Forging new frontiers
Corporate philanthropy in Australia has continued to grow, achieving a record $1.16 billion total this year on the back of increased contributions from industry sectors that defied the economic impact of the COVID-19 pandemic.
This article appeared on Philanthropy Australia website on December 3rd. Written by Nick Richardson
The 2021 GivingLarge report confirms the trend in increased giving that was captured in last year’s report has been sustained. It also highlights an emerging trend that the report describes as “the new frontier of corporate philanthropy’’: the giving for social good exemplified by companies that include Who Gives A Crap, Atlassian and Cotton On.
Jarrod Miles, report author and co-founder and Research Director of Strive Philanthropy, said it was time to embrace the growth in corporate philanthropy, that was up four per cent on last year’s figure.
“Alongside the record-breaking numbers over the last few years, there is an exciting ground swell of corporate engagement and new age innovation that has well and truly arrived,’’ he said. “We now have a remarkable opportunity to invest more time and effort into understanding and supporting this welcome turn of events.’’
The report, which is supported by Philanthropy Australia, surveyed the top 50 companies who clearly disclosed a community investment figure. It found that although COVID lockdowns led to a reduction in corporate volunteering or pro bono services, corporates responded with investments of products and cash.
The record overall giving total was driven largely through companies in the finance and materials sector, which made up 60 per cent of the overall giving identified in the report. Both industries recorded a growth in profits of more than 40 per cent, underlining their capacity to be less impacted by the pandemic.
The leading companies, based on total contributions, included BHP, Coles, CSL, Rio Tinto and the Commonwealth Bank. BHP contributed the largest dollar amount – $221 million – and it retains its one per cent target of pre-tax profit being given to social investment, which was established in 2001.
There is a broader movement, called Pledge 1 per cent – also supported by Philanthropy Australia – that aims to encourage and challenge companies to pledge 1 per cent of equity, product, and employee time to their communities. It has numerous high-profile corporates behind it, including Salesforce, Atlassian, Rally and Yelp.
While this year’s GivingLarge report notes that there were hundreds of beneficiaries from corporate philanthropy, 70 per cent of the nominated cause areas were within health, education, and social and public welfare sectors.
While the growth is a welcome development, the motivations behind the increase are not clear cut – whether it’s driven by boardroom altruism or a response to stakeholders’ wishes.
“I think it’s both,’’ Jarrod said. “And I think this adds to the value proposition. It’s not just appealing for altruistic decision makers. It also has value for those focussed more on company returns and profits.’’
“Leaving us with a neat reality that fulfils our hearts and minds. Meaningful social investment will not only support the countless charities and community organisations in need but also appeal to other important corporate stakeholders who are calling for meaningful social impact from the companies they work for or do business with,’’ Jarrod said.
The overall picture reveals that corporate philanthropy is prepared to maintain its community contributions regardless of any broader economic difficulties. That outcome points to companies embedding their commitments to ensure there is a sustainable funding flow to the community sector.
Flowing on from that, is what the report called “organisational agility’’ that was characterised by companies identifying the most appropriate resources they could offer in the face of the COVID-19 challenges. “Fundraisers should look to learn from this and ask what resources these corporates have available at this time,’’ the report said.
The report also asks the question: “Could it be that in the future companies won’t be as likely to be successful without an integrated promise of social good?’’ The emergence of corporate philanthropy that reflects the combined priorities of a commitment to social good with financial goals could spark a broader change from Australia’s larger corporates that affirm the value of social investment, not just to corporates but also consumers, employees, and shareholders.
The report identified Who Gives A Crap, Atlassian and Cotton On leading as the way, “new age firms, innovating their approach to giving, weaving social impact into their DNA and giving away significant portions of their profits to the community.’’
The report canvasses data from the top 50 Australian companies who have reported their community contribution. Overall disclosures were also up, with 70 per cent of ASX companies providing figures about their contributions in their annual reporting documents, pointing to an increased importance of corporate philanthropy for many of these companies.
But despite the quality of available data, Jarrod said there was still much to uncover.
“There is an estimated $4 billion making its way from the business sector to the community and we know very little about it,’’ he said.
“More work needs to be done to understand this significant transfer of funds with a focus on ensuring that the parameters being measured correlate with the intended change and impact sought.’’[/vc_column_text][/vc_column][/vc_row]