In the mosaic of national generosity that was driven by bushfires and the COVID-19 pandemic, the contribution of corporate philanthropy reached record heights in 2020.
Corporate Australia’s top 50 companies totalled $1.1 billion in total giving last year, a 17 percent increase on the previous year, according to the 2020 GivingLarge report.
The report presents a picture of a corporate sector that responded to the twin crises of the bushfires and then the pandemic, despite the potential commercial impacts of both on their bottom line. But report author, Strive Philanthropy co-founder Jarrod Miles, expects that the 2020 business downturn that affected many corporates will translate into a decline in giving this year.
The leading companies last year by total contribution were mining and resources giant BHP ($221million); supermarket chain Coles ($125m); Commonwealth Bank ($70.9m); biotech company CSL ($57m) and miner Newcrest ($55m).
Coles topped the list of companies on their percentage contribution of profit or earnings, by giving 7.3 per cent of their pre-tax profit. The average contribution is 0.89 per cent of pre-tax profits.
But it’s not just the big companies that are making significant contributions.
Toilet paper company Who Gives A Crap – a beneficiary of pandemic ‘loo' roll panic buying – donated $5.9 million to clean water and sanitation projects in developing countries.
Other companies had other causes. Coles, for example, directed funds towards food rescue, health, and disaster relief. BHP donated $50 million to the regions in which it operates, to provide support through the impact of COVID-19, to help local health services and build resilience. The Commonwealth Bank supported Indigenous communities, health, and financial well-being
The report found that more than a hundred Australian corporates gave an estimated $144 million to bushfire relief efforts. “The devastation across the country triggered a significant and welcome response from the business community, with large cash donations as well as support on the ground with corporate resources and in-kind products to aid victims and firefighters,’’ the report said.
There was a similar generous response to the pandemic, with the report estimating there was a $176 million corporate contribution from 30 companies to COVID-19 related causes or to Not for Profit organisations last year. Mining companies BHP, Rio-Tinto, Newcrest and South32 led the way, with a combined contribution of more than $100 million but Macquarie Group – which donated $20 million through its foundation and Woodside Energy establishing a $10 million COVID-19 community fund – were also significant donors.
“Importantly while not all organisations were in a position to make large cash contributions, we noted many took the opportunity to confirm their support to existing community partners,’’ the report found.
Jarrod believes there is much to recommend corporates committing to giving and those who already donate, giving more.
“The truth is there are reputational benefits across the stakeholder groups, and that includes employees and investors,’’ he says. “Corporate giving is a strategic choice.’’
The context for such an approach is informed by the commercial reality of big companies competing for talent among an employee recruitment pool who may find philanthropic commitments a key consideration for choosing their next career or staying in their role. But it also works to a broader agenda of corporates occupying roles as community strengtheners with altruistic goals.
What the data cannot capture is what impact these donations have on the ground, among its recipients, organisations, and communities. There is also no way yet to assess corporates’ foregone revenue as part of their broader philanthropy (free rent for NFP offices in corporate headquarters for example) or a company’s leverage that helps influence others to give.
The question is, however, how much of the corporate giving actually inspires personal giving. If your company gives to a cause, are you more likely to do the same? Or do you think that because the company is doing it, you don’t have to.
“One thing we’re not doing well is connecting corporate giving with individual giving,’’ Jarrod says. “But the last thing we want is the corporate giver to become the main giver in lieu of individual giving.’’
There is also the important consideration of where the growth in corporate giving will come from in 2021.
“We’d need to look at those companies flourishing outside the top end of town,’’ Jarrod says. “some of the medium size or smaller companies.’’
There are a range of sectors in the economy that are not big donors. The leading percentage contributors in 2020 came from the consumer, healthcare, and telecommunications sectors of the economy, while the materials sector contributed the largest total figure.
The report identifies that eight out of the ten companies, or 63 percent of the total Giving Large figure, were from the Finance and Materials (resources) sector. “2020 profits for these sectors were less affected by the year’s crisis and so many have provided an acceptable environment for companies within these sectors to increase their giving to areas of need,’’ the report observes.
BHP’s giving was up 64 percent on 2019, while Newcrest was up 110 percent on last year. Macquarie’s giving – at $35 million was an 82 percent increase on last year – and Medibank at $9.5 million was up 111 percent.
Communications and information technology plus the industrial and utility sections of the economy were well down the contribution list.
Overall, however, 68 percent of the $1.1 billion in Australian corporate giving in 2020 came from the top 10 companies.
Strive Philanthropy’s GivingLarge 2020 report is supported by Philanthropy Australia
The GivingLarge report available for charities and not for profits - 40% less for a limited time. Available here
Jarrod will be leading the Corporate Philanthropy Workshop at the upcoming Philanthropy Australia National Conference. The Corporate Philanthropy Workshop will explore how we can craft a future where corporate philanthropy becomes a key factor in the boardroom, asking not just what the future needs from corporate Australia, but also how we can create a future environment that provides a meaningful attachment between corporate generosity and overall corporate performance. Learn more about National Conference and secure your registration here.