, Re: Charity and Double the Donation highlight employee grant stipends as another common way in which companies make donations or sponsor causes.
  • Specifically, Double the Donation describes this form of giving as one where corporations will award grants to employees, who are then allowed to donate those grants to the nonprofit of their choice.
  • Potomac Recruiting adds that while some corporations give their employees a list of causes to choose from, others have employees submit applications for these grants and approve them on a case by case basis.
  • Specifically for BP, the company’s Fabric of America Fund gives employees $300 each to donate to the non-profit of their choosing.

4. Community Grants

  • According to industry experts (e.g., Potomac Recruiting, Re: Charity, Givinga, Double the Donation), community grants are a form of corporate philanthropy that are very common within large corporations.
  • In contrast to matching gifts, volunteer grants and employee grant stipends, Potomac Recruiting notes that community grants are completely initiated by the corporate parent, and involve the company setting aside funding for community needs.
  • Thereafter, non-profits and other community organizations (which are often located in the same geographic area as the company) apply for this source of funding and explain how their mission would benefit from the donation.
  • One notable example of this type of corporate philanthropy is State Street, which has donated over $20 million in grants to more than 40 communities globally.

5. Volunteer Support Initiatives

  • In some cases, corporate philanthropy takes the non-monetary form of organized employee volunteering, per Potomac Recruiting, Givinga and Double the Donation
  • While smaller companies may have workforces that are “stretched too thin” for this form of sponsorship, organizations ranging from small businesses to Fortune 500 companies actively participate in this form of giving.
  • In particular, some companies and their employees volunteer to support areas where they have specific expertise, such as a cybersecurity company offering free support to ensure the safe storage of patient data at a community center.
  • Kraft Heinz is an example of a company that combines such non-cash volunteering activities with marketing campaigns and financial contributions, such as within the company’s partnership with Huddle to Fight Hunger.

6. Corporate Sponsorships

  • Finally, Re: Charity and Double the Donation also note the popularity of corporate sponsorships as a form of donating to causes and charities.
  • According to Investopedia, corporate sponsorships is a form of both marketing and charitable contribution, wherein a company commits to making a donation to a project or program in exchange for the “right to be associated” with it.
  • As such, companies and their causes mutually benefit from the arrangement, in the form of positive marketing and financial support.
  • A key example of corporate sponsorship is Papa John’s partnership with the historically black university Bennett College.
  • Specifically, Papa John’s provided the school with $500,000 in 2019 alongside other corporate resources, and received significant positive press for contributing to HBCU.
About author

Articles

Glenn is the Lead Operations Research Analyst at Research for Finance with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.
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