On the face of it, it might seem strange for a corporation to give away some of its profits. After all, a public corporation operates to make money for its stockholders. Corporate philanthropy still remains controversial at some companies for this reason. Corporations, even those with supportive boards and stockholders, must justify their philanthropic expenses as good for the bottom line. This is why, when all is said and done, corporate philanthropy is about public relations and marketing the company’s name and products to some degree.

Corporations give money to charities to …

Formal corporate giving has only been active in a substantive way since 1935, when the tax laws were structured to permit (and encourage) greater corporate giving. Since then, corporate giving has become an important part of funding for charities of all kinds. According to the AAFRC Trust for Philanthropy’s Giving USA report, corporations in 2009 gave away some $14.1 billion. An enormous part of that was in-kind donations (free stuff), principally pharmaceuticals donated by manufacturers. Health and human services captured the largest share of corporate giving, followed closely by education. Environmental causes came in last with only 2.5 percent.

Corporations give their money away through a variety of mechanisms based on how the company’s structured and what it wants to accomplish through charitable giving. In this chapter, we look at corporate foundations, giving programs, matching gifts, sponsorships, and in-kind gifts.