For further information: Audris Tillman, (212) 339-0343
The Conference Board
For Immediate Release Release #4456A
CORPORATE CONTRIBUTIONS OUTPACE PRETAX PROFITS FOR THE FIRST TIME SINCE 1994 HEALTH ORGANIZATIONS NOW GET MORE THAN EDUCATION
NEW YORK, November 30, 1998 -- Company contributions to worthy causes rose to $2.51 billion in 1997, up 3% from the previous year, the Conference Board reports in its upcoming study. This year's study, which covers 211 large and mid-sized U.S. firms, marks the first time since 1994 that the rate of growth in contributions exceeded the growth rate in pre-tax income.
Contributions by participants in the Conference Board study represent nearly one-third of all contributions reported to the Internal Revenue Service on corporate income tax returns.
The 172 companies that responded to both the 1996 and 1997 Conference Board surveys said their contributions grew by 20%-from $1.79 billion in 1996 to $2.14 billion in 1997.
"Last year, companies' contributions to communities and worthy causes were fueled by the robust 1997 U.S. economy," says Audris Tillman, research associate at The Conference Board and author of the report.
In terms of pretax income, a factor against which companies determine and measure their giving budgets, survey participants report increases in 1997, after three years of stagnant growth from 1994 to 1996. Contributions were 0.8% of 1997 consolidated pretax income, up slightly from 0.7% in the previous year and closer than before to the national average, which was 1.1% in 1997.
NONCASH GIFTS NEARLY ONE-QUARTER OF TOTAL CONTRIBUTIONS
Cash contributions predominate in most industry groups. But noncash contributions (e.g., company product, property, equipment) continue to be an important component of corporate grantmaking strategies.
Using the tax (also known as "cost") valuation required by the IRS on its income tax forms, 1997 noncash contributions by survey respondents totaled nearly $600 million, or 24% of their total contributions. Not surprisingly, manufacturing industries such as computers and pharmaceuticals donated significant amounts of company products and other items (of which both industries gave more than 60% of their totals). However, service industries, among which such donations are more rare, contributed 9% as noncash in 1997, up from 1% in 1996.
"Clearly, some service industries are not willing to accept the notion that they can contribute only cash," Tillman says. "Telecom companies and retailers and wholesalers are examples of industries that augment their cash donations with company products or services and other noncash items."
HEALTH AND HUMAN SERVICES OVERTAKES EDUCATION AS MOST POPULAR BENEFICIARY
For the first time in more than a decade, survey participants report giving more to health and human service organizations than to education. In 1997, health organizations received 35% of total contributions, up from 25% in 1996. Giving to education, on the other hand, fell slightly from 30% to 29% during the same period.
Dollar amounts to each of the four main beneficiary categories (health and human services, education, culture and the arts, and civic and community) increased in 1997.
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