As the world grows more connected, global volunteering and giving is increasing as a priority for businesses. According to a 2013 study, nearly 60% of companies reported foreign charitable donations, which seems logical when you consider two factors at play: 1) corporate philanthropy is an ever more important investment for businesses, and 2) more businesses are entering foreign markets, which means they now have stakeholders crisscrossing the globe.
The study, “Giving Beyond Borders: A Study of Global Giving by U.S. Corporations,” was sponsored by Global Impact and created by the Lilly Family School of Philanthropy. It opens by asking, “To which society should a multinational enterprise be responsible—home, hosts, or all of these?” And “To which society’s values does a company refer when making its principled decisions?”
The current implications of these questions can be found in the intriguing data uncovered by the report. For example, one type of international giving that is particularly popular amongst companies is disaster relief. Forty-six of 50 surveyed companies reported giving charitably to disasters since 2001; a majority donated to both domestic and international disasters.
Most companies have set policies guiding disaster response; one-third of surveyed companies have a contingency fund budget for future disasters. The highest percentage of surveyed companies indicated that the community impact (e.g., the scale of the disaster and the number of people affected) is the most important factor in determining how they respond to a disaster. The second-largest proportion of surveyed companies highlighted the disaster’s impact on their employees as a key factor driving their response.
This feedback reinforces the notion that the time for a company to prepare for disaster relief philanthropy is now, before disaster has struck. How a company responds to disasters can have implications for the perceived - and actual - integrity of its brand. Despite this, too many companies are ill-equipped to react effectively to global emergencies; in times of crisis, these organizations can only muster feeble and delayed responses...if any response at all. (Read more on the right way to prepare for disaster relief here.)
The Global Impact study illuminates other ways that companies are demonstrating their international corporate citizenship and how they are prioritizing their involvement. Here are the key takeaways that jumped out:
**The top two resources that surveyed companies identified as most beneficial to their charitable involvement overseas are: “Vetting of nonprofits and facilitation of partnerships with international nonprofits”; and “Employee engagement strategy.”
**Companies’ overall charitable giving goals reflect a widely held emphasis on shared value. The top two goals identified for giving by surveyed companies were “supporting the company’s mission and values” and “giving back to the communities where the company operates.”
**“Needs in local communities” is the most influential factor determining corporate overseas giving, selected by the highest share of surveyed companies that gave internationally. “The company’s business operation or financial performance in the host country” ranked the second, indicated by about half of companies.
**The notion of shared value is also reflected in companies’ decision-making over charitable funding. Surveyed companies most frequently prioritized “alignment with business objectives”and “needs in local communities” when making funding decisions.
**Asia and the Pacific region attracted the most attention from companies that donated internationally, with a majority giving to this geographic area.
**Most surveyed companies that gave internationally did not focus on a specific geographic region. Nearly 60% made charitable contributions globally to almost every geographic area or without a specific geographic focus, while 26% gave in a focused manner, giving to only one or two regions.
**Many companies that gave internationally supported end recipient organizations in both developed and developing countries, with 19% giving only to developing countries.
**Regional and local offices have more autonomy in decision-making for international giving, while decision-making around overall (both domestic and international) charitable activities is generally centralized.
**When giving overseas, most companies donated through multiple channels to support end recipient organizations abroad. A majority of companies that gave internationally reported giving through U.S. nonprofits. About three-fifths made their charitable giving directly to foreign organizations equivalent to U.S. nonprofits.
**When companies consider establishing or maintaining a relationship with recipient organizations, factors that encompass the shared interests of companies and nonprofits generally ranked higher than the attributes of nonprofit organizations themselves. The alignment between a nonprofit’s mission and a company’s philanthropic focus ranked as the most important deciding factor for companies. Companies also prioritized the effectiveness and efficiency of nonprofits in producing results over other organizational attributes.
**Analysis of Fortune 100 companies’ charitable giving, their financial indicators, and other attributes reveals that companies’ charitable giving is influenced by their financial performance. There is evidence that companies give when they are financially successful, but they decrease their giving when cash is tight.
**Analysis of Fortune 100 companies’ million-dollar-plus charitable gifts, their financial performance, and other attributes finds that operating in foreign markets influences their large international gifts. And companies with at least one foreign subsidiary gave more gifts at the million-dollar level and above between 2000 and 2010 than companies that had no foreign subsidiaries.
**Companies increasingly emphasize measurement and evaluation of philanthropic initiatives. The interviewed companies in this study expressed a desire to evaluate and measure the long-term, sometimes intangible, impact of their giving.
**Developing approaches to track both quantitative and qualitative measurements of philanthropic engagement helps inform better decision-making.
Interest in international giving shows no signs of abating, as more than four-fifths of companies that gave internationally reported planning to increase or maintain their foreign giving budget size. If your company is engaged in corporate philanthropy on a global scale, or is considering broadening its engagement past domestic borders, the Global Impact study demonstrates how other companies are making decisions about their international involvement.