What Types of Charities are Getting Corporate Donations?

Michael H. Hall - Director - Research
Laura G. Macpherson - Research Associate

Highlights

• Corporate donations account for 9% of the total fundraising revenues reported.

• Over half of all corporate donations go to charities with revenues of over $1.5 million.

• Almost 70% of corporate donations go to Education, Other or Social Service charities.

• The typical donation received by Hospital, Education, Health and Other charities is almost twice that reported by Social Service, Community Benefit and Arts & Culture charities.

• The bulk of corporate donations (over 40%) go to Ontario charities.

Corporations are reporting an increasing number of applications from charities for financial support. As Jodi White, Vice-President, Corporate Affairs for IMASCO Limited, observed in the July 1996 issue of Front & Centre, "The private sector is being flooded with requests for large amounts from quasi-governmental institutions like hospitals and universities, and more modest amounts from a large number of smaller agencies." Charities that are approaching corporations for donations may find it useful to know where corporate funding is currently going and who is competing with them for corporate dollars.

The data presented in this Bulletin come from the Centre's recent survey of the fundraising practices of Canadian charities (Hall, 1996), conducted by Decima Research in the summer of 1995. We surveyed over 1,500 Canadian charities (excluding places of worship, religious charities, and private foundations) that reported fundraising revenues of $1,000 or more in 1993. Charities were asked, among other things, to report the amount of money that they received from corporate donations. It should be pointed out that we do not have information on gifts-in-kind from corporations or contributions of volunteer time. We do, however, have a picture of where corporate financial contributions are being directed.

Although corporate donations accounted for only 9% of the total fundraising revenuesą reported, they are nevertheless an important source of funding for charities (see Figure 1). Over half of the charities we surveyed reported soliciting funds or gifts-in-kind from Canadian corporations in their previous fiscal year. However, corporate donations are not equitably distributed within the charitable sector. As will be seen, the extent to which charities receive corporate donations varies according to their size, the type of activity in which they engage and their location in the country.

Size of Charity

As Figure 2 shows, over half of all corporate donations go to the largest charities, those with revenues of over $1.5 million dollars. These charities, however, represent only a small portion (16%) of non-religious, non-private foundation charities. Almost a third of corporate donations go to those with revenues between $500,000 and $1.5 million. In contrast, only 15% of all corporate donations go to the remaining 68% of charities (those with revenues less than $500,000).

How much are charities typically getting from corporations? Not surprisingly, smaller revenue charities (revenues under $125,000) typically receive only modest amounts from corporate donations. At least half report donations of $4,000 or more. In contrast, at least half of all large revenue charities (revenues over $1.5 million) report donations of $112,000 or more.

Type of Charity

Let us next turn to the pattern of funding to different types of charities. We examine donations to seven types of charities which have been classified according to their self-identified major purpose or activity (see Table 1). As Figure 3 shows, the bulk of corporate funding (almost 70%) goes to three types of charities: Education charities, Other charities and Social Service charities. Education charities receive 26% of all corporate donations despite comprising only 14% of the charities surveyed. Other charities receive over 20% of donations but only comprise 10% of the charities surveyed. Other charities receive over 20% of donations but only comprise 10% of the charities surveyed.

Some types of charities receive a much smaller proportion of corporate donations than would be expected on the basis of their relative numbers in the sector. Although Social Service charities receive almost 20% of all donations, they comprise almost 30% of all charities. Community Benefit charities receive the least amount of corporate donations (only 3%) despite being among the most prevalent types of non-religious charity.

Looking at the amount of corporate funding that different types of charities report, Figure 4 shows that the typical Hospital, Education, Health, and Other charity obtain almost twice as much in corporate funding than do Social Service, Community Benefit and Arts & Culture charities. For example, at least half of the Hospitals in our survey report receiving at least $18,000 (the median value) while for Social Service, Community Benefit and Arts & Culture organizations, the median is only $5,000 to $6,000.

Regional Location

The bulk of corporate donations go to Ontario charities (see Figure 5). Moreover, Ontario charities receive proportionally more in corporate donations than would be expected simply on the basis of their relative numbers. Charities in Manitoba, Saskatchewan and the Territories, on the other hand, receive the least amount of corporate donations, much less that would be expected on the basis of their numbers.

Conclusion

As we have shown, the bulk of corporate donations are presently going to larger revenue charities (especially those with revenues over $1.5 million), Education, Social Service and Other charities, and those that are based in Ontario. Those charities that are seeking to increase the amount of funding they receive from corporations or that are attempting to obtain corporate donations for the first time will find themselves competing primarily with these types of charities. They would be well advised to investigate the corporate donation policies of potential donors to determine their criteria for funding and to ensure that their organization meets such criteria before investing substantial time and energy in their appeals for donations.

Figure 1

Figure 2

Figure 3

Table 1

Figure 4

 Figure 5

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