Giving and Getting in America

02/22/2017 11:01 am ET Updated Feb 26, 2017

There is a philanthropic gene in Americans. They tend to give, almost instinctively, of their time, money, education, and experience. And not just to people they know. Historically, when there is a catastrophe or tragedy anywhere else in the world, the U.S. is usually the first to respond with aid. There are also countless foundations, charities, trusts, religious missions, and NGOs that exist in our country simply to assist the less fortunate, and, of course, great social causes.

And in recent years, companies have gotten considerably more involved in giving.

The initiative in the business world has become widely known as Corporate Social Responsibility (CSR), and the notion is that brands will do well if they also do good. The profit rationale makes it hard to argue this is simply business altruism, but regardless of motivation, there are wider benefits. National and local charities and philanthropic causes can engage corporate sponsors to make their efforts more productive and increase fund raising, which also extends the reputation and image of a brand.

But there is another cultural change around charity that might be even more important.

“My belief is that we all have an impulse to give and help,” said Leo Ramirez, Jr., CEO, chairman, and founder of Austin, Texas-based Encast (www.encast.gives), a charitable giving technology. “I have seen this constantly in my personal life and business career. My conviction as an entrepreneur has been that we need an improved infrastructure for individuals to exercise their charitable inclinations, which will have a profound impact on philanthropy. The idea that giving is a by-product of great financial wealth is outdated.”

<em>Leo Ramirez, Jr., Encast, CEO </em>
Leo Ramirez, Jr., Encast, CEO

Ramirez says he started his company to empower charitable giving by individuals, through their everyday lives. Companies like Your Cause, Benevity, and Cause Cast have also recognized that philanthropy ought to be more broadly democratized, and they share an increasingly common belief that more charitable causes need to partake of American generosity. In fact, an estimated 94 percent of all $372 billion dollars given annually end up in the accounts of only about 5 percent of non-profits.

The good news, however, is that giving continues to increase in the post 2008 recession years, and the majority of donations come from individuals. According to Giving U.S.A., in the most recent two years measured from 2013 to 2015, cumulative charitable giving from individuals rose by 7.3 percent in inflation adjusted dollars.

“Each year, gifts of $100 million or more play a significant role for some individual donors and many different types of charities, and they do affect the numbers. However, Americans’ collective generosity would still be enormous even without those jaw-dropping gifts,” said Patrick M. Rooney, Ph.D., associate dean for academic affairs at the Indiana University Lilly Family School of Philanthropy. “Philanthropy is quite democratic and always has been—more people give than vote in the U.S.—and $20, $10 and $1 gifts do make a cumulative difference.”

Charitable giving also has a significant impact on businesses. For example, a May 2016 Gallup report indicates job turnover by millennial workers costs the economy $30 billion annually. The study concludes that millennials appear to want more for themselves and can seem disengaged but “they just want a job that feels worthwhile and they will keep looking until they find it.” In fact, 83 percent of those millennials, who have a reputation as job hoppers, say they would stay put if they felt their work had more meaning than just a paycheck. Effective CSR giving programs can provide employees with a deepened connection to their jobs and co-workers.

“Most business managers probably aren’t aware that CSR programs can have a dramatic positive change on ROI,” said Ramirez of Encast. “Productivity increases by an average of 13 percent, which like getting 6.5 free weeks of additional work from an employee, customer conversions go up, brand loyalty is stronger, and revenue can grow twenty percent. Providing employees technological platforms to donate has just become smart business.”

Turning giving into a lifestyle, offering payroll deductions for charitable causes, tools to track volunteer hours, and a range of choices based upon donor interests, promises to democratize philanthropy. And as individuals are more engaged on a regular basis with a lifestyle of giving, the impact of social good is likely to be profound.

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