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Alabama Giving Survey Results. Respectfully Submitted By: New South Research 3000 Riverchase Galleria, Suite 405 Birmingham, AL 35244 Phone: (205) 443-5350 Fax: (205) 443-5340 Email: jjager@newsouthresearch.com.
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Alabama GivingSurvey Results Respectfully Submitted By: New South Research 3000 Riverchase Galleria, Suite 405 Birmingham, AL 35244 Phone: (205) 443-5350 Fax: (205) 443-5340 Email: jjager@newsouthresearch.com
“We are more than a business. We’re a part of the system of the community. It’s critical that we put money back into the community.”
Introduction To assess the attitudes of business leaders of Alabama concerning charitable giving practices and to understand community involvement by businesses, New South Research conducted 400 surveys with leaders from a range of industries, geographies and company size. Specific objectives of the research were to examine: • Motivations for and perceived benefits of charitable giving; • Hindrances to charitable giving; • Key factors and people involved in the decision to donate and contribute; • Whether respondents believe their giving helps Alabama’s economic and community development; • Philanthropic, volunteer and community involvement of the respondents’ businesses; • Cross-tabulations of the results by the business’s industry, revenue, size and geography.
Introduction • To accomplish these objectives, NSR conducted a telephone survey with 400 Alabama business leaders who have knowledge of their company’s charitable giving practices. Most often, these were company owners, managers or those who are specifically designated to be in charge of the company’s giving. • All telephone interviewing was conducted from a central telephone facility in Birmingham, Alabama, using professional interviewers. Prior to the commencement of interviewing, all interviewers were thoroughly briefed on the purposes of the study by a trained supervisor. Supervisors were present at all times interviewing was being conducted. No problems were encountered which would affect the quality of the data or the findings presented in this report. • During the course of the interview, the respondents were asked a couple of open-ended, non-multiple choice questions. Their various answers are grouped into categories that best fit their answers. The categories of answers are presented in the body of this work. • The statistical margin of error, based on 400 interviews, is 4.9 percent at the 95 percent confidence interval. That is, if all businesses in the area studied were included in the survey, the results should vary no more than 4.9 percentage points from the results reported in this study.
Introduction • The following slides represent a map of the sample’s geographical segments and segmentation by business size. The geographical sampling was used to accomplish a representative mix of companies in Alabama. The segmentation by business size allowed for a broader picture of giving in Alabama, from companies with many employees that have the means to give large amounts to companies with fewer employees that may give smaller sums.
Lauderdale Limestone Jackson Madison Colbert Lawrence Morgan Franklin De Kalb Marshall Cherokee Winston Cullman Marion Etowah Blount Lamar Calhoun Walker Fayette St. Clair Cleburne Jefferson Talladega Tuscaloosa Randolph Pickens Clay Shelby Bibb Coosa Chambers Chilton Greene Tallapoosa Hale Sumter Perry Elmore Lee Autauga Macon Dallas Montgomery Russell Marengo Lowndes Bullock Choctaw Wilcox Barbour Pike Butler Crenshaw Monroe Clarke Henry Conecuh Dale Washington Coffee Covington Houston Escambia Geneva Baldwin Mobile Sample Design Target Area 1: Metro Birmingham Target Area 2: Other Major Markets Target Area 3: Smaller Cities Target Area 4: Rural Alabama
Key Points • The general picture of charitable giving in Alabama is one of responsibility, coupled with satisfaction. On the one hand, most of Alabama’s business leaders feel it is their responsibility to give back to the community and most are currently engaged in charitable giving. Furthermore, the vast majority of respondents give to local causes. On the other hand, for the most part, respondents seem pleased with the amount of giving and involvement of Alabama businesses and most do not predict increases in giving. • The majority of the respondents seemed to understand the tie between their business’s giving and strengthening communities. In fact, enhanced quality of life for the community is the strongest factor (on average) in the decision making processes. However, Alabama’s business leaders do not have as clear of an understanding concerning how their giving aids Alabama’s economic development.
Key Points • In general, smaller companies (those with less than 100 employees) were less engaged in charitable giving and less likely to believe that their giving helps improve Alabama’s economy and communities. Conversely, larger companies were more involved in charitable giving and seemed to have a better understanding that their contributions do help the state. • While respondents claim that altruism, especially “giving back to the community,” is the primary motivator for their business’s charitable giving, they recognize business interests, particularly generating goodwill within the community, as the primary benefits. Thus, while 15% of respondents said they are not looking for benefits when they give, the majority need to see that giving will benefit their business. • According to respondents, public recognition is one of the greatest benefits of charitable giving. Such recognition is particularly important for the larger companies in Alabama.
Key Points • Alabama businesses are likely going to require increased motivation for giving in the future, for while 41% of respondents said their business’s donations have increased over the past five years, just 24% said they expect their donations to increase in the next year. • However, among the respondents who had an opinion, 85% believe Alabama businesses are doing a good or excellent job in terms of charitable giving. Thus, it may be difficult to encourage businesses that increased giving is needed. Highlighting the link between giving and economic development may add another dimension by which companies measure the effectiveness of giving and may encourage them to increase their charitable donations.
Executive Summary:Motivations and Benefits of Charitable Giving Motivations • When respondents were asked what motivates their business to participate in charitable giving, most offered altruistic explanations, such as “to help needy people.” However, when respondents were asked what the benefits of charitable contributions are to their business, most offered benefits to the business, such as positive public relations, rather than altruistic benefits. • The overwhelming response for what motivates the respondents’ businesses to give charitably was to give back to and improve the community. There was a sense among participants that businesses have a responsibility to give back to the community that supports them. • Furthermore, many respondents noted that they are supporting their employees when they give back to the community, whether they are supporting specific causes in which their employees are interested or that they are simply improving the community in which their employees live. Some respondents noted that this boosts employee morale, but others said they believe it is simply their responsibility to give back to their employees.
Executive Summary:Motivations and Benefits of Charitable Giving Motivations (continued) • In terms of business motivations for charitable giving, respondents noted that contributing to the community gives the company a good name, which ultimately enhances opportunities for growth. • In fact, 72% of respondents said it is at least a little important that their business receive public credit and recognition for its charitable giving or community involvement. Interestingly, public recognition was most important in the smaller cities, and became more important as business size increased.
Executive Summary:Motivations and Benefits of Charitable Giving Benefits • According to the respondents, generating goodwill and a visible, positive reputation within the community are the primary benefits of charitable giving to their businesses. • Respondents also cited the benefits charitable giving yields in terms of their employees. They explained that contributing to the community not only increases morale and a familial atmosphere among their employees, but also, because of various improvements to the community, it generates a more educated and well-rounded pool of employees from which to hire. • While most respondents noted their desire to create a strong relationship with the community for increased business, 15% of participants said they are not looking for benefits when their business gives charitably and 15% said the benefit is community improvement.
Executive Summary:Charitable Giving Decision Making Process Influences • According to the respondents, the key influencer in deciding which causes to support is the enhanced quality of life for the community. Conversely, the least important influencer is what other companies are doing. • Notably, smaller companies are more influenced by the personal values of the owner/CEO than are the large companies. On the other hand, the larger companies are more strongly influenced by the community; they are more likely to be swayed by projects that can be seen as enhancing the quality of life of the community, investing in the community and increasing opportunities for economic development. They are also more strongly influenced by business citizenship and the potential for an enhanced quality of life for their employees. • Financial considerations, including profits, the economic climate and lack of funding, are the primary reasons respondents said they may not increase (or initiate) charitable giving.
Executive Summary:Charitable Giving Decision Making Process Parties with Input • Owners and managers have the most significant input in making charitable giving decisions. Conversely, designated committees have the least input. Encouraging Segments of Population • According to the respondents, community residents are slightly more encouraging than customers and business peers in terms of community involvement. However, in general, participants feel that each segment is somewhat encouraging.
Executive Summary:Perceived Effects of Charitable Giving Impact on Alabama’s Community and Economic Development • Half of the respondents (49%) strongly agreed that their business’s charitable giving helps the state of Alabama with community and economic development. • However, the majority of respondents were not able to articulate exactly why they believe their giving helps. The most common answer, among those who strongly or somewhat agreed that their giving helps the state, was rather generic—“benefits the community” (17%). Furthermore, 16% simply answered, “Don’t know.” • On the other hand, there were a few participants who had more specific ideas about how their giving helps Alabama. Respondents most often mentioned that giving enhances the state economy (11%), brings in new businesses/jobs (6%) and helps school funding (also 6%).
Executive Summary:Perceived Effects of Charitable Giving Impact on Alabama’s Community and Economic Development (continued) • Of the 49 respondents who did not strongly or somewhat agree that their business’s giving helps the state of Alabama, nearly one-third (29%) said they did not know why they did not agree. Others seemed to feel their donations were too small (those with less than 100 employees were more likely to disagree that their donations help the state) or noted that they give their money out of state. (Of note, 82% of the respondents give their money to local causes.) Perceptions of Alabama Business’s Efforts • Nearly half of the respondents (44%) believe Alabama businesses are doing an excellent or good job in terms of community involvement. On the other hand, 17% did not know enough to answer this question, and 39% said Alabama businesses are doing a poor or fair job.
Executive Summary:Charitable Giving Practices Charitable Programs/Activities • Of seven charitable programs, the most common among respondents’ businesses are community partnerships with non-profit organizations, schools, little leagues, etc (73%) and their employees serving on city, county or non-profit boards (66%). • In terms of formal company programs, 43% have a formal company giving program and just 14% have a company philanthropic foundation. • Approximately one quarter of businesses surveyed have a system for evaluating the effectiveness of their business’s charitable giving (27%) or to measure employees’ volunteer hours (26%).
Executive Summary: Charitable Giving Practices Types of Contributions • In terms of types of contributions, many of the businesses surveyed have programs in place that encourage their employees to become involved in charitable giving. Most commonly, 76% of businesses said they encourage their employees to volunteer and 62% said they have a payroll deduction program for contributions. • When asked about specific donation or sponsorship programs, respondents most often said their business sponsors scholarships or educational programs (73%) or donates cash directly to clubs, community foundations, etc (70%). • Most respondents (65%) said their company has never considered a community or private foundation as a means of giving.
Executive Summary: Charitable Giving Practices Trends in Giving • Respondents were not as positive concerning the future of their charitable giving as they were about past giving trends. While 41% said their charitable donations have increased over the past five years, just 24% said they expect their donations to increase in the next year. • In the last fiscal year, 36% of respondents’ companies donated less than $25k, 25% donated $25-$100k and 17% donated over $100k. (Twenty-four percent either did not know or did not divulge this information.)
Insight • “We are involved with causes undertaken by clients, which enhances public relations with our clients.” • “The main benefit is that it builds brand loyalty. We give back to the community and build a strong loyalty base.” • “We become better known in our community as a caring company, who cares about our community and its employees. The better known we are, the more support we generate for the things we need to do. For instance, if we have to go up on rates, we don’t get so much opposition from the community we serve.”
Insight “The goodwill of the community. Desire to be in the contributing part of the community.” “Good for employee morale. Employees who see their interests and needs being catered to feel more than just an employee to the company.” “To have a good name out in the community. I think employees are happier working for a company that gives charitably. It gives your company a good name.”
In an open-ended question, respondents were asked what motivates their business to be involved in the community. As the chart below shows, the most common answer was that the respondents believe they should give back to the community.
All of the answers given for the open-ended question that asked respondents what motivates their business to be involved in the community were grouped into two categories: altruistic (such as “help the needy”) and business (such as “creates goodwill”) interests. Clearly, participants were more inclined to respond that their business gives for altruistic rather than business reasons. (Totals can exceed 100% because this was a multi-response question.)
In an open-ended question, respondents were asked what the benefits of charitable contributions are to their business. Thirty-five percent of respondents noted the relationship and reputation that charitable contributions can create for them in the community.
The respondents’ answers to how charitable giving benefits their business were grouped in two categories: business (such as “advertisement for company”) and altruistic (such as “benefits youth”) interests. Interestingly, while most respondents said altruism motivates their business’s charitable giving, most said that business interests are the benefits of charitable giving.
When asked directly, 72% of the respondents said it is at least a little important that their business receive public credit and recognition for its charitable giving or community involvement.
The chart below shows, by size of company, the percentage of respondents who said it is somewhat or very important that their business received public credit for its charitable giving. Clearly, as company size increases, so does the importance of public recognition.
The chart below shows, by target area, the percentage of respondents who said it is very important that their business receive public credit for its charitable giving. Businesses in more rural areas are more likely to say it is very important that they receive public recognition, perhaps because they are not as often recognized.
Insight “We don’t see a return on anything. If you help those in need and see how they benefit from the company contributions, that’s satisfying in itself.” “Community involvement. Businesses don’t need to be just taken by the company, but also give back for the benefit of the community by giving to schools and churches.” “I think it’s our responsibility as leaders.” “To build a better feeling from the community about my business, so they would feel comfortable supporting me with business down the road.”
Respondents were read a list of factors that may influence their business’s decision to support different causes. The respondents then rated those factors on a scale of 1 (not a factor at all) to 5 (strong factor). The mean scores are shown on the graph below. According to the respondents, enhanced quality of life for the community has the strongest influence on charitable giving, while the example of other companies has the weakest influence.
Based on the list of factors that were read to them, respondents were also asked to name the most important factor that influences their decisions concerning charitable giving. The chart below reiterates that enhanced quality of life for the community is the most important factor.
Key Influencer Cross-Tabulations The factors considered in the charitable giving decision making processes were cross-tabulated by company size and target area, revealing the following: • Enhanced quality of life is a stronger influence with larger companies and with companies in the rural target area. It appears, then, that such companies feel greater responsibility for their communities than do larger companies in less rural areas. • An increased opportunity for economic development is a less important factor for mid-sized businesses than it is for smaller and larger businesses. • That charitable giving can be seen as a long term investment in the community and the interests of employees are less important factors to smaller businesses. • In the smaller cities (target area 3), the personal values of the owner/CEO are less likely to be a strong factor in the decision making process. On the other hand, the personal values of the owner/CEO are more likely to be a strong factor for companies with less than 100 employees.
Key Influencer Cross-Tabulations • In metro Birmingham, business citizenship is less likely to be a strong factor, while the condition of the business is more likely to be a strong factor. • On the other hand, business citizenship becomes a stronger factor for companies as company size increases. • The graphs on the following two slides illustrate these key differences.
The chart below represents cross-tabulations that revealed statistically significant differences in the charitable giving decision making by company size. Respondents rated each factor’s importance on a 1 (not a factor at all) to 5 (strong factor) scale. The percentage of respondents who gave a 4 or 5 rating are shown.
The chart below represents cross-tabulations that revealed statistically significant differences in charitable giving decision making by target area. Respondents rated each factor’s importance on a 1 (not a factor at all) to 5 (strong factor) scale. The percentage of respondents who gave a 4 or 5 rating are shown.
Respondents were asked to indicate, on a scale of 1 (Not Significant) to 5 (Very Significant), how significant the input of various parties is in making decisions concerning charitable giving. The mean scores are shown on the chart below. Clearly, the owners and management have the most significant input. The “other” persons mentioned by respondents as having input in charitable giving decisions were charitable organizations (5), corporate (3), the public (3), foundation (2), community leaders, BCA, board of directors, union and volunteers.
Respondents were asked to indicate, on a scale of 1 (Very Discouraging) to 5 (Very Encouraging) how encouraging various segments of the community may be in terms of charitable giving and community involvement. As the chart below shows, respondents seem to feel encouraged by most segments of the community. (The chart represents mean scores.)
Key Input/Encouragement Cross-Tabulations • In the most rural area, target area 4, the owner’s family is more likely to have a very significant input in charitable giving decisions. • Furthermore, as would be expected since the personal values of the owner are a strong influence in smaller companies, as business size decreases, the owner and owner’s family’s input becomes more significant, while a designated committee’s input becomes less significant. This dynamic is illustrated in the graph on the following slide. • Of note, in major markets other than Birmingham, business peers are less likely to be very encouraging. On the other hand, business in more rural areas (target areas 3 and 4) were more likely to find community residents to be encouraging. • Furthermore, companies with less than 100 employees were less likely to find business peers and community residents to be very encouraging, but more likely to find customers to be very encouraging.
The chart below represents cross-tabulations that reveal statistically significant differences in charitable giving decision making by business size. Clearly, the owner and owner’s family have a greater input among the smaller companies, while a designated committee has a stronger input among the larger companies.
In an open-ended question, respondents were asked what keeps their business from increasing (or initiating) its charitable contributions. As the chart below shows, financial considerations in general and profits specifically are clearly the primary determinants.
Insight “It’s good to help the whole community lift their economic status and keep them from depending on welfare. It also helps the citizen maintain his taxpayer status. By supporting a lot of these services, you sustain their independence…” “It helps the community grow. Our giving to the community is proportionate to our growth…” “The employees live in our community. It’s our first responsibility to them, but others need help, so we do it whenever we can.” “We feel that supporting the community is a benefit to the community in the long term and a benefit to the quality of life for our employees.”
Most respondents agreed that their business’s charitable giving helps the state of Alabama with community and economic development.
The chart below shows, by company size, the percentage of respondents who strongly agree that their business’s giving helps the state of Alabama. Clearly, as the number of employees increases, so does strong agreement that their contributions help the state.
The chart below shows the most common reasons respondents mentioned for why they agree that their business’s charitable giving helps the state of Alabama with community and economic development. The respondents’ answers reveal that many do not have specific ideas about how giving impacts development. (N=348)
The chart below shows all of the answers respondents gave for why they believe their giving helps the state of Alabama with community and economic development. They are grouped under category headings (shaded in gray).
The chart below shows the most common reasons respondents mentioned for why they disagree that their business’s charitable giving helps the state of Alabama with community and economic development. Nearly one-third of these respondents were unable to provide a reason. (N=49)
