Monday, August 14, 2017

From the Conference Board--Measuring the Impact of Corporate Philanthropy

In many ways, enterprise engagement with corporate social responsibility (CSR) tends to find expression in corporate philanthropy. This is a global phenomena and one that is still central to corporate expression of societal obligation even in the face of the elaboration of business and human rights structures, including the methodologies of human rights due diligence. 

The issue of measurement is increasingly important both as a measure of effective targeting of corporate activities in the societal sector.  It may also serve as a means of determining the effectiveness of measures that may have positive human rights impacts. In countries like China, it will serve as a necessary element of the social credit system as applied to enterprises.  There the need to generate measures of effectiveness of giving will serve to assess and reward programs of giving that accord with broad policy objectives. The ability to measure and defend the choices for philanthropy are also likely to become important in the West especially in the context of the monitoring obligations of boards of directors and the exercise of their duty of care.    

Our friends at the Conference Board have recently done a little research on the extent to which companies attempt to measure or evaluate the business or social impacts of their corporate giving. The Conference Board Press Release, with links, follows, along with brief thoughts.

Press Release:

Companies support the arts because they understand that their businesses thrive in growing economies and vibrant, culturally rich communities; however, they seldom measure the impact of these contributions.

Download Business Contributions to the Arts: 2017 Edition

According to new research from The Conference Board and Americans for the Arts, on average only 28 percent of companies attempt to measure or evaluate the business or social impact of their arts support. However, the percentage grows with the size of the company (to 43 percent for those with over 25,000 employees and more than half of those with annual revenue exceeding $25 million), as larger organizations have more staff and financial resources to put toward the practice. The highest proportion of respondents (67 percent) said that the arts contribute to the economy and quality of life in the community, which reflects a tendency of companies to support arts at a local level—on average, companies allocate 86 percent of arts contributions locally.

Download the report for more information about how companies measure the impact of their arts contributions.

Business Contributions to the Arts: 2017 Edition and the full Corporate Intelligence portfolioare complimentary to members of The Conference Board and its Center on Corporate Citizenship and Philanthropy. A fee may apply for non-members.


For some, the most interesting part of the report is Part III, which "looks at the approach companies take to measuring the impact of arts support, including benchmarks on the number of companies currently measuring arts support, the types of metrics that companies are collecting, and the perceived business and societal impacts that companies observe from supporting the arts." (Report, p. 5).
Only 28 percent of companies attempt to measure or evaluate the business or social impact of their arts support. However, the larger the company, the higher the percent of respondents who do measure impact. For companies with over 25,000 employees, for example, 43 percent measure either business or social impact. More than half of the companies in the $25 billion+ revenue group measure social or business impact. This tendency for larger companies to measure is likely due to them having more resources—in particular, more staff—to put toward the practice. This assertion is supported by the data on staffing numbers in Figures II.1a-c, which show larger companies have more employees dedicated to arts support, freeing up resources to address impact measurement.(Ibid., p. 45).
The metrics relied on by enterprises to measure value of donation touched on out put and use measures.  Some were qualitative in character. These included: (1) Appreciation of arts/fulfillment; (2) Attendance; (3) Final reports from grantees; (4) Growth of partner audience; (5) Media coverage; (6) Number of at-risk youth involved in arts programs; (7) Number of at-risk youth whose social and emotional learning is positively impacted through better grades, civic participation, etc.; (8) Number of people reached; (9) Number of undeserved students who are impacted; (10) Rates of board service at arts organizations; (11)Social media measures during sponsored events; and (11)Surveys from attendees. (Ibid., p. 47). Few of these touched on the relationship between giving and corporate objectives.  None would suggest any measure tying corporate benefit to the expenditure.  And it is not clear that focusing on the events where they were only partially funded through corporate giving provides an adequate picture of the impact of the giving even in particular circumstances.  In effect, at best, the measures capture the gross effect of the event for which the enterprise may have made a contribution or otherwise sponsored.  It does little to suggest the specific impact of the contribution on the event itself (would the event have been held but for the contribution, to what extent could one trace the contribution to enhancement of the event or the service, etc.). There is a sense that impact might be measured by contribution to the local economy (Ibid, pp. 48-49) but that suggests philanthropy as a sort of subsidy designed to enhance the business environment.  Yet it is not clear that is measured. And the data proffered is opinion based (Ibid., p. 50).  Though the quesitons suggest a good set of measures.


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