Survey: Companies Support Nonprofits But Budgets Decline
By SHERRI CRUZ
The squeeze is on at nonprofits, though Orange County companies still are giving.
War with Iraq, the weak economy and state budget woes have conspired to shrink nonprofit budgets while creating more demand for the help they provide.
But local businesses are doing their part for local charities, according to the inaugural California State University, Fullerton, report on corporate giving and community involvement.
Most business leaders surveyed said donating cash or services is important to the community.
“We were all impressed at the extent of the involvement,” said Colleen Sandrin, executive vice president for Orange County’s United Way and one of the collaborators on the project. “The survey helped to dispel the myth that Orange County businesses don’t care.”
The report is set to be unveiled at a university forum on Wednesday. The 62-question survey began in October with 522 randomly selected OC companies participating.
The goal: to define the nature and extent of corporate giving in the county and serve as a benchmark for future studies.
Of the 522 small to large businesses surveyed, 86% said they give money to charities. And the larger the firm, the greater the emphasis on charitable giving. About 37% of those that didn’t give said they couldn’t afford it.
Most companies gave primarily to human service organizations, followed by health, education and religious causes. About 4% of donated money went toward arts and culture programs. Most companies donate to one to 10 charities yearly.
Seventy-two percent of companies contributed through their general account, while 13% of funds came from foundations,nonprofits set up by businesses to sift through nonprofit requests.
“The funding community, in general, has been besieged,” said Dean Thorp, regional vice president for Wells Fargo Foundation.
This year, the number of requests is up, as are requested dollar amounts, which has led the Wells Fargo Foundation to focus its giving targets to groups that help low-to-moderate income communities.
Thorp oversees the company’s giving in OC and the Riverside-San Diego area, where it donates about $2 million annually,an amount based on gross revenue.
Foundations are relatively new entries in the funding game and run by employees or executives.
At Wells Fargo, Thorp decides where the money is donated in OC. The process,from request to cutting the check,usually takes 30 days, he said.
At Cypress-based PacifiCare Health Systems Inc., employee-run committees direct its donations, which are $2 million to $4 million annually.
Workers are more familiar with the needs of their community, said Bill Wood, president of the PacifiCare Foundation. But unlike Wells Fargo, where all the donations come from the company, PacifiCare’s employees raise funds,matched by PacifiCare,through events such as chili cook-offs.
PacifiCare donates for two reasons: to give back to the community and to enhance its public perception.
The healthcare industry’s reputation often is compared to that of a used car salesman, Wood said. So the company decided there’s nothing wrong with sharing its giving program with the public.
About 4.5% of businesses said improving public relations was the No. 1 reason for giving, according to the survey. Most companies,42%,said they donate to give back to the community, while rating public relations as an important aspect of their giving programs.
Companies also said they are satisfied with the way nonprofits were managing their donations.
About 48% of businesses “strongly agreed” that their donations were being put to good use, and 25% of the companies said that charitable organizations have become more effective in providing services in the past five years.
That mirrors a trend by nonprofits to become more accountable and more diligent in reporting their “outcomes,” or the number of people who have been served and the way they have been helped.
Orange County United Way, as one of the larger nonprofits, has led that movement, producing a measurement report for the past two years.
Even smaller organizations are finding ways to become more accountable to their donors.
“We went from an annual review to a full-blown audit,” said Dana Butler, executive director of the J.F. Shea Therapeutic Riding Center in San Juan Capistrano. Walnut-based developer J.F. Shea Co. has been active in OC homebuilding.
“We have to show donors we have a high degree of integrity,” Butler said. And like all businesses managing through the recession, J.F. Shea has had to cut costs and increase its cash reserve.
It also has increased its level of personal service to retain its donors. Everyone gets a phone call and a thank you, she said.
And that’s a good practice for nonprofits to follow, according to the study, because most companies want to be recognized for their donations.
The preferred method of recognition: thank you cards and letters.
