Australian Businesses Go Beyond Giving

Australian business are not only more engaged than ever in giving to charity and not-for-profit organisations, they’re also increasingly focused on building community partnerships.  

The Giving Australia 2016 project, launched Thursday, includes the most comprehensive analysis of business giving ever conducted in the country.

It revealed companies were interested in long-term, formalised partnerships that could track social impact.

Wayne Burns, director at the Centre for Corporate Public Affairs, which conducted the business research element of the report, called the partnership finding “surprising”.

“Why that’s interesting is that community partnership is not very transactional, it actually takes a fair bit of management time and effort and involvement by the company to make a partnership with a not-for-profit organisation work,” Burns told Pro Bono Australia News.

“And most of the CEOs we talked to and senior managers managing those partnerships [said] there are agreed, formal outcomes wanted from that partnership, and that’s around social impact.”

He also said, for large businesses, community partnerships represented the “lion’s share” of giving.

In the 2015/16 financial year, large businesses, defined as employing more than 200 people, gave a total of $9 billion, $5 billion of which was allocated to partnerships.

Small to medium enterprises (SMEs), employing less than 200 people, gave a total of $8.5 billion in the same year, of which $1.5 billion was put into to community partnerships.

Lead researcher and director of Australian Centre for Philanthropy and Nonprofit Studies at Queensland University of Technology Associate Professor Wendy Scaife said this demonstrated a “maturity” in business giving, compared to the previous research from 2005.

“It’s been a teenager, and I think we’ve now got this maturity in the corporate giving marketplace, and of course it’s been driven by partnerships, it’s been driven by the type of relationship that we would see in a good individual giving scenario,” Scaife told Pro Bono Australia News.

“It’s longer term, it’s probably fewer partnerships than in the past. [Previously] people were giving 300 cheques of $300 to different organisations just to get coverage. Well of course you don’t see that these days.

“It is drilling down and building longer-term relationships and leveraging that and working together and understanding one another’s goals.”

Burns said the partnerships trend reflected the changing motivations for giving among businesses of all sizes.

“Doing good or doing the right thing is now the main driver of business giving in Australia,” he said.

“The second main driver is creating a social impact… they’re wanting to see their time, resources and money actually making a difference.

“The third issue is that they’re obviously looking for a business benefit, which is very different to lots of giving overseas. The main business benefit they’re looking for is engaging their employees, giving their employees another reason to come to work.

“And then the social license to operate which is the fourth main reason.”

He said the business drivers were different from 10 years ago, where companies, especially corporations, were focused on reputation, which is now less of a motivation.  

The project also found businesses were embedding their philanthropic activities into their strategy.

“Far more businesses than in 2005 really see giving as integral to their business strategy,” Burns said.

“And corporations especially embed it in business strategy. And if it’s embedded in business strategy it means it’s not a bolt on, and it also means it’s very unlikely to be discarded. If it’s in the strategy, if it’s in the balance sheet, it’s a lot more secure than it has been in the past.”

He said an important, and growing, aspect of this strategy was workplace giving and volunteering.

“Another really interesting aspect too is all businesses, small and large, participating in the research, indicated they’re spending more time and money on workplace volunteering in 2015/16,” he said.

“And they actually want to spend a lot more effort and money on workplace volunteering in the future. So it’s almost like workplace volunteering has a bullet on the Top 40, just in terms of rising up the charts there’s a lot of interest in what companies can be doing more, SMEs especially and corporations especially.”

Burns said there were two key drivers for the changing business approach – a generational shift and community expectation.

“There’s a whole cohort of small and medium enterprise owners and CEOs of big businesses that have grown up in societies where it’s just expected that business gives and that business plays a role in terms of corporate community investment. So that’s one thing, that has been a generational shift,” he said.

“The second is that community expectations have changed, it’s… damaging for organisations… if they don’t give.

“That combined to a situation where a lot of CEOs and small business owners are saying, ‘Well this is a part of doing business these days, this is what we do, this is like having good financial management or good human resource policies or trying to minimise environmental impact, the community expects it but it’s something that we want to do because we think it’s the right thing to do’.”

He also predicted that the trend of increased business focus on giving would grow.

“Where we see the trend going is that corporations have embedded giving, it’s core to strategy. We’re going to see that as core to small business and mid-tier company strategy in the future,” he said.

“We believe the quantum of giving will stabilise or increase, because most of the CEOs we talked to said they’re intending to spend more and not less.

“And where the money and the effort is going to be spent more is around corporate-community partnerships. We’re seeing a massive expansion of those.

“And also we’re going to see a big boost… to workplace volunteering. About 20 per cent of large organisations at the moment, say 20 per cent of their workforce is involved in workplace volunteering, now that’s an average. A lot of CEOs said they would like to get it up to around 40 to 45 per cent over the next five, six, seven years.”

Scaife said, in regards to the overall Giving Australia report, business giving was a “high five” moment.

“What we are seeing here is large business has come into its own,” she said.

“This has always been the myth, for people… for giving, where do you go for money – the top end of town, and of course it’s never been true because individuals have been a far better source [of donations]. I’m not convinced they’re not still, but large business is really giving a great deal in Australia.

“And of course it seems to be growing much faster than individual giving. And I say that with some trepidation because I don’t want individual giving not to grow, I’d like individual giving to outpace corporate because there’s more individuals, but anyway it is, that’s why I’m saying it seems to have come into its own.”

Burns said while the quantitative business giving statistics weren’t unexpected, he said it would provide important benchmarking data for future studies.   

“This is the first time that the department, the DSS [which funded the research], wanted a breakdown of what SMEs are giving, what mid-tier businesses are giving and what corporations are giving. So it gives us good benchmark data that we can really track overtime,” he said.

“It’s been hard to get hold and understand.”

In the 2015/16 financial year businesses in Australia gave $17.5 billion. Of that $8.5 billion came from SMEs, which represent around 99 per cent of all businesses in Australia, and about 80 per cent of SMEs donated.

Of the $9 billion given by large businesses, most of it was from corporations, defined as 1,000-plus employees, which gave $7.2 billion.

Burns said this was a substantial figure, given there are only around 2,0000 corporations in Australia.

Access the research here.