Effective Philanthropy - Corporate Giving Drops

Australian corporate support for community causes is heartening but according to a new report there are signs that out leading companies are retreating!

Australia’s second Effective Philanthropy Report reveals an 8% fall in top company giving to the community. The report was prepared by Corporate Good Works, a leading independent consultancy set up to help companies find and manage community relationships.

Corporate Good Works is jointly headed by Wendy McCarthy AO, a leading Australian businesswoman, educator and author, and Brian Babington, an expert in community development programs and high-level corporate management.

Australia’s top 100 public companies voluntarily donated around $112 million in 2001/2002 to community programs compared with $121 million in the previous year – a fall of 8%.

On average, the ‘top 100’ devoted just over 0.6 cents in every post-tax dollar profit to community causes. The level of giving would be considerably less if based on pre-tax revenues.

The report shows that the big spenders were the top 25 companies, which spent approximately $91 million on community programs. Compared with $98 million in 2000/01, this was a fall of 7%.

The other 75 companies spent $21 million, or 9% less than the previous year ($23 million).

The top 10 companies – BHP Billiton, Telstra, Commonwealth Bank, Westpac, ANZ Bank, National Australia Bank, Woodside, Fosters, Woolworths and Rio Tinto – spent almost $64 million in 2001/02; they accounted for almost 60% of total funds given by the top 100 to community social and environmental causes.

As in the previous year, in 2001/02, 45 of the top 100 companies either do not appear to support community causes or do not publicly report on them.

The report says while there have been modest gains, the effectiveness of corporate philanthropy is still in doubt as transparency and evidence of good planning and governance are still lacking.

The report says many excellent corporate-community relationships were noted, particularly amongst Australia’s top 10 companies which ere increasingly taking a results-based and strategic approach to community programs.

In the area of transparency, the top ten are still performing well but the report says the rest need to lift their game.

Most companies in this group made detailed statements in their Annual Report about community partnerships detailing the amount donated, the recipients and some information about program outcomes.

Yet, overall, no discernible progress was made in terms of greater corporate disclosure about community giving by the majority of other companies in the top 100.

As was the case in 2000/01, 31 of the top 100 companies either partially or fully disclosed (in Annual Reports or other public information available on the Internet) the amount of funding for the community organisations which they supported.

The other 24 companies which gave to the community either did not specify which organisations they supported or did not state the level of donation.

The report stresses that there is still a long way to go yet in the area of evaluation and governance – As in 2000/01, only four of the 55 companies with programs indicated publicly that they evaluated their community programs.

Reporting on the governance of community programs by the companies was also significantly absent. Only a handful of participating companies stated publicly how they managed their programs, for example, through the operation of a specifically established company Fund, Foundation or Trust.

Babington and McCarthy concluded that continuing global economic volatility is likely to mean that leading Australian companies will remain cautious about committing themselves to expanded community programs at least in the short term.

As a result they say better-organised and resourced charities are likely to fare better than smaller organisations, although the heightened challenge for all is demonstrating value for money and sustainability as a partner to prospective corporate clients.