10 Feb. 2014 | Comments (0)
In my last post, I reported that although employee engagement in the corporate philanthropy field is a high priority for companies, employee grant-making committees are not the most common vehicle for such engagement. Nonetheless, a core group of U.S. companies (34 percent) do use such committees to guide at least a portion of their grant making. In part two, I look at how these committees are typically structured.
If you were to randomly sample an employee grant-making committee in the United States, it might look like this:
- Between six and ten employees from the company’s headquarter market.
- Distributes up to 5 percent of the company’s grant budget.
- Meets quarterly to decide which domestic charities will be the recipients of their authorized budget.
This is not to say that these characteristics are exclusive. The following charts help to illustrate how the structures of employee grant-making committees differ.
Committee structure and operations
Although six to ten people is a common size for committees, we also found that around 35 percent of committees are much larger, with at least 16 employees serving. A small majority of respondents said that their committees comprised solely domestic employees. Forty-seven percent of committees in the sample do extend membership to international employees, reflecting the importance that companies are placing on expanding their philanthropic programs globally. No one technique stands out for recruiting employees to serve on committees. Most companies reported a mix of processes including applications, nominations and assignments. Companies even use different processes to recruit domestic and international employees. None of the respondents feels the need to provide incentives to employees for participation in employee grant-making committees, reinforcing the fact that strong corporate philanthropy practices are an effective tool for engaging employees.
The proportion of grants for which employee grant-making committees are responsible varies. Around one-third of companies said their committees distribute 5 percent or less of the company’s grant-making budget. However, a number of companies (27 percent) are more generous, giving more than 15 percent of their grant-making budgets to employee committees for distribution. Another 27 percent do not pre-determine an allocation at all, likely working with committees to settle on the most appropriate recipients and amounts based on company strategy. Global giving is certainly on the rise in the corporate philanthropy field, but companies can face difficulties when it comes to vetting international recipients, often limiting the number of international-based nonprofits to which they donate. This might explain why the majority of employee grant-making committees do not have a mandate to distribute grants internationally. In our survey, 67 percent of respondents said their committees distributed solely to domestic charities. I’d like to thank all the companies that participated in the survey. If you are interested in learning more, please feel free to get in touch.
In December last year, we surveyed 53 U.S. companies to understand whether employee grant-making committees are a common vehicle for engaging employees in the grant-making process, and how those committees are typically structured where they do exist. To ensure anonymity, we will not reveal the names of participating companies.