Corporate Giving – how do the FTSE 100 companies support good causes?

Earlier today, Charities Aid Foundation (CAF) released an interesting report looking at corporate giving, which explores both public perceptions of levels of corporate giving and the reality of how some of Britain’s best-known businesses use their resources to support good causes.

 

Corporate giving, for the purposes of the ‘Corporate Giving by the FTSE 100 report,’ is defined as “the total contribution by a company as calculated by the LBG model” and includes cash and in-kind donations, in addition to the monetary value of employee volunteering schemes and costs incurred by community investment programmes.

 

The headline long-term trend is that corporate giving has increased since 2007, although the generosity of corporates is not necessarily something that the public recognise. Even though in a typical year at least 98 of the FTSE 100 reported making a charitable donation, the average proportion of FTSE 100 companies that the public believe donate to charitable causes in a typical year is 36%.

 

Overall donations have risen at a faster rate than pre-tax profits, and more than twice as many FTSE 100 businesses have increased their donations as opposed to those decreasing theirs. However in 2012 there were still less than a quarter of companies giving away 1% or more of their pre-tax profits to good causes.

 

Even though many British companies do a great deal of good, there is potential for greater and improved corporate giving, and indeed this is something that the British public wants to see. Half of British adults say that they would be more likely to buy from a business if it donates to charitable causes, and this attitude permeates through to those seeking employment opportunities, with 45% saying that they would be more inclined to work for a business that gives.

 

Corporate giving also directly benefits the business itself; 87% of companies believe that it improve their organisation’s reputation and two-thirds noting a positive impact on customer engagement. However there is scepticism amongst the public about motives for corporate responsibility programmes, with 61% fearing that it is just a PR exercise for businesses. In order to counter this, the public want to see corporate social responsibility programmes that are community focused so that they can witness the benefits of corporate giving firsthand.

 

One of the problems that CAF encountered when compiling the data for this report was that companies report their charitable donations in different ways, which can make comparisons difficult. In addition, it is even less clear which causes corporates are choosing to support, or indeed what their motivations are. Given that, it’s no wonder that three-quarters of adults agree that businesses need to be more open about their charitable giving.

 

The report itself is well worth a read, as it contains a number of interesting facts. For example, did you know that it is corporates in the healthcare industry that are the most generous? And that the biggest ten corporate donors account for 69-75% of all donations made by the FTSE 100?

 

In the report, CAF calls for companies to instil a number of principles to maximise the reach of their corporate giving:

 

  • Integrate a clear social purpose into the core of their business and show how their charitable activity helps to deliver sustained positive outcomes
  • Follow a consistent framework, detailing what they have given, to whom and for what purpose
  • Measure and report impact to demonstrate the company’s engagement with, and commitment to, the cause and show the outcome of their giving
  • Increase their participation in employee giving schemes, and those already offering them need to improve awareness among their staff

 

Taken together, the adoption of these principles would help to further demonstrate to the public the value of social good of corporate giving. As CAF has focused on elsewhere, there is great benefit to businesses that give, who report greater loyalty and productivity from their staff. As there is greater scrutiny of business activities, one way that they can present a better image to the public is by going out of their way to support good causes, and hopefully the ideas contained within this report can play a part in that process.

Steve Clapperton

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