By Eric Saarvala
Corporate philanthropy is a vital component of a company’s social license to operate and has become more deeply integrated with corporate responsibility, sustainability, and environmental, social and governance programs (commonly referenced as “ESG”) over the last few years.
Corporate philanthropy has historically and typically operated as a singular business unit. The community investment team did not usually engage with the sustainability team before ESG became increasingly important to organizations and part of the overall social impact of the company.
Corporate philanthropy, one of the “S” activities in ESG, refers to the initiatives and social causes in the community that are supported by a company’s charitable programs and activities. These activities may include:
- financial donations direct from the company or grant from the corporate foundation
- employee volunteer programs
- in-kind contributions (which may be goods or services to address societal challenges)
- cause-related marketing
- corporate sponsorships of charities and volunteer grants based on an employee’s volunteerism outside of work
- corporation matching; donations to charities supported by their employees
These types of charitable support have become even more critical as the need and demand for services from charities has increased — alongside of higher cost-of-living expenses; as social issues have become more complex and, as climate events such as wildfires and hurricanes devastate communities.
There is an increasing correlation between the “E” and the “S” of ESG. Environmental events impact charities when people displaced from their homes require food, water, housing and other services. As climate events become more severe and frequent, there will be even more dependence on charities for support.
Financial donations or grants
Corporate donations or grants support vital causes through community investment programs or go directly to organizations that reflect their stated areas of interest. Or, the company may form strategic corporate partnerships that move from transactional to interactive transformational relationships.
Companies that donate at least 1% of pre-tax profits to Canadian communities can receive a Trustmark from Imagine Canada. Since 1988, the PRISM Community Impact Company Network, formerly, the Caring Company Program, reflects companies that commit to community investment through donations which include paid volunteerism of their employees and in-kind contributions.
Employee volunteer programs
Many companies encourage their employees to take on volunteer opportunities, even during work hours, (“paid volunteerism”) because giving back can offer multiple benefits. For example, tasks that require certain skills can offer skill-building opportunities.
Companies can also benefit because promoting volunteerism that aligns with their purpose and values can attract talent and enhance employee retention. A social-good software company called Benevity reported that surveyed companies with employees who participated in volunteerism and giving programs reduced turnover by an average of 57%. Some businesses manage, track and measure their employee volunteer efforts using volunteer management software.
Volunteer tasks are traditionally event-based, ie. employees participate at a charity event. Others need help with short or longer-term projects, like updating and enhancing a charity’s website. Some volunteer activities are referred to as “acts of kindness” as the volunteer activity does not benefit a specific charity — such as cleaning up a local park in the community where the company is located.
Great Place To Work is a global leader that helps businesses create employee experiences that make people feel valued and acknowledged for who they are and their unique needs. Their article on the 8 Best Employee Benefits notes that increasingly, people want their paid work to be an extension of their contribution to society. They appreciate companies that offer benefits that encourage volunteerism, which empowers employees to make a difference in their community. The “benefits” may include paid time off to volunteer during work hours, matching donations, or making a donation or grant to the charity that an employee volunteers at in their own time.
Volunteer grants
Companies may also recognize an employee’s volunteerism outside of the workplace in the form of a donation or grant. Whether employees serve on the board of directors of a charity, volunteer at a soup kitchen or pack food at a food back, companies have programs that offer a donation or grant for volunteerism during personal time. The program can also be referred to as “dollars for doers”. Some companies also offer a “volunteer time off” program where employees can receive personal time off after volunteering with charities in the community for a total number of hours.
In-kind contributions
An in-kind contribution of goods may be food, hosting a clothing drive, or donations of company products and pro-bono services.
Cause-related marketing
Cause-related marketing leverages a company’s product or service by partnering with a charity to address a social cause. Part of the revenue of the sale of the product or service goes to charity. Businesses may also incorporate a point-of-sale method to capture immediate cash donations for a charitable cause.
Corporate sponsorship
Sponsorship of a charity or a charity event or program can be attractive, offering a company improved brand recognition and reputation. This type of funding usually comes from a company’s marketing budget, and because a charity offers them recognition benefits, sponsorships are not eligible to receive a corporate charitable tax receipt.
Corporate responsibility and sustainability – ESG
While overall program semantics may differ by company, the goals are reflective of a company’s accountabilities to their constituents, interested parties and the public for their impact on the communities and environments where they are operating. Considering the social impact of a company goes beyond corporate philanthropy, however, charitable partnerships still play an important role. For instance, as an environmental sustainability initiative, company volunteers can help a charity to clean up a shoreline or a park or assisting with tree planting may be part of a carbon-offsetting program for a company’s climate strategy.
For companies that have diversity, equity and inclusion (DEI) programs and employee resource groups, there can be purposeful engagement with volunteer and giving opportunities with 2SLGBTQI+ and Indigenous charities or Black-led or Black-serving charities where there is greater need for support. For example, in the “Unfunded: Black Communities Overlooked by Canadian Philanthropy” report by the Foundation For Black Communities and Carleton University’s Philanthropy and Nonprofit Leadership program, the data shows that Black-led groups received only 0.03 percent of total grants dispersed by the top 10 Canadian foundations in the 2017 and 2018 fiscal years, and Black-serving organizations received only 0.15 percent of grants in the same timeframe.
Companies can engage with such organizations by creating employee learning opportunities, like bringing in speakers to educate employees on Black History Month and the National Day for Truth & Reconciliation and other DEI-aligned activities and events.
Going beyond corporate philanthropy to create social impact can be achieved within a company’s supply chain. For instance, some Toronto companies with environment sustainability goals lower their carbon footprint by using the courier Good Foot Delivery, a registered charity, which “provides meaningful employment for the neurodivergent community through a reliable, professional courier service delivered via public transit and on foot.”
Another example may be found in Toronto businesses requiring catering for meetings or events using charities like Fred Victor, a social service charitable organization that fosters long-lasting and positive change in the lives of homeless and low-income people living across Toronto. Fred’s Kitchen offers on-the-job culinary training and employment opportunities to people at risk of homelessness, newcomers, and those facing barriers such as addiction or mental health challenges.
Our financial management company, Raymond James Ltd, practices corporate responsibility through our Raymond James Canada Foundation. One multi-faceted example is our ongoing engagement with the Native Women’s Resource Centre of Toronto (NWRCT). Our 3Macs branch, a division of Raymond James, has built a special relationship with NWRCT and their Executive Director, Pamela Hart. During RJ Cares, our annual volunteer service month in May, our employees participate in various NWRCT volunteer initiatives, and the Foundation matches their donations to the charity. We invited Ms. Hart to present at the 3Macs branch kick-off of RJ Cares month. Our Canadian Mosaic Inclusion Network, an employee resource group of the Raymond James Ltd. National Inclusion Council, provided a grant to NWRCT and hosted Ms. Hart to provide a learning opportunity for Raymond James Ltd.’s employees for the National Day for Truth and Reconciliation. As part of the event, an Indigenous caterer provided the food for the event.
While corporate philanthropy is one lever of social impact within a corporate responsibility, sustainability or an ESG program, there are many more business levers and activities that companies can leverage from their business operations to create greater social impact in the communities and environments where they operate.
Eric Saarvala is Head of Corporate Sustainability, Raymond James Ltd., and Executive Director of the Raymond James Canada Foundation.
Eric has 25+ years of consulting and management experience in social impact through strategic philanthropy, corporate responsibility and sustainability. Eric has also helped organizations advance the United Nations Sustainable Development Goals. He has an Executive MBA from the Ivey Business School at Western University, a Graduate Diploma in Social Responsibility and Sustainability from the University of St. Michael’s College in the UofT (G. Dipl. SR&S).
Related Posts
