Corporate Giving in Ireland: An Overview of the Landscape

Transcription

1 Corporate Giving in Ireland: An Overview of the Landscape

2 The Brief To Investigate the Landscape of Corporate Giving in Ireland and to Gain an Understanding of Attitudes Towards Philanthropy with a View to Providing Philanthropy Ireland with Insights to Encourage more Businesses to become Involved in the 1% Difference Campaign. Prepared for: Philanthropy Ireland Presented by: Caoimhe Ní Mhuilleoir Niall Murphy David Murray and Aisling O Dwyer (Marketing Advisors) Orlagh McGrath (Programme Director) Elaine Malcolm (Research Consultant) of UCD Marketing Development Programme.

3 CONTENTS 1. Introduction Background Research Objectives Methodology General Understanding of Corporate Philanthropy Overview of Corporate Philanthropy Today Attitudes towards and Reasons for Engaging in Corporate Philanthropy Benefits and Challenges of Engagement in Corporate Philanthropy Awareness of Philanthropy Ireland and the 1% Difference Campaign Key Takeaways for Philanthropy Ireland...14

4 Introduction Philanthropy is not a word that crops up too often in everyday conversation, but it is a concept that has already had a major impact on Irish Society and has the potential to have an even greater impact in the years to come. Philanthropy is a particular kind of charitable giving which is focused on solving the root causes of problems and making a sustainable improvement, as distinct from contributing to immediate relief. Philanthropy is not the exclusive preserve of very wealthy people, anyone can be a philanthropist - it is the intent not the amount that makes a philanthropist. John D. Rockefeller once said that we should think of giving not only as a duty, but as a privilege, and it is a privilege to be in a position to help a great cause to achieve its goals and make a tangible, positive difference to people s lives. Business can bring not only cash, but expertise, insight, and contacts to assist organisations who are seeking to make a real difference in their communities. It is clear from the research conducted by the Marketing Development Programme, UCD Michael Smurfit Graduate Business School, that many Irish companies, even in these challenging times, are doing just that to support good causes and in doing so are making a positive difference both to the community and to their own business. This research offers some fascinating insights into the motivation for business giving and the benefits to business in terms of building a strong company culture, improving staff morale and building a positive reputation with key stakeholders. Much business giving in Ireland is still driven by pure emotion, that in itself is not a bad thing but it might be that business giving would have a longer term impact if companies treated giving as an investment decision and measured its impact not only for the company but for the cause. However, that said, it is heartening to see so many companies actively engaged in supporting good causes throughout Ireland and contributing to making a difference. In the meantime I think we should celebrate the generosity of so many businesses and their employees, and their contribution to making Ireland a better place. Sincerely Seamus Mulconry Executive Director Philanthropy Ireland 4

5 Background Established in 1998, Philanthropy Ireland represents philanthropic organisations and interests that are engaged in philanthropic activity, corporate giving and development in Ireland. In 2013, Philanthropy Ireland spearheaded the 1% Difference campaign that proved to be successful in developing an association between effective giving and its brand. Currently, Philanthropy Ireland is focused on engaging corporate donors in an effort to create and encourage sustainable, strategic, long-term contributors to good causes Currently there is no succinct overview of the Irish corporate philanthropic landscape. Philanthropy Ireland approached the UCD Marketing Development Programme (here after known as the MDP) to gain a better understanding of this landscape. Philanthropy Ireland also sought an insight into the general trends and models that companies employ within the area of corporate giving in Ireland. 5

6 Research Objectives: Primary Objective To investigate the landscape of corporate giving in Ireland and to gain an understanding of attitudes towards philanthropy with a view to providing Philanthropy Ireland with insights to encourage more businesses to become involved in the 1% Difference Campaign. Secondary Objectives Determine the attitudes and behaviours of companies towards corporate philanthropy. Investigate the models of corporate giving that businesses are engaged in. Establish the impact of corporate philanthropy on the company both internally and externally. Establish the awareness of the 1% Difference campaign and Philanthropy Ireland. Methodology: One hundred and fifty-two companies were interviewed. The companies and their contact details were sourced through Kompass list brokers. Interviews were conducted with those who were the key decision-makers for philanthropy within the company. Interviews were carried out by telephone. -2O the companies surveyed 83% were based in Ireland and 16% had their head office overseas, in the UK, USA, France and Germany. The breakdown of the industry was as follows; 96 SMEs, 27 large Domestic Companies, and 29 Multinationals. Industries were defined by employee size. Company Breakdown by Employee Size SME 1-10 Large Domestic Company Multinational 50+ Companies were interviewed between 9 th June and 4 th July 2014 Interviews were conducted in a range of sectors, with Retail being the largest with 15%. Range of Industries Interviewed Retail 15% Food 9% Services 7% Construction 7% Agriculture 7% Financial 7% Pharma 5% Tech 5% Advertising 4% Transport 4% 6

7 Sector Breakdown Retail 15% Food 9% Services 7% Construction 7% Agriculture 7% Financial 7% Pharma 5% Technology 5% Advertising 4% Transport 4% General Understanding of Corporate Philanthropy The general understanding of the term Corporate Philanthropy was examined. Companies were asked to define it in their own words, and explain what it means to the company they work for. Eighteen percent of companies said that they did not understand the meaning of Corporate Philanthropy. After further explanation, these companies clarified that they were actually engaged in some form of corporate philanthropy. The companies who returned definitions for Corporate Philanthropy displayed a range of understanding of the term, from low understanding to clear knowledge of the phrase. Understanding of Corporate Philanthropy is Varied 22% 22% 18% 13% 11% 11% 11% we just feel that companies have responsibility if they are doing well to help worthy causes in need of funding and the less off in society - SME (Food) 6% 2% 2% 2% This demonstrates that there is still a need to educate companies on what the term philanthropy means. The two words most associated with philanthropy were giving and charity. Philanthropy Ireland wishes to avoid an association with the term CSR. It is therefore a positive indication that the association companies have between Corporate Philanthropy and CSR is low at 6%. -3 7

8 Overview of Corporate Philanthropy Today High Engagement Levels Across a Variety of Causes Of the companies interviewed there are high levels of corporate giving in Ireland, with an average of 80% of companies engaging in philanthropy. Engagement in Philanthropy is Widespread Amongst Companies in Ireland 80% 94% 88% 70% Average Multinationals Large Domestic Companies SMEs Multinationals are highest at 94% followed.by Large Domestic Companies at 88% and SMEs at 70% Of the companies surveyed, 20% did not engage in corporate giving citing a lack of funds. Of the international companies, 100% have some form of giving programme compared to 75% of Irish companies. Many companies supported more than one cause. The causes supported vary but the top areas of focus are Health (38%), Poverty (34%), Young People (34%) and Children (33%) Drivers for Engagement are Health, Poverty, Young People and Children 38% 34% 34% 33% 40% Sport 22% 18% 12% 12% 11% Music 4% Changes from Year to Year Length of Engagement The average length of engagement was high, with 80% of companies saying they engaged in corporate philanthropy for over 8 years. SMEs were below the average at 62%. This is explained by the nature of SMEs often starting up and closing and not reaching the eight year mark. Large Domestic Companies and Multinationals were both above average at 94% and 84% respectively. 8

9 Strategic Planning In terms of strategic corporate philanthropy, there was little evidence that consistent and/or strategic timing structures are in place for the delivery of a planned programme of corporate giving. On average 55% of companies said they had no specific time frames in place for supporting a certain cause. The most common time frames were between six months and two years, Multinationals at 31%, Large Domestic Companies at 41% and SMEs at 32%. This presents an opportunity for Philanthropy Ireland to educate companies on the benefits of putting strategic planning structures in place for corporate giving. Forms of Engagement Donation of profit is the most common form of corporate philanthropy with an average of 62% of companies giving in this way. SMEs (75%) are most likey to donate profit as this provides them with the most hassle free form of philanthropy. Large Domestic Companies (59%) and Multinationals (53%) are lower than average as it was found that they value the benefits of other forms of corporate giving such as donation of product, services or volunterering of employee time. Main Form of Engagement is Donation of Profit SMEs 75% Large Domestic 59% Multinationals 53% Average 62% There is an opportunity for Philanthropy Ireland to educate SMEs on cost efficient, easily applied and easy to manage options for engaging in Philanthropy. For example, this could involve informing SMEs of the benefits to the company of allowing employee volunteer time. Attitudes Towards & Reasons for Commencing Corporate Philanthropy: Giving Back Factor Companies in Ireland commence engagement in philanthropy for a range of reasons. The desire to give something back is an obligation felt by many companies in all sectors across the country. The following quote from an SME in the financial sector is indicative of the obligation felt by companies; We rely on the community for support, so we re giving something back. 9

10 Giving Back is the Main Reason for Commencement We rely on the community for support, so we re giving something back - SME (Financial) To provide financial support to non-profit organisations that enhance the health, well being and education of the individuals and families in the communities that we serve - Multi National (Health) Important to give to local - Large Domestic (Construction) The strong resonance that the phrase Giving Back has, provides Philanthropy Ireland with an opportunity to use this as a strong call to action in future campaigns. The main drivers of engagement are the areas of health, poverty, children and young people. Philanthropy Ireland can further increase engagement by promoting companies to get involved in areas to which they feel a particular alignment or closeness. Process of Selection The position of the person in charge of selecting the nature of the philanthropic activity ranges across business categories. On average across the business categories the most common selector is the CEO at 49% of companies. 48% CEO and Employees Play Major Roles in Selecting Causes 32% Multinationals 53% chosen by Employees 11% 11% 9% Large Domestic 44% chosen by CEO 5% 4% 3% 2% SMEs 62% chosen by CEO In SMEs the CEO is most commonly responsible for selecting the causes to support, with 62% of companies using this model of selection, compared to 44% of Large Domestic Companies and 16% of Multinationals. Typically CEOs of SMEs have a strong personal connection to the cause that the company chooses and this usually has a significant effect on the decision process. Employees are also a driving force behind the choices companies make in relation to corporate giving. A core benefit of corporate philanthropy for multinationals is empowering their employees by giving them the responsibility for selecting the cause that the company will ultimately support. This creates buy in from the employees and it was found that 53% of companies use this method of selection. 10

11 Employees are Driving Force for Corporate Giving 15% No One 15% Specific Dept 37% Employees Who Volunteerer Multinationals 47% Large Domestic 44% SMEs 28% Company Wide 33% After CEOs, employees of SMEs have the most influence when choosing the causes to support, with 30% of employees engaging in the selection process. Employee engagement is not as high in Large Domestic Companies (22%). The research found that the CEOs of these companies still hold significant influence over the selection process. Relationship with Business Objectives A high proportion of companies (42%) aim to align their philanthropic activity with the company s overall business goals and objectives. The importance of tying in philanthropic activity with business objectives varies across business categories. Large Domestic Companies (67%) are most likely to strive to make this link between their philanthropic activity and their overall business objectives. Multinationals and SMEs are less likely to seek this link, with 37% and 23% respectively, looking to achieve this relationship. This presents an opportunity for Philanthropy Ireland to educate these companies on the benefits of aligning corporate philanthropy with their business objectives. Metrics Over half of the companies measure the success of their philanthropy (53%) and each use different methods to do this. The most popular measurement of success for companies is the feedback that they receive from the cause supported (36%). Other commonly used methods of measurement are Employee Morale (18%), Money Raised (17%), and PR Gained (15%). Significant Number of Companies Measure their Activity in a Variety of Ways 47% 36% 18% 17% 15% 12% 11

12 There is an opportunity for Philanthropy Ireland to attract companies who are seeking to measure their philanthropic activity by providing a metrics system within the 1% Difference Campaign. This would allow companies to benchmark the success of their philanthropic engagement and improve upon future activity. Negative Attitude from non-engagers A small number of companies that do not engage in philanthropy (6%) described a common feeling that philanthropy is merely a PR stunt by companies. The opinion was that philanthropy would be something that would be done privately if it were to be done at all. One of the company s opinions was expressed as Charity by companies is just a PR stunt if they are doing it in the public eye. This attitude from companies could be changed by educating business leaders on the need and rationale for openness and transparency around their giving in order to create models of leadership and greater understanding of the value of corporate philanthropy. Benefits and Challenges of Engagement in Corporate Philanthropy: Companies that are involved in philanthropy obtain a number of perceived benefits from their activity with the most common being improvements to company culture, employee morale and PR generated. Company culture is perceived as being the biggest benefit across the board. Positive PR is also very much appreciated by companies, although it is not something that they necessarily actively look for. The values that Multinationals, Large Domestic Companies and SME s place on the individual benefits of engagement varies across business categories. This variance is shown in the table below. Benefits of Philanthropic Activities to Companies Company Culture Employee Morale PR Generated Average 66% 60% 47% Multinational 95% 95% 47% Large Domestic 61% 44% 61% SME 42% 42% 32% Q.16 Which of the following examples stands out to you as a benefit to your organisation in taking part in philanthropy? PR The PR generated as a result of philanthropic activity is appreciated by companies but not necessarily sought after. Significantly, 15% of companies actually use PR to measure the success of the corporate giving programmes. The benefits of this are acknowledged by companies, with 48% feeling that it had a positive effect on the consumer perception of the company. Philanthropy Ireland should acknowledge PR as a driver and a benefit of philanthropy and develop the 1% Difference Campaign to increase the publicity that companies receive for their philanthropic efforts. 12

13 Challenges of Engagement The main challenges that companies face when engaging with corporate philanthropy are funding and time constraints. Funding is the biggest issue faced by companies, with 39% citing it as a challenge. Availability of Funding is a Challenge for Companies, Particularly SMEs Multinational 21% 21% 37% Large Domestic 22% 22% 28% None Time Funding SMEs 15% 34% 43% Funding constraint is of particular significance for SMEs at 44%. Time constraints are the next challenge for companies at 17%. There is an opportunity here for Philanthropy Ireland to educate companies experiencing these challenges on the many efficient forms of corporate giving. Awareness of Philanthropy Ireland and the 1% Difference Campaign: Overall there are significant awareness levels of both Philanthropy Ireland and the 1% Difference Campaign. In particular, two-thirds of multinational companies had heard of the 1% Difference Campaign. This poses a great opportunity for Philanthropy Ireland to convert these awareness levels into engagement. Awareness of 1% Difference Campaign and Philanthropy Ireland Philanthropy Ireland 1% Difference Campaign Average 36% 44% Multinationals 42% 65% Large Domestics 31% 33% SMEs 35% 34% Q.24 Have you heard of the 1% Difference Campaign? Q.28 Have you heard of Philanthropy Ireland? Connecting Philanthropy Ireland and the 1% Difference Campaign When asked whether they knew that the 1% Difference Campaign was a Philanthropy Ireland led initiative only 11% of companies had made the connection. This is quite low considering the significant levels of awareness both Philanthropy Ireland and the 1% Difference Campaign enjoy individually. 13

14 There is an opportunity for Philanthropy Ireland to leverage the high awareness levels of both brands in order to ensure that companies make the connection between Philanthropy Ireland and the 1% Difference Campaign. Philanthropy Ireland should be aware of a risk of confusion which might dilute the effectiveness of the 1% Difference Campaign s call to action. Key Takeaways for Philanthropy Ireland 1. Engagement in philanthropy is widespread throughout all industries, company sizes and sectors. On average, 80% of companies are already engaged in some form of philanthropy. This shows that the market place is receptive to a campaign such as the 1% Difference Campaign. 2. Employees play a critical role as one of the main driving forces behind philanthropic activity within the majority of companies. Employees are a big part in the selection process of the cause or organisation that the company ultimately supports, this is particularly clear in multinational companies. It is important to acknowledge this key role that employees play. Philanthropy Ireland should take this opportunity to target these employees in an effort to persuade company management to become more involved in corporate philanthropy and the 1% Difference Campaign. 3. There is a high level of awareness of the 1% Difference Campaign across the board, especially considering this campaign has been running for one year. In particular there are high levels of awareness of the 1% Difference Campaign amongst multinational companies. As has been mentioned before there is a great opportunity for Philanthropy Ireland to target these companies and turn this low hanging fruit of awareness into engagement. 4. Currently there are no consistent strategic planning initiatives, particularly in terms of time frames in place for sustainable giving. There is an opportunity for Philanthropy Ireland to inform companies about the different ways that they can give. This is of particular importance for SMEs, to show that there are less expensive, hassle free ways of being involved in corporate giving. As well as this, Philanthropy Ireland should educate companies on the benefits of long term corporate giving. 14

15 Next Steps for the 1% Difference Campaign Philanthropy Ireland should launch a two-pronged marketing campaign aimed at the decision-makers and drivers of corporate philanthropy within companies, the management and general employees of companies, in an effort to encourage curiosity. The high awareness levels of the 1% Difference Campaign among multinationals provides a particular opportunity. Philanthropy Ireland should look to convert this awareness into engagement. Philanthropy Ireland should celebrate the success of companies currently involved in the 1% Difference Campaign and use these as case studies to convince other companies to take part. 15

16 Contact Details: Address: 85 Merrion Square South, Dublin 2 Tel: +353 (0) Fax: +353 (0) Info@Philanthropy.Ie CHY CRO