Charitable giving by the UK’s 100 biggest companies almost doubled to £2.5bn in the five years to 2012, but less than a quarter of the corporates are donating one per cent or more of their pre-tax profits, new research by the Charities Aid Foundation shows.
The report, Corporate Giving by the FTSE 100, published today, says the high levels of giving are being maintained by a small number of companies.
CAF also calls for a more consistent way for companies to report and measure their giving. It says that some corporates value their donations at a significantly higher rate than others by using wholesale or retail price, rather than cost price, in valuing their in-kind gifts.
Models for reporting charitable donations have been developed, including by the London Benchmarking Group, a body which assesses best practice in corporate social responsibility, but they have not been universally adopted, the report says.
Researchers analysed the financial accounts submitted by FTSE 100 companies between 2007 and 2012, finding that giving increased from £1.3bn to £2.5bn over the period. There was a net increase of 36 companies who donated more in 2012 compared to what they gave in 2007, in real terms.
The average donation has increased at a faster rate than pre-tax profits, with the median gift trebling from £1m in 2007 to £3m in 2012, the report shows.
But the report highlights a mismatch between the public’s perception of giving by companies and the reality.
A survey by ComRes, commissioned by CAF, polled 2,066 UK adults in March this year about their perceptions of giving by the 100 biggest companies.
People think that 36 per cent of the FTSE 100 donate to charity every year, but 98 per cent of them give.
The report says “inconsistent and selective reporting is undoubtedly fuelling misperception”, and the poll shows 73 per cent of people think companies should be more open and transparent about their corporate responsibility.
It finds people are misinformed about which companies do the most for charity, which is down to the high brand profile of consumer-facing businesses that in many case have very visible fundraising activity. But these activities are largely driven by employee and/or customer donations, rather than being given by the company itself, it says.
The survey shows 51 per cent of people thought consumer services firms gave the most to charity, but such companies fall middle of the table of actual donations. The basic materials industry was ranked bottom of the giving table by the public, but actually gave the second greatest amount over the six years, £2.3bn. Healthcare was top, giving £4.6bn over the period.
CAF’s poll shows that 65 per cent of 18-24 years olds are more likely to buy a product or service from a company that donates to charity, compared to 51 per cent of all age groups.
The survey shows that 61 per cent of people think corporate responsibility is just a PR exercise and 69 per cent think companies have an obligation to support the local community in which they operate.
John Low, chief executive of 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 graduates look into the charitable work of a company directly after browsing the jobs pages – this is becoming an increasingly important factor when it comes to career choices.
“We’ve seen a growing number of brands putting their ethical aims and values at the heart of their businesses, and many have been hugely successful, particularly among a younger age group.
“We now need all companies to be more transparent and vocal about the great work they’re already doing for charities across the country. Why not shout louder about the remarkable growth in corporate charitable giving in spite of difficult economic conditions.
“This will begin to restore public trust in businesses after so many setbacks.”
