Corporate philanthropy takes many forms. There are matching gift programs, generous grants and scholarships, paid time off for employees who choose to pursue volunteer opportunities, and more. In recent years, however, a new trend has emerged alongside these strategies: the rise of corporate foundations. These foundations enable corporations to dedicate a committed, expert staff of professional philanthropic administrators in support of worthy causes that often run parallel to their own corporate goals and accomplishments.
Although legally separate from for-profit companies, corporate foundations typically draw their primary income from a corporate parent organization, and as a result, their philanthropic focus usually aligns with the values and aims of that corporation. According to recent research, 73% of corporate foundations reported that the causes they champion and their giving strategies relate to the business focus of their parent organization. For example, the Wells Fargo Foundation’s goals include support for sustainable homeownership, affordable housing, and financial education, all of which align with the banking services offered by its parent organization.
These ties to companies also make corporate foundations highly effective donors. Since they benefit from the industry expertise and insider knowledge of their parent companies, corporate foundations can send money and attention to the communities and causes where they will be most needed or where they will do the most good.
Additionally, corporate foundations are also prolific donors: In 2014—the last year for which data is available—the nonprofit Foundation Center reported the country’s more than 2,500 corporate foundations had given as much as $5.1 billion.
Despite such astronomical contributions, however, the primary beneficiary of giving by corporate foundations may be society itself. According to Corporate Citizenship, 74% of foundations want to measure the long-term impact on society while at least 54% already do so; nearly two-thirds of corporate foundations envision “developing a new product or service that delivers a social benefit to society.” Corporate foundations see themselves as more than glorified checkbooks for businesses and instead want to apply their considerable resources and expertise to address the underlying root of social problems rather than simply throwing money at them.
Corporate foundations aren’t the only vehicle for corporate philanthropy, but in recent years, they’ve become one of the most prominent. As time goes on, these organizations will only continue to grow and take on issues facing the nation and the world.