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Government changes mean companies won’t have to report on charitable giving

Government changes mean companies won’t have to report on charitable giving
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Government changes mean companies won’t have to report on charitable giving

Fundraising | Celina Ribeiro | 22 Jul 2013

The government is to remove regulations which require some companies to report on their charitable donations, arguing that such reportage is a burden and does not improve giving levels.

Regulations within the Companies Act 2006 which ask that companies declare charitable donations worth more than £2,000 are to be dropped following a motion passed in the House of Lords last week. The Directory of Social Change, which compiles annual data on company giving, has blasted the move, arguing that stronger – not less – company reporting on giving is necessary.

Putting forward the motion, Viscount Younger of Leckie, said: “While we encourage companies to engage in philanthropy, we have no evidence that this disclosure affects charitable giving while the disclosure itself has become burdensome to business.”

Pressed on what exactly was burdensome about the reportage, the Conservative peer said that companies will still outline their total charitable donations, but reporting on each donation, to which charity and for which purpose, was onerous for companies which practise a lot of philanthropy.

Contrary to BIS consultation on corporate reporting

The development would appear at odds with a consultation put forward by the Department for Business, Innovation and Skills just a few weeks ago which asked for thoughts on how companies can be encouraged to report more accurately on their giving, and how to encourage more corporate philanthropy. The BIS document went so far as to suggest a standardised form of reportage for corporate social responsibility.

The changes to the Companies Act 2006 report come into effect on 1 October, soon after the deadline for submissions to the BIS consultation and before the Department is expected to report.

Jay Kennedy, DSC director of policy and research, heavily criticised the removal of the Companies Act regulations.

“Yet again we see our government acting in the interests of big business and not the public interest,” he said.

“The information available at present is paltry and generally appallingly presented – we know because we have been researching it for 25 years. The widespread lack of transparency and rigour already makes it difficult to get an accurate and robust picture of what companies do to meet their social responsibilities.

“The coalition is choosing to further obscure the picture, not make it clearer.” 

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