Despite Tough Times, Some Retailers Increase Giving

Despite sales declines that have reached double digits in some cases, many corporate retailers are pulling out the stops to maintain their charitable giving, USA Today reports.

Of the eleven retailers that provided information to the Chronicle of Philanthropy for its annual report on corporate giving, which appeared in August, four — Target, Wal-Mart, Home Depot, and Costco — said they planned to increase their giving in 2008, while the other seven said their giving would remain the same. “There’s no formula that says when profits are up, giving is up and when profits are down, giving is down,” said Margaret Coady, director of the Committee Encouraging Corporate Philanthropy. “There are many factors that determine giving, including the commitment that companies have to communities and nonprofit partners.”

In part, the continued commitment to charitable causes and organizations is smart business, as consumers in growing numbers say they prefer to buy cause-related products or from retailers who are also good corporate citizens. According to an August poll for Boston-based marketer Cone, more than 75 percent of consumers said companies should support social or environmental causes and nonprofits, even during economic downturns.

At the same time, many big-box retailers see their giving as a way to foster goodwill in communities that may be concerned about megastores driving out smaller local businesses. Always on the cutting edge, Target, the fourth-largest retailer in the country, has given 5 percent of its net income every year since 1942 to charitable causes, mostly in the area of education, while the country’s top retailer, Wal-Mart, has announced eight charitable initiatives since November alone.

“Consumers are struggling to pay their own bills, but their friends and families are getting laid off, and they almost can’t help but feel a sense of compassion,” said Cone executive vice president Alison DaSilva. “Companies who recognize this mind-set of consumers will gain a competitive advantage.”

O’Donnell, Jayne. “Despite Tough Times, Retailers Are Giving More to Charity.” USA Today 12/23/08.

Source: Philanthropy News Digest , PND