Corporate Philanthropy Glossary of Terms

Catalytic Transformative Investments – A form of philanthropy that incubates and supports initiatives with the potential to drive large-scale change and meet complex social challenges. Such investments become catalysts for social and business innovation and change. It is one of three approaches in the Investment Portfolio Model of corporate philanthropy. The other two are Responsive Philanthropic Investments and Strategic Investments.

Charity – The donation of funds to a cause, usually an NGO, without a strategy or expectation of any return to the giver.

Community Involvement Strategy – The way in which the company seeks to contribute to the community and society through philanthropy and other forms of corporate engagement and contribution. This may range from charitable contributions to strategic investments designed to leverage a range of corporate assets and generate benefit for the company as well as the community.

Corporate Citizenship – A company’s approach to managing itself through positive social impact. The term is often equated with how a company helps society beyond its “fence line.” In this context, corporate philanthropy and community investment are often seen as the main expressions of a company’s corporate citizenship.

Corporate Foundation – A private foundation that derives its grantmaking funds primarily from the contributions of a profit-making business. A corporate foundation often maintain close ties with the donor company but is a separate legal organization, sometimes with its own endowment, and is subject to the same rules and regulations as other private foundations.

Corporate Giving Program – A grantmaking program established and administered within a profit-making company. Corporate giving programs do not have a separate endowment; their expenses are planned as part of the company's annual budgeting process and usually are funded with pre-tax income. These programs often include employee matching gifts and in-kind gifts as part of their grantmaking activities.

Corporate Philanthropy – The donation of corporate funds and resources to charitable and nonprofit organizations. It includes cash contributions, donations of products and services, volunteerism, and other business transactions to advance a cause, issue, or the work of a nonprofit organization. Corporate foundations and corporate giving programs traditionally play a major role in these areas.

Corporate Social Responsibility (CSR) – Like Corporate Citizenship, this refers to the approach a company takes to maximizing its positive impact on society. Often, however, the term CSR is associated with how a firm minimizes potential negative impact on stakeholders and safeguards the environment by integrating social and environmental concerns into its business operations and its interactions with stakeholders.

Creating Shared Value (CSV) – A business model that treats the competitiveness of a company and the health of its communities as mutually dependent. CSV acknowledges tradeoffs between short-term profitability and social or environmental goals, but focuses on the opportunities for competitive advantage by building a social value proposition into the corporate strategy.

Globalization – The process of international integration arising from the interchange of worldviews, products, ideas, and other cultural aspects. Advances in transportation and telecommunications infrastructure, including the rise of the Internet, are major drivers of globalization.

Impacts – A term used in logic and theory of change models and in program evaluation, this generally refers to the observed changes and benefits in society (social impact) or in the company (business impact) that result from these actions. For example, social impacts might include a reduction in the crime rate and business impacts might include increased customer loyalty. Also referred to as outcomes.

Inclusive Operating System for Philanthropic Investment – A general approach to philanthropy that includes more business assets than donation of funds. The Investment Portfolio model, mentioned below, is another way of nuancing this term.

In-Kind Donation Programs – Corporate giving programs that involve the contributions of goods or services other than cash grants. Examples of in-kind gifts include:

• Goods (computers, software, furniture, and office equipment)
• Services (meeting space, photocopy and mail services, and administrative/financial support)
• Expertise (legal, tax, or business advice; marketing and website development; and strategic planning)

Investment Portfolio Model – An approach to corporate citizenship designed to leverage a full range of business assets, including products, people, and brand, to create value and impact for both the company and society. This model contains three categories of investment—responsive, strategic, and catalytic—that build on one another to create an increasingly robust value equation as the giving program aligns with and engages other resources in the business to create greater impact and benefit for society.

Outcomes – A term used in logic and theory of change models and in program evaluation. This generally refers to the observed changes and benefits in society (social impact) or in the company (business impact) that result from these actions. For example, social impacts might include a reduction in the crime rate and business impacts might include increased customer loyalty. Also referred to as impacts.

Outputs – A term used in logic and theory of change models and in program evaluation. This generally refers to the specific behaviors and actions of the company for the purpose of impacting society, such as grant dollars or employee volunteer hours invested.

Responsive Philanthropic Investments – An approach to corporate philanthropy that provides broad-based, incremental support to myriad local causes and demonstrates to employees, customers, and other stakeholders that a company is compassionate, caring, and responsive. It is one of the three approaches in the Investment Portfolio model of corporate philanthropy. The other two are Strategic Investments and Catalytic Transformative Investments.

Return on Investment (ROI) – A performance measure used to evaluate the efficiency of an investment in generating financial return. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or ratio.

Self-Dealing – Prohibited financial transactions between a private foundation (including corporate foundations) and those in a position of influence over a private foundation, such as the sponsoring corporation. The goal is to ensure that the foundation uses charitable dollars appropriately.

Social Impact Bond – A contract whereby government agencies define an outcome they want to accomplish and agree to pay an external organization a sum of money if a specific outcome is achieved. This results in improved social outcomes and government savings.

Social Return on Investment (SROI) – A performance measure used to evaluate the efficiency of an investment to generate societal benefits, as opposed to the financial benefits measured by ROI. In its pure form, SROI monetizes investment (such as grants or costs of the volunteer hours) and impact (such as the value of graduating from high school) to generate a percentage or ratio, similar to ROI.

Stakeholder – A person, group, organization, member, or system that can affect or be affected by a company’s actions.

Strategic Investments – Philanthropic investments that are actively managed to achieve results that directly align with the company’s business interests. This is one of the three approaches in the Investment Portfolio model of corporate philanthropy. The other two are Responsive Philanthropic Investments and Catalytic Transformative Investments.