Companies tie giving abroad to bottom line, local needs

Local needs and corporate financial performance in countries in which they do business are the main factors that drive U.S. companies to make social invests abroad, a new study says.

Eighty-six percent of companies that gave internationally say they plan to increase or maintain the size of their foreign giving budget, says the study, commissioned by Global Impact and prepared by the Lilly Family School of Philanthropy at Indiana University.

In creating their giving programs, the study says, companies typically align their business goals and the “charitable priorities of their stakeholders.”

They also look for nonprofit partners that match their own philanthropic goals in the areas of mission, geographic service area, and focus area.

A “demonstrated record of producing effective and efficient results” is the top attribute companies look for when selecting a nonprofit partner, the study says.

Companies also consider a nonprofit’s accountability, reputation, as well as its size and capacity, the study says.

Resources that companies said they need to expand or strengthen their international philanthropic commitments include assistance with screening potential nonprofit partners, and with developing strategies to engage employees in global partnerships.

The study also found that 20 percent of 27 companies that donated internationally gave only in developing countries; Asia and the Pacific Rim drew the most attention from companies that donated internationally, with a majority giving in the region; and companies with a larger share of their sales revenue coming from overseas made even more international gifts and gave more money internationally at the level of $1 million or more between 2000 and 2010, compared to companies with over 90 percent of sales revenue from the U.S.

The research was based on secondary research on Fortune 100 companies; an online survey of 59 Fortune 500 companies; and in-depth interviewed with four major U.S.-based companies.

Todd Cohen

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