Council on Foundations Study Shows Company Philanthropy Boosts Loyalty

Council on Foundations Study Shows Company Philanthropy Boosts Loyalty

According to a new survey sponsored by the Council on Foundations and conducted by Walker Information, favorable perceptions of a company's philanthropy are a significant factor in driving the behavioral loyalty of its shareholders, employees, and customers.

Using a metric called the Corporate Philanthropy Index (CPI), the 2001 National Philanthropy Benchmark Study categorized its respondents into two groups — High CPI and Low CPI — based on whether they perceived a company's philanthropy favorably or unfavorably. Among shareholder respondents in the High CPI group, 63 percent said they were "truly loyal," meaning they would continue to invest in the company and recommend it to others as an investment, compared with only 25 percent in the Low CPI group. Similarly, 40 percent of High CPI employees were rated "truly loyal," meaning they felt positively toward the company and planned to stay, compared with only 10 percent of Low CPI employees. And among customer respondents, 46 percent of the High CPI group were classified as "truly loyal," meaning they planned to continue to do business with the company, compared with only 15 percent of the Low CPI group. The study also showed that the involvement of CEOs and senior executives is a key factor in shaping shareholders' opinions about a company's philanthropic activities.

"As more and more companies are giving back to the community they also are learning that they can leverage their good deeds to build loyalty and appreciation by shareholders," said COF president and CEO Dorothy S. Ridings.

For more information about the study, visit: http://www.measuringphilanthropy.com/.

"Companies that Invest in the Community Profit from Shareholder Loyalty." Council on Foundations Press Release 05/17/2002.