Are charitable corporations happier? One would think so. After all, many studies (this one by the Harvard Business School) prove that happier people give more and giving makes people happy. Many companies match employee gifts to charities and higher education programs and they also often lead corporate initiatives or giving drives to donate to local or national organizations. But what do the numbers say? For this little study I used information from CareerBliss’ 50 Happiest Companies for 2012 list (scroll to bottom for their Methodology) as well as Philanthropy.com’s 2012 list of How America’s Biggest Companies Give.
According to Charity Navigator, corporations accounted for just 6% of the $316 billion of total giving in 2012. This is not a very high percentage, considering individuals gave 72% of that total, but it was a 12.2% increase from 2011. Despite the low standards, there are a few standout corporations that give a large percent of their income to charities annually. Wells Fargo, Walmart, Chevron, Goldman Sachs and Exxon Mobile were the top 5 largest donors in 2o12, the year for which the most current information on corporate giving is available. This isn’t surprising however when you look at which companies had the highest revenue in 2012. According to a 2012 Forbes report, each of these companies, aside from Goldman Sachs, was in the top 10 list for highest revenues as well.
All this aside, when comparing the top 50 charitable companies in 2012 with the happiest companies, we do see an overlap of nine companies, as evidenced below. This comes out to a 18% (9/50). One caveat however, the CareerBliss list is comprised of public and private corporations while the Philanthropy.com list only looks at public companies. Therefore, the percentage may actually be higher if the CareerBliss list only included public companies.
Using these nine overlapping companies, I looked to see if there was a strong correlation in percent of pre-tax income gifted vs. the companies happiness score. As you can see below, there isn’t one. This may be due to the fact that almost all of these companies (aside from Morgan Stanley) had approximately the same giving rate, 1.78%. Their happiness score did not increase in connection with their giving rate. In fact, as you can see in the second table, there isn’t really any correlation at all in their respective category rankings either. Side note: Despite giving a larger nominal amount, corporations (at least those used in this study) paled in comparison to individuals when it comes to a percent of income donated annually. According to Charity Navigator, the average American gives 4.7% of their income to charity. The average for the top 50 charitable corporations in 2012, 1.61%. As for Morgan Stanley’s 9.01% charitable rate? That’s just a fluke in their annual income before taxes yearly trend where they saw a huge (92%) drop in income before taxes due to poor performance connected to the European recession in 2012.
So what can we take away from this? There’s some correlation, but perhaps not enough to suggest that all happy companies are charitable or all charitable companies are happy.