While companies are quick to blame tough economic conditions on reduced giving, increased profits do not lead to increased charitable giving, nor to other kinds of charity support, according to new research.

An annual study of 550 companies with CSR programmes by the Directory for Social Change uncovered a substantial increase in year-on-year pre-tax profits of 55 per cent to £245.8bn, however charitable giving fell over the same period from those same companies.

Total cash giving by these 550 companies amounted to £470m, down 9 per cent on the previous year, while the total value of community contributions plummeted by more than a quarter (27 per cent) to £600m. The study, released today, tracks the essentially the same 550 companies each year, and the current report relates to the most recent company accounts available – ranging from 2010/11 to 2011/12.

While some companies, such as Avon, Spare and Richer Sounds, gave more than 10 per cent of their profits to charity, across the board the average value of cash donations to charity stood at 0.19 per cent.

Author of the report Denise Lillya said that the findings of the study challenge the widely held belief that companies are placing increased emphasis in non-financial contributions to charities, because both cash and non-financial contributions have fallen.

“There is a discernable narrative developing within policy circles around the notion that ‘traditional’ corporate giving of cash and in-kind is on the way out, with more companies moving towards partnerships and relationships with voluntary sector organisations based on shared social objectives,” she said.

Lillya argued that the research showed that this was not happening, and that charities don’t want that kind of support anyway.

“For many charities, cash will be the best tool for the job, and for many companies cash will be the most available and appropriate resource to meet what they see as their social obligations. Cash and in-kind giving from companies remain a crucial part of the funding environment for charities,” she said. “Far from being on the way out, it has huge potential for growth.” 

These findings loosely corrolate with those in Fundraising magazine's Corporate Partnerships Survey 2012, a survey of charities about 'charity of the year partnerships', which found no major spike in company interest in volunteering, and relative stability in the number of corporate partnerships with include cash donations was generally stable.