The UK’s largest listed companies donated the same amount last year as they did in 2016 despite their profits trebling in that time, according to new research.
A report published today estimates that the charity sector would have received an additional £3.74bn of funding from FTSE 100 firms if they had uplifted donations to match increased profits.
The report by the Charities Aid Foundation (CAF) shows that FTSE 100 firms gave £1.85bn to charities last year, compared to £2.51bn in 2013, showing a 26% fall over the past decade.
Given increases in inflation during this period, this represents an “even more dramatic cut to crucial charitable funding in real terms”, the report says.
Additional £3.7bn if donations uplifted
The report finds a quarter of top UK-listed companies donated at least 1% of pre-tax profits, and that GSK is the most generous, donating more than 5% of profits, while Shell gave 0.28% last year, six and half times less than they did in 2016.
It shows that the total amount donated in 2022 was the same as in 2016, when the analysis was last carried out, while the combined profits of the FTSE 100 have trebled over the same period.
CAF’s analysis states that if the companies in the FTSE 100 had continued to donate the same proportion of pre-tax profits that they did in 2016, the charity sector would have received an additional £3.74bn of funding.
‘More can and should be done’
Neil Heslop, chief executive of CAF, said: “The role of FTSE 100 businesses in leading a purposeful corporate culture is vital. It is brilliant that a quarter of the UK’s top hundred listed companies are setting an example by committing to the best practice of donating 1% to good causes.
“But more can and should be done, especially now as household incomes are squeezed and charity finances are strained due to the cost-of-living crisis.
“A resilient civil society requires charities, the private sector and government to all play a role. That is why we urgently need the government to draw up a national strategy on philanthropy and charitable giving to mobilise effort by businesses and all of us.”
The report also suggests there is demand from consumers and employees for action, with more than two-thirds of the public believing businesses have an obligation to support the local communities in which they operate.
The fourth edition of the CAF Corporate Giving by the FTSE 100 report looks at giving in 2022. It is the first report since 2018, which analysed 2016 data.
It is based on details of community investment and general philanthropy recorded in annual reports and in ESG reports.