Overall Scope
GivingLarge research focusses on Australia’s top companies, publishing their giving statistics by sector and reviewing some key community investment parameters such as:
- Contribution as a % of Profit or Earnings (rolling 3 year average)
- Total Community Contribution as a Dollar Value
- Standardisation, Assurance and Comprehensiveness of Reporting
- Primary Causes selected by each company
Eligible community contributions adhered to global standards such as London Benchmarking Group (LBG) developed by Corporate Citizenship (membership not mandatory) and/or standards following the the Global Reporting Initiative G4 (GRI)^.
The GivingLarge research and associated report have adopted aligned elements of the LBG framework and the GRI standards on corporate community investment. Our analysis not only reviewed which companies are adhering to these important standards but also sought alignment from those companies who did not formally disclose their adherence.
What’s included?
- Cash
- Time
- In-kind contributions of product, property or services (incl. Pro Bono)
- Management costs: program costs, staff salaries, benefits/overhead and research and communications.
What’s not included?
- Leverage*
- Foregone Revenue^
- Political Donations
- Commercial Sponsorships (eg. professional sporting team).
Let’s Talk Percentage
Reporting absolute dollar contribution is rarely useful when it comes to community investment. Companies differ in size and profit margins meaning that companies with higher profits are able to contribute more total dollars to the community in which they operate. Converting dollar values into relative percentages of company profits is one way to enable comparisons and ensures a more meaningful review of giving.
In line with global methodology, profit used in our research is pre-tax and earnings are before interest, tax, depreciation & amortisation (EBITDA). In this research a company’s community contribution as a % of earnings or profit is published as a rolling 3 year average.
Third Party Assurance
Independent assessment of an organization’s reported community investment is imperative to ensure accurate and reliable claims about a company’s generosity and community impact. An important part of our analysis was to identify which companies engaged in third party assurance. Third party assurers act to ensure that the preparation and presentation of a company’s sustainability report is in accordance with the agreed upon standard or company definition and in the case of limited assurance (which the majority of our sample utilised), that no amendments are required to meet these standards.
Comparing Apples with Apples
As different companies may define profits in different ways, it is important to ensure that the same things are being compared across companies. For example, mining companies will report income differently to banks based on industry specific factors. For large corporations this means grouping companies by how they declare their profits or earnings before tax. Due to the volatility of profits in some sectors and lack of disclosure of earnings in other sectors, our analysis is mixed. Grouping companies by sector (ASX defined) also acts to ensure an aligned review of company contribution, eliminating cross-sector variables, reporting discrepancies and allowing companies to learn from their peers. It follows that due to these aforementioned variables, that comparisons within the same sector are most meaningful.
Footnotes:
* The measure of any additional resources contributed to a community organization or activity that come from sources other than the company.
^ The revenue foregone for community benefit on fees, products & services provided for free or discounted
For further reading & definitions please review our full report, or refer to: GRI G4 implementation Manual, LBG Guidance Manual
