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Business Contributions to Canadian Communities

Findings from a Qualitative Study of Current Practices

March 8, 20078 March 2007

Issue
Business Contributions to Non-Profit Organizations

Article Link
http://www.nonprofitscan.ca/Files/misc/business_contributions_en.pdf

Based on a literature review and roundtable discussions with 47 business representatives in late 2006, this “exploratory investigation of the community investment activities of Canadian businesses” summarizes the practices and challenges, from a business perspective, related to business donations and community investment.

Business support for non-profit organizations ranges from financial and in-kind contributions to employee volunteering and matching employees’ charitable contributions. Four key reasons are given for business contributions: 1) marketing the company’s brand; 2) the success of many businesses depends on the strength of the community; 3) many businesses “need to be accepted and valued by the communities in which they operate”; and 4) an increased ability to attract and retain employees.

One key finding of the report is that there is very little documentation of business contributions to Canadian communities. The report indicates that “community investment is not very well developed and practitioners appear to be grappling with a variety of issues”. In particular, there is little, if any, measurement of the results of business contributions. This raises “questions about the extent to which community investments are being effectively managed and whether returns on these investments are being maximized”. Many businesses even had “difficulties producing accurate estimates of the total dollar value of their cash contributions”.

An Imagine Canada analysis of taxation data showed that only 3% of businesses claimed charitable donations on their 2003 tax returns, with total donations of $1 billion. A 2003 survey of non-profit organizations estimated that, through both donations and sponsorships, businesses contributed $2.8 billion to non-profit organizations.

In general, organizations must ask for assistance: “companies tend to respond to requests from community organizations rather than to proactively seek organizations that are aligned with their strategic interests”. However, many businesses are overwhelmed by the volume of requests.

It is difficult for organizations to know who to contact for donations: there is little consistency between businesses regarding responsibility for community contributions. Contributions can be influenced by the CEO, senior management, the board of directors, business owners, individual employees and separate business foundations. Larger companies are more likely to have policies, structures and staff involved in their community contributions.

Key challenges for businesses include limited staff to respond to requests, lack of internal adherence to corporate policies, and “difficulties balancing and managing the expectations of multiple stakeholders”.

The report suggests that businesspeople involved in community contributions would like “better information, training, education and opportunities to share experiences”. Areas of training and information-sharing could include:

  • Better knowledge about what other businesses are doing;
  • Information about promising or innovative practices; and
  • Better information about charitable and nonprofit community organizations.

Future research will provide a more detailed portrait of business donations based on a representative survey of Canadian businesses.

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