MIT Sloan Management Review Article on Boosting Charitable Giving Can Also Boost Profits

As we head into the final weeks of 2021, many nonprofits across the country face an important question: Will corporations step up their donations to charity, or continue last year’s slide? In 2020, as the pandemic swept across the world, giving by individuals went up substantially, with Americans donating $471 billion, a 5% increase from 2019 levels. Giving by foundations spiked 19%, to $89 billion. But corporate giving fell by 6%, to $17 billion.

The Lilly Family School of Philanthropy, which gathers data for its annual Giving USA report, explained that “corporate giving was affected by declines in aggregate GDP and corporate pretax profits.” In 2020, corporate giving accounted for only 3.6% of total contributions to charities, “the lowest recorded value in the last 40 years.” While the pandemic certainly played a role in the decline, corporate donations had already started to become a smaller fraction of the total in previous years. Between 2017 and 2019, corporate giving did go up, but donations by individuals and foundations grew more quickly.

About the Author

Andrew Forman is founder and CEO of Givz (@getgivz), which works with brands to incentivize potential customers to purchase by rewarding them with money to allocate to any charity of their choice.

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