Economy
FTSE 100 double charitable donations since recession
Since the start of the recession the UK’s biggest companies have almost doubled their donations to charities, according to the Charities Aid Foundation (CAF). However, research also shows that whilst companies are taking philanthropic steps, many are not communicating their work with the public.
The report – Corporate Giving by the FTSE 100 – shows that the FTSE 100 gave £2.5 billion to good causes in 2012, a £1.2 billion increase when compared to 2007, despite an economically turbulent period. Donations made by these companies are increasing at a faster pace than their pre-tax profits and the average donation by the FTSE 100 was £3 million in 2012.
Despite the impressive donations the public remain largely unaware of this good work. In a survey consumers estimated that just over a third of FTSE 100 companies made charitable donations each year. In reality 98% do.
The public also believe that consumer services and consumer goods are the sectors that are the most generous, when they actually rank fifth and sixth, suggesting these industries are better at communicating their charitable efforts. Instead healthcare and basic material companies donate a bigger portion of their revenue.
Improved communication of charitable donations could have economic benefits. Some 69% of those surveyed believe businesses have an obligation to support the local community in which they operate, whilst 44% believe they have an obligation to donate to charitable causes. The findings suggest that consumers place value on philanthropy, and this is particularly true for younger generations.
In order to address low public awareness, CAF is calling for a more consistent way for companies to report and measure their giving. This would make it clearer about what they are donating and give companies an opportunity to be more vocal about their charitable work. The organisation also states that firms should consider integrating a clear social purpose into their core business.
John Low, chief executive of the CAF, said, “The way businesses work with charities and their local communities is becoming increasingly important, especially as younger generations are influenced more and more by the way in which they operate.
“I often hear stories that hopeful graduate look into the charitable work of a company directly after browsing the job pages – this is becoming an increasingly important factor when it comes to career choices.”
He continued that whilst a growing number of brands are putting their ethical aims and values at the heart of their businesses, they should now become more transparent and vocal about their operations.
“Why not shout louder about the remarkable growth in corporate charitable giving in spite of difficult economic conditions?” Low said. “This will begin to restore public trust in businesses after so many setbacks.”
The CAF has previously urged UK businesses to place charity and philanthropy at the heart of company cultures, stating that they could benefit economically as a result. The latest report suggests that many businesses are taking action to do this and see the advantages of such action.
Photo: 401(K) 2012 via Flickr
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