A Realistic Approach to Reporting on the Impact of Corporate Philanthropy

Ninety-eight percent of companies report on their “inputs” (such as total charitable contributions), while 58 percent report on direct outputs (e.g., people served), according to The Conference Board analysis of how 100 leading companies report on their corporate citizenship and philanthropy efforts. Only 21 percent report on the societal outcomes and just 3 percent on the ROI to the company.

Insight for What’s Ahead: Companies should pursue reporting on societal outcomes—when the benefits outweigh the costs of doing so. Focusing on outcomes can improve the accountability, impact, and viability of corporate citizenship programs. But it can also divert resources from actually making an impact—and be beyond the capacity of nonprofits partners to measure. While companies should want to report on outcomes, they should do so selectively. 

It may be easier for companies to improve reporting on the ROI of corporate citizenship for the firm itself. As discussed in a recent report, corporate citizenship can drive shareholder value in six key ways, including employee engagement, brand reputation, and access to capital. As companies already have key performance indicators associated with these areas and much of the data is internally generated, capacity already exists for measuring and reporting on the internal ROI of corporate citizenship.