The Charities Aid Foundation (CAF) is calling on the government to consider reinstating mandatory reporting on companies’ charitable contribution, as part of the move to encourage wider social responsibility in business, after research showed that total donations from FTSE 100 companies fell more than a quarter between 2013 and 2016
Its report found donations by the FTSE 100 have fallen year on year by 11% (£235m) since 2014 and 26% (£655m) since 2013, and were down to £1.9bn in 2016, the lowest level since 2009.
The number of companies donating at least 1% of pre-tax profits has also fallen, with only 26 companies having donated at least this amount in 2016. However, the overall combined FTSE 100 percentage of pre-tax profit donated has increased, and due to a handful of companies giving more, 2015 and 2016 were higher than any year since 2009 (up 2.6% and 2.4% respectively).
Pharmaceutical companies continue to lead charitable giving, with the basic materials and health care sector accounting for 55% of donations in 2016; however the decrease since 2015 is seen across six of the ten industries in the FTSE 100.
CAF wants the government to look into reinstating mandatory reporting on companies’ charitable contributions, as previously required in the Companies Act, saying it is critical that there is a benchmark which encourages companies to be transparent and accountable.
In view of the continuing fall in donations, CAF also wants the FTSE 100 consider a collective or industry specific contribution to maintain giving levels, especially in industries that traditionally tend to give less. It argues this would help shift public perception and improve businesses’ social impact, as well as demonstrating commitment to the UN sustainable development goals.
Corporate giving by the FTSE 100: Bigger impact through better business is here.
