Charitable giving in the US insurance industry
In the survey of 22 companies, including insurers and brokers that represented over $200 billion in premiums, six results stood out:
- Industry support for collaborating to further a single cause has grown. Respondents’ support for industry collaboration on a single cause increased significantly (33 percent expressed support in 2019 compared to 17 percent in 2015). Those who didn’t explicitly support the industry working on a single cause expressed openness to collaboration for “causes that are business related.”
- The level of giving has remained consistent, with a focus on education, health and social services, and community. One key factor behind this finding is industry consolidation, which has lowered the number of companies engaged in corporate giving. Insurers are also orienting philanthropy more around volunteerism. As a result, industry-wide giving has held steady between $560 million and $600 million in cash, grants, and other donations since 2015.
- Companies more evenly value a balance of business needs, stakeholder interests, and community needs for their charitable programs. This year, 22 percent of respondents named each of these three factors as their top consideration. This alignment of business, stakeholder, and community needs facilitates a strategic approach to charitable giving. Specifically, insurers can merge their giving with their core business offerings, as when a P&C provider works on disaster relief. What’s more, respondents seem to plan their giving: 95 percent of respondents set their contribution budget periodically (often annually), and 87 percent give to preselected causes and charities.
- Measurement of the impact of charitable giving has increased. The share of respondents that use key performance indicators to evaluate the benefits of their philanthropic activities has increased from 26 percent in 2014 to 41 percent in 2019. More respondents are also interested in engaging third parties to measure the impact of their philanthropy.
- Millennials’ preferences have begun to influence charitable giving. Millennials prefer to work for companies that are involved in charitable causes, indicating a greater desire to make a social impact through their work compared with previous generations1. In addition, their tendency to share these values on social media, including by documenting volunteer work, may be factor in their preference for volunteering (over monetary giving).
- The CEO’s role in charitable giving is becoming less hands-on. Instead, the CEO is now focused on setting direction for giving programs and communicating efforts with internal stakeholders. Meanwhile, the leaders of charitable giving, such as chief giving officers and corporate foundation heads, are now the primary setters of strategy.
Key findings
Although charitable giving within insurance has remained steady since 2015, a greater share of respondents says that the industry’s charitable giving now meets the public’s expectations. Cash donations or grants continue to make up a bulk of giving, representing 65 percent of total funding. Among respondents who participated in both 2015 and 2019 surveys, company-organized employee volunteering increased from 0 percent in 2015 to 17 percent in 2019.
Health and social services, community, and education have continued to be the top causes for giving. Within these top three areas, contribution to community causes has increased (from 11 percent to 22 percent), while contribution to education has decreased (from 34 percent to 22 percent), and health or social services contribution has remained consistent.
Geographically, about 30 percent of respondents prioritize giving to communities where employees live and work and where significant business is already done. While the top three factors in determining focus of corporate giving have not changed since 2011, respondents’ focus on alignment toward business needs is up from 14 percent to 22 percent.
Goals for giving have also shifted from improving customer relations to building employee and leadership capabilities and skills—likely a reflection of millennial employees’ values.
Following millennial employees’ lead
Insurers are responding to social trends that center on personal passion and volunteerism, ideas championed by many millennials. Indeed, respondents have noted millennial preferences, such as a desire to work for companies that are involved in charitable causes, to support for philanthropic causes that relate to personal interests, and to volunteer instead of making monetary contributions.
Another sign of millennials employees’ influence could be the shift from improving customer relations toward goals related to building employee and leadership capabilities. Aside from making a social impact, 41 percent of respondents cited enhancing their corporate reputation or brand as the most important outcome of philanthropy.