What are Corporate Donations?
Read our guide to find out what corporate donations are and the benefits for your company and recipients
What are corporate donations?
Corporate donations are sums of money given to charitable and nonprofit organisations by a business. They might be aligned to a company’s environmental or societal goals or made in response to a global disaster appeal. For example, a company might make a one-off donation to help charities responding to dangerous floods in Pakistan, or to nonprofit organisations supporting refugees fleeing the war in Ukraine.
Decisions around donations are likely to be made by decision-makers in businesses at a senior or board level with support of their Finance Corporate Social Responsibility and Communications Team. Often, companies will set criteria that beneficiaries of corporate donations will need to meet and organisations receiving donations must be registered or recognised in the countries they are headquartered and operate in.
Sometimes corporate donations are made to nonprofit organisations which already have an existing relationship or partnership with the business, such as being recognised as their ‘Charity partner of the Year’. In other cases, there may be community-driven reasons for a corporation to donate. For example, because the business operates in or has staff from territories where an emergency situation has developed.
What are the advantages of corporate donations?
Beneficiaries welcome corporate donations because they are usually large sums of money which can be immediately put to practical use to tackle the emergency or developing crisis that has prompted a business to take action by making a direct financial contribution.
The benefits for corporate donors vary, but can include:
Tax relief – depending on where businesses are based, there can be tax advantages to corporate donations. In the UK, for example, tax is calculated after the value of donations have been deducted from business profits
Communication – sometimes businesses will send out a press release regarding a corporate donation to charity, which can result in positive publicity. On other occasions, they will only communicate with staff internally about donations
Engagement – employees often feel more engaged if they can feel proud of the work their employer does and consider it ethically-motivated. Knowing that a business has made a significant donation to an important cause, might prompt an employee to donate or volunteer themselves.
Corporate donations and wider company values
Many companies recognise the importance of conveying their business purpose and values through corporate giving. Supporting a cause or causes provides opportunities to enhance their brand identity and narrative as well as strengthen their relationship with employees.
Company values that have been created with the support of the Corporate Social Responsibility Team are more likely to have a positive impact on all business stakeholders andthe potential to boost employee wellbeing and engagement, as well as business output and profitability.
Companies might choose one demonstrable overarching ‘purpose’ or mission which their corporate giving programme and CSR work aligns with. Business leaders might choose to follow one or more of the Sustainable Development Goals (SDGs). The SDGs are 17 goals presented in 2015 by the United Nations, which called on nations businesses to work towards a shared blueprint for peace and prosperity for people and the planet.
Corporate donations can fit in with wider purpose-driven goals. But, because they are often made in response to a global emergency or crisis, they might not align directly or might unexpectedly alter the purpose of a corporate donor.
Corporate donations in the context of corporate giving
Corporate donations are often made centrally from the profits of the business. They are often one-off payments and are usually separate from a business’s wider corporate giving programme, which usually offers employer-supported giving and volunteering opportunities to their employees.
Wider corporate giving programmes incentivise employees to donate time and money to good causes, often encouraging the workforce to engage meaningfully with charitable organisations in line with wider purpose-driven or organisational goals.
While corporate donations are only part of wider corporate giving programmes, they can also serve as an opportunity for businesses to encourage employees to give. For example, if a corporate donation has been made to a particular global appeal, employees might choose to donate to the same or related good causes directly from their salaries each month, such as in payroll giving.
Similarly, an employer might offer to make a financial contribution to match the time or money an employee donates to good causes. There’s usually a limit on how much an employer will match per employee annually, and the criteria for company matching will vary by organisation.
You can also learn more from the other guides in our Learning Hub.
Due diligence for corporate donations
In GivingForce’s experience, the majority of corporate donations are made in response to global disaster appeals. As a result, these fast-moving situations often get overlooked when it comes to due diligence.
Brand new charities and nonprofit organisations spring up to meet specific needs in a warzone or other developing crisis. This can add an additional layer of challenge for organisations hoping to make donations, as the newer the charity, the greater the need to make sure it doesn’t expose the donor to regulatory risk or reputational damage.
“We make sure that every donation recipient meets regulatory requirements, is not sanctioned, is classified appropriately and is operating for a recognisable charitable purpose,” says Shriya Mahatma, Due Diligence Manager at GivingForce.
“We have a verified database of charities which we have checked using Anti Money Laundering, Anti Bribery and Corruption, sanctions and risk tools.”
Read more in our blog post - Helping purpose driven businesses respond to world events safely.
Corporate donations with GivingForce
GivingForce gives you a single solution that works wherever your company does so that you can make sure all of your corporate donations made to charities and nonprofits are in line with your company’s donation policy.
Our corporate donations module gives your administrators the tools to set up corporate donation rules centrally and locally so that donations can be nominated by your employees and approved in a few easy steps.
It’s also possible to track, audit and report on all corporate donations made across the company in one place and as part of your ESG reporting.
Book a consultation for your company and find out more.
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