Reasons for Companies to Partner With Charities

Companies that support charities receive many commercial benefits including improved brand reputation, increased customer loyalty, tax breaks, strong community relationships, and more awareness among potential customers on social media. Other potential benefits include a faster growth rate, a stronger growth rate, increased sales, and a larger customer base. Detailed statistics and findings are below.

GENERAL BENEFITS

• Companies that partner with local charities create strong community bonds, which impacts public sentiment and loyalty.
• This commitment to the community is often critical to developing connections with customers and local decision-makers.
• Partnering with local charities also benefits future business opportunities, as Katie Coates, APR, author of “Vote Yes: The Developer’s Public Hearing Plan, stated, “If [companies] require assistance in the future, they will already have the relationships in place to communicate effectively with decision makers.”
• John Crossman, CEO of commercial real estate developer Crossman & Company, who has been partnering with charities since 2004, stated, “Do it (give to charities) because you believe in it and assume no financial return. That said, you will get a return.”
• Charitable donations often qualify for tax benefits, which is another way that companies can benefit financially from supporting charities.

RETURN ON INVESTMENT

• Companies that are purpose-driven have achieved a CAGR of 9.85% over five years “compared to just 2.4% for the whole S&P 500 Consumer Sector.”
• Robin Leigh, founder and CEO of the Certified Charitable Giving Alliance, indicates that companies can see a 10% to 35% growth in business because of their charitable giving.
• Unilever’s Sustainable Living products increased 50% faster than the rest of the company in 2016. Many of these brands partnered with charities to address social issues, including Dove, Vaseline, Hellmann’s, Signal, and more.
• According to the Shelton Group’s 2018 Brands & Stands study, social purpose is the third most effective way for a business to boost brand image, after introducing new or updated goods and delivering exceptional customer service.
• According to the 2018 Porter Novelli/Cone Purpose Premium Index, purpose accounts for 13% of a company’s overall reputation, and the two are inextricably connected.
• Businesses with a higher rating on the 2018 Porter Novelli/Cone Purpose Premium Index will profit more since customers are more likely to prefer that brand via trial, purchase, and community support.
• Additionally, American consumers are more interested in what purpose-driven businesses have to say and are twice as likely to consume information from firms with higher purpose rankings on social media and via conventional means.
• The top two businesses on the Purpose Premium Index also rank well on the Reputation Index (Amazon and UPS). Four of the top ten businesses on the Purpose Premium Index were also on the top ten list for the Reputation Index (Amazon, UPS, Colgate-Palmolive, and Alphabet).

CONSUMER SENTIMENT

• When given two choices of companies that offer similar services, 70% of consumers stated that “personal relevance of cause” was the primary reason for selecting one company over the other.
• Additionally, 76% of consumers believe it is acceptable for companies to make money and support causes at the same time.
• According to the 2018 Edelman Earned Brand research, 50% of global customers make purchasing decisions based on their beliefs. In the United States, 59 percent of customers are motivated by their beliefs, up from 47 percent in 2017.
• The majority of consumers of all generations are “belief-driven buyers,” with 68% of millennials, 67% of gen xers, and 56% of baby boomers identifying as such.
• Likewise, the majority of all consumers at all income levels are considered “belief-driven buyers,” with 62% of low-income, 62% of middle-income, and 69% of high-income consumers identifying as such.
• Additionally, 64% of global customers will select, switch, shun, or boycott a brand depending on its position on social concerns.
• According to Shelton Group’s 2018 Brands & Stands study, 64% of respondents who believe it is important for businesses to take a stance on social problems are highly likely to buy a product as a result of that commitment.
• Additionally, 64% of customers think businesses should give continuous assistance for problems related to the goods or services they provide. This compares to 13% who believe businesses should promote current news stories.
• After learning what a brand stands for or supports, 34% of consumers felt better about the brand, with 16% stating that they felt better about the brand because it took a stand on an issue that aligns with the products and services they offer and 13% stating that they felt better about the brand because it supported one of their favorite causes.
• According to the 2018 Porter Novelli/Cone Purpose Premium, 73 percent of Americans value businesses that support significant causes.
• Additionally, 68% of customers desire to share information about businesses that exhibit social responsibility.
• According to MWWPR’s CorpSumers on the Rise study, 90% of respondents are more inclined to test a company’s product and 80% are ready to pay a premium for goods from businesses who advocate for social and public policy causes.
• Additionally, 43% of respondents desired that businesses take a position on topics, even if it contradicted their own beliefs.
• Nearly half (48%) of respondents stated that they remained a client despite dissatisfaction with a product or service because they believed in the company’s purpose or principles.
• Similarly, 68% of respondents indicated they would abandon a brand entirely if their values were no longer aligned.

COMPANY PERCEPTION OF PARNTERING WITH A CHARITY

• Based on a study conducted by New Philanthropy Capital, 91% of corporations say that “enhancing brand or corporate reputation” is the leading motivation for partnering with a charity.
• In addition, 89% of corporations believe that such partnerships increase their ability to improve the community.

CONCLUSION

• Most available statistics support the idea that companies that partner with charities receive benefits in the form of improved brand reputation and customer loyalty.
• Some financial statistics show that purpose-driven companies grow faster and at a higher rate than those that are not purpose-driven.
•  Tax benefits offer even more incentives for companies to work with non-profits.
•  Belief-driven consumers are on the rise both globally and in the U.S., which means that companies that do not engage in some sort of purpose marketing will likely fall further behind competitors that do.