Largest companies give less to charity despite record profits as annual donations fall below 2009 levels and 57% of SMEs say they haven’t even considered it
Giving by companies in the FTSE 100 is at a decade low as donations to charity drop to £1.69bn, equivalent to only 0.8% of profits. This is a dramatic fall particularly when inflation is taken into account. Back in 2009, these top UK businesses paid out £1.84bn in charitable donations, accounting for 1.7% of profits, according to the latest Charities Aid Foundation’s (CAF) annual corporate giving report.
When inflation is factored in the latest figure makes for grim reading. Had corporate donations moved in line with prices, the corporate giants could have given £3.03bn based on the Bank of England inflation calculator, a dramatic loss for charities.
CAF, which helps businesses and individuals give more impactfully, found that most companies in the wider businesses community do not give, despite employees and consumers wanting them to do more.
Only a quarter (27%) of UK businesses support charities in any way, with just 17% giving cash. However, two thirds of employees say they would like their employer to give to charity, and three quarters of consumers feel more favourable to businesses they can see doing good in their local areas.
For businesses that do not give to charity at all, only 18% said the main reason was because they did not have enough budget, but more than half (57%) said they had not considered it or did not see the benefit.
Mark Greer, managing director of the Charities Aid Foundation, said: ‘In 2009, when businesses were navigating a global financial crisis, they continued to give generously. Today it seems too many organisations, including many of the largest companies, are reducing budgets, withholding data or failing to recognise the role business can play in supporting society.
‘When leaders put giving on the agenda, it becomes part of business strategy, culture and long-term planning, rather than something considered only when circumstances allow.
‘Had every FTSE 100 company met best practice and donated 1% of profits last year, charities would have received around £1bn more in funding, contributing to a stronger society that benefits businesses and the people in them.’
The sharp decline in corporate charitable giving illustrates an urgent need for companies to rethink their approach, and there are examples of companies pulling their weight and making a tangible difference.
The proportion of companies giving to charities shows the stark divide between the largest businesses and SMEs in the CAF report. While 94% of FTSE 100 companies make charitable donations, this number falls sharply to 39% for those with turnover of £25m+, 34% for £5m-24.9m, and down to 26% for those with less than £5m.
Charitable giving in practice
BGC
For global financial services firm BGC Group, charitable giving is a critical part of the company culture and it donates a day’s revenue to its Charity Day each year.
Sean Windeatt, co-chief executive officer of BGC Group, said: ‘I know these are challenging times for many businesses. But the challenges are far greater for charities: when household budgets are squeezed, giving is one of the first things to go. When the public can’t give what they used to, business has a role to play in helping to fill that gap.
‘That doesn't have to mean simply writing a cheque. Give time, give skills, give a day. The companies that think creatively about giving are the ones whose people feel it most. We support charities our own employees choose, causes close to their hearts and their communities, and what comes back in pride and belonging is worth more than anything it costs.
‘We created Charity Day in memory of the 658 colleagues we lost on 9/11. More than two decades on, it has paid for wheelchairs, hospice care, medical research and community projects - real things, in real lives. That is not money lost to the business. It is an investment in the communities every business depends on and it is the day our firm is at its very best.’
Croner - Peninsula Group
At Croner, publishers of Business & Accountancy Daily, we have three charity partners through the Peninsula Group Foundation - Air Ambulances UK; DEBRA, the butterfly skin charity; and Together for Short Lives, the charity for children’s palliative care. The target is to raise £3m, a target the group is well on track for.
Throughout the year fundraising events are organised with staff from Croner and Peninsula climbing Mount Kilimanjaro last autumn, runners from our UK offices have been as far afield as Chicago, Berlin and Paris, and of course London, in the past year to run city marathons, and others have taken on the Air Ambulances UK Skydive. The next big events are the Manchester DEBRA Dragon Boat Race on 19 September, followed by the Three Peaks Challenge for Together for Short Lives at the beginning of October.
Alan Price, group chief operations officer of Peninsula Group Global, said: ‘Our Three Peaks team is training hard ahead of their challenge on 2 October. There’s some fantastic fundraising going on, 26 colleagues are taking part from across the Group, each having pledged to raise £950. With the company matching all money raised, if everyone hits their target, they’ll raise an incredible £49,400 for Together for Short Lives.’
The end of the year culminates in a worldwide fundraiser for the group. ‘We’re starting to think about our Global Day of Giving which will be on 1 December this year. It’s always a fantastic day with our charity partners coming to all offices and some global competition,’ Price said.
Centrica
When companies rethink their corporate culture and make charitable donations an integral part of the business strategy, it pulls together the whole business.
Chris O’Shea, group chief executive, Centrica, said: ‘If you want social impact to become part of your culture, embed it in everyday business. Set a clear ambition, connect with the needs of customers and communities, and give colleagues the time and freedom to contribute.
‘At Centrica, I’ve seen just how powerful this can be. When people, partnerships and purpose come together, individual actions become collective impact, helping us build a fairer future as we strive to create a greener one.’
Earlier this year, for example, Centrica gave £2.4m to expand The Multibank’s hubs and combine essential household goods and targeted energy support to help more households keep the heating on, and expand referral routes to the British Gas Energy Trust.
