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FTSE 100 charitable donations continue to fall, with a few worthy exceptions

Jan 30th 2018

Corporate giving by the FTSE 100 took another tumble last year, according to the Charities Aid Foundation latest study. yet  the same report finds almost half the UK population think businesses have an obligation to support charitable causes.

The report found that total donations in absolute terms by the FTSE 100 have continued to fall year on year, to a total of £1.9 billion in 2016. This is down by 11% (£235 million) since 2014 and by 26% (£655 million) since 2013.

Klara Kozlov, Head of Corporate Clients at Charities Aid Foundation, said: “The downward trajectory for corporate giving continues, with fewer companies replenishing a depleted pool of money donated to charitable causes.

“This is certainly a concern for charities. It is vital that civil society can work with businesses to show how partnership between charities and business can benefit both, as well as greatly enriching society.

“We believe company giving, both financial and non-financial, is vital. It helps to deliver positive impact and enables the convergence of interests between business and society and, by doing so, fosters integrity and bolsters trust.”

With a handful of companies giving more, according to the survey, the overall combined FTSE 100 percentage of pre-tax profit donated has increased. The average (median) donation value has also risen to £5m. This highlights that the FTSE 100 relies on a handful of generous corporate donations, while at the same time, suggests that the vast amount of organisations in the FTSE 100 continue to donate at similar levels to previous years.

CAF’s research comes hot on the heels of BlackRock chief executive Larry Fink’s call for global companies, including FTSE 100 members, to make a ‘positive contribution to society’.

The study of FTSE 100 corporate giving features a review of charitable giving, based on a survey of 1004 adults carried out by YouGov for CAF. Almost half those surveyed (48%) agreed that ‘businesses have an obligation to support charitable causes’.

Many companies are already choosing to demonstrate how charitable giving plays a vital role in developing purpose, building trust, encouraging employee engagement, enhancing corporate reputation and delivering critical social value.

Pharmaceutical companies continued to dominate charitable giving, with basic materials and health care companies (of which pharmaceuticals is part) accounting for 55% of donations in 2016. This is at odds with the general public’s perception. CAF’s research found that 37% of people surveyed think consumer services lead the way for donations, while 19% think consumer goods companies do. Actually between them they account for 18% of total donations by FTSE 100 companies.

A change in legislation in 2013 means companies no longer had to report their corporate donations, undermining efforts to make corporate giving open and transparent says CAF. A total of 15 FTSE 100 companies chose not to specify their corporate donations for the 2015/16 financial year and any donations they made are therefore not included in the report. 

CAF says companies choosing not to report their giving could be missing an opportunity to positively engage consumers. CAF’s survey found that more than half (56%) agreed that they would be more inclined to buy a product or services from a business that donates to charitable causes.

Download the report for free here

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