Report Notes 'Consistently Slow Growth' in Corporate Giving

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Corporate giving to education failed to keep pace with inflation in 1993, but preliminary estimates suggest modest growth for this year, a Council for Aid to Education report shows.

The council's annual report, released this month, found that charitable giving by corporations and their foundations climbed 2 percent in 1993, to $6.05 billion, after a 1 percent decline the previous year. But when adjusted for inflation, giving actually declined 1 percent.

"Taken together, the past eight years constitute the longest period of consistently slow growth in corporate contributions in recent history," the report says.

Increases averaged a moderate 2.9 percent between 1986 and 1993, in contrast to the 16.2 percent average annual growth rates of the late 1970's and early 1980's.

The council, a New York City group that tracks private support of K-12 and higher education, found "continued evidence of strong corporate support" for K-12 education.

The proportion of corporate education dollars going to the precollegiate sector has increased steadily since the early 1980's, from 5 percent in 1983 to 15 percent in 1992.

While higher education continues to receive the lion's share--about 70 percent--the percentage set aside for "other education programs" has declined over the past two decades. This category includes scholarships, fellowships, and education-related organizations.

The decrease for such programs is the result of better reporting practices as well as a move toward projects affiliated with specific institutions, rather than general support, the council said.

The council based its findings on the responses of 321 companies to an annual survey on corporate contributions, which the council and the Conference Board, a New York City research group, co-sponsor.

Giving From All Sectors

Giving to education in 1993 from all sectors--corporate, foundation, individuals, and bequests--totaled $15 billion, up from $14.29 billion in 1992, according to the latest Giving U.S.A., the annual overview of philanthropy published by the A.A.F.R.C. Trust for Philanthropy.

Looking ahead on corporate philanthropy, the report says "companies can respond to their improved financial health in numerous ways," one option being to rebuild their foundation assets, which likely would mean a lag before companies' grantmaking reflects increased profit margins.

It is also possible that corporations may continue to deplete their foundations' assets and make more direct gifts, the report says. They could also opt to support the work of nonprofits through other departments, such as marketing, advertising, and community relations.

Corporate-foundation grantmaking, the report notes, is only a portion of total corporate giving. Grants to nonprofits from corporate foundations represented about $1.6 billion of the $5.9 billion in charitable contributions from U.S. companies last year.

"For these and other reasons," the report says, "the direction and form of corporate giving has been difficult to predict and describe."

Giving by independent foundations to all causes totaled $9.21 billion last year, a 6.56 percent increase over 1992. There are 35,765 grantmaking foundations in the United States; their grants accounted for 7.3 percent of all charitable giving in 1993.

Corporate giving accounted for 4.7 percent, giving by bequest was 6.8 percent, and giving by individuals continued to represent the majority of charitable contributions, 81.2 percent, or $102.55 billion.

Copies of Giving U.S.A. are available for $45 each from the A.A.F.R.C. Trust for Philanthropy, 25 West 43rd St., Suite 820, New York, N.Y. 10036; (212) 354-5799.

Copies of "Corporate Support of Education 1993" will be available next month for $20 each from the Council for Aid to Education, 342 Madison Ave., Suite 1532, New York, N.Y. 10173; (212) 661-5800.

Vol. 14, Issue 04, Page 8

Published in Print: September 28, 1994, as Report Notes 'Consistently Slow Growth' in Corporate Giving
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