Recent research into the impact corporate giving has on a company’s workers shows that some types of giving lead to greater employee engagement than others—providing insight into how companies can maximize the business benefits of their charity.

The research, led by Emily Block and Michael Mannor from the University of Notre Dame’s Mendoza College of Business, first sought to benchmark whether—and to what extent—corporate giving leads to more engaged employees, a question that had been largely ignored in past studies.

“The opportunity to empirically investigate attitudes within a single organization required a large enough organization to allow for enough subunits for statistical comparison as well as an organization that allowed variation between subunits in their giving behavior,” Block told Corporate Philanthropy Report. “We were lucky enough to access these data, and our team of varied scholars were able to turn the standard question around philanthropy on its head to identify this unique opportunity.”

The researchers then looked at three specific strategies that organizations have used to enhance the impact of their giving on their workers:

  • Strategically targeting certain organizations as centralized targets for corporate giving.
  • Providing organizational direction for employee giving.
  • Providing opportunities for employees to interact with the beneficiaries of corporate giving.

Block and her team looked at corporate giving data from 53 offices of a large professional services firm in the United States collected from 2009 to 2011. This office-level giving data was then paired with large-scale survey data on the employee attitudes of over 14,000 workers at the firm during this time period.

Employee attitudes were measured using responses to a series of statements—“I am proud to say that I work for [my organization],” “I rarely think about looking for a new job with another organization,” “Overall, I would say this is a great place to work [organization],” “Overall, I would say this is a great place to work [work group]”—with which employees indicated their level of agreement on a scale of 1 to 10.

“We looked specifically at the attitude of emotional engagement,” Block said. “The benefits of emotional engagement have been well-documented by researchers and include task performance, organizational citizenship behaviors (non-task work behaviors) and improved moral judgment.”

The results showed the following:

  • Higher levels of corporate giving were indeed associated with higher average levels of employee attitudes, with data showing that giving during the year has a “positive and significant” influence on attitudes ratings at the end of that year.
  • The relationship between corporate giving and average employee attitudes was stronger when the beneficiaries of such giving are strategic for the entire organization, instead of being selected by employees themselves or chosen on the local level.
  • “Frankly, that finding was very surprising to me. I thought that local groups would connect employees with their philanthropic activity. However, our analyses suggest (but do not directly test) that beneficiary contact (having the chance to volunteer for, or at least see the positive effects of giving) is really the mechanism here,” Block said.

    He added, “My intuition is that it may also relate to the skepticism around directing money to pet causes, and that, as long as they are able to see the products of the donations, larger and more prominent charities alleviate the worry that the money is being spent on the office managers’ son’s hockey team.”

  • The relationship between corporate giving and employee attitudes is not really impacted when employees donate more of their own money to a company-supported cause, such as with companywide payroll giving campaigns.
  • “It is my inclination that employees have become accustomed to giving in this form, that it doesn’t hit their radar,” Block said. “I would suggest, rather than stopping these programs, organizations should make efforts to highlight the benefits of these programs, inviting the local chapters to give presentations or giving employees opportunities to volunteer.”

  • Corporate giving activities where employees have contact with the beneficiary organizations generally have a greater positive impact on employee attitudes than when employees have no contact or interaction. However, there is one big caveat to that: When a company gives little to an organization with which employees volunteer and otherwise support significantly, the results are reversed, the researchers found.
  • “In the case of charitable giving, providing opportunities for employees in less generous offices to see the recipients of their limited giving may do more harm than good,” the researchers explained in the report. “One potential reason for this is that faced with the unmet needs of charity recipients, employees may feel guilty in light of their office’s limited giving and perceive that their office is not doing enough to have an impact.”

Looking at the research in its entirety, Block said some simple conclusions can be drawn.

“Given the choice,” Block said, “firms should choose highly visible and reputable charities, centralize their donations and expose employees to the benefits of the firm’s contribution in order to get the most internal benefit from their philanthropic activities.”

For more information, contact Block at eblock1@nd.edu.