UK Corporate Giving : A Call for Purpose and Progress
- Meritfuture insights
- Dec 1, 2024
- 3 min read
Updated: Dec 2, 2024
As the year 2024 comes to a close, the FTSE 100 Corporate Giving Report by the Charities Aid Foundation (CAF) offers a comprehensive reflection on how the UK’s top businesses are contributing to society. The findings present a mixed picture, highlighting both areas of progress and pressing opportunities for greater impact. (link below)
A Decade of Stagnation in Giving
Despite a rise in the combined pre-tax profits of FTSE 100 companies by 49% over the last ten years, corporate giving has declined by 34% in real terms. The report reveals that total donations amounted to £1.82 billion in 2023—a figure that has not kept pace with growing revenues and economic power.
The stagnation becomes even more stark when juxtaposed with inflation-adjusted metrics. If all FTSE 100 companies committed to giving at least 1% of pre-tax profits, it could result in £2.9 billion annually for social impact.
Bright Spots in the Landscape
Several sectors and companies lead the charge in corporate philanthropy. The Healthcare sector contributes a greater share of total donations, making up just 6.3% of the FTSE pre-tax profit but 23% of the FTSE by total share of donations. Companies such as GSK (£304M) and Tesco (£119M) exemplify best practices by integrating corporate giving into their core strategies.
GSK’s leadership in healthcare impact: GSK emerged as the largest corporate giver among the FTSE 100 in 2023, contributing £304 million, which included cash donations, in-kind contributions of medicines and vaccines, and employee volunteering time. Their initiatives address systemic health challenges, particularly in low- and middle-income countries, and align closely with their corporate mission.
Tesco’s Transformative Impact: Tesco not only increased its donations by £30 million to £119m but also led in giving as a percentage of pre-tax profits, with 11.92%—a remarkable benchmark showcasing how businesses can integrate purpose with profitability.
National Grid's Surge in Giving: The National Grid increased its charitable contributions from £18.3 million in 2022 to £47.7 million in 2023. This growth aligns with the organisation’s focus on community support during times of energy crisis and record prices.
Employee Engagement through Volunteering: Over 2.1 million hours of volunteering were logged by FTSE 100 employees in 2023, marking a 65% increase. Companies like Standard Chartered, with 609,008 hours of employee contributions, exemplify how volunteering strengthens community ties while enhancing workplace culture.
Beyond the FTSE: Challenges in Broader Corporate Giving
While the FTSE 100 has established benchmarks, broader corporate giving lags behind. Only 25% of UK businesses beyond the top 100 supported charitable causes, contributing an estimated £2.26 billion. Small and mid-sized businesses remain an untapped potential for philanthropy, signalling the need for greater awareness and incentivisation.
Sectoral Disparities: While sectors like healthcare lead with outsized contributions, industries such as telecoms and energy underperform, with donations far below their proportional share of pre-tax profits.
Limited Engagement Beyond the FTSE 100: Among smaller businesses, only 25% donated to charitable causes in 2023. Many of these companies lack awareness, infrastructure, or incentives to engage in philanthropy, leaving significant potential untapped.
Declining Real-Term Giving: Despite some bright spots, inflation-adjusted giving by FTSE 100 companies has dropped by 8.3% year-over-year, signalling stagnation in the broader corporate philanthropic ecosystem.
Recommendations for Stakeholders
For Businesses
Set Measurable Goals: Commit to the 1% giving benchmark and ensure consistency, even in years with lower profits.
Integrate Philanthropy with Strategy: Align giving with business goals, such as health, education, or environmental sustainability, to create shared value.
Prioritise Long-Term Partnerships: Build alliances while ensuring executives set the tone from the top, speaking out about both corporate and personal giving commitments, for impactful operations.
For Policymakers
Strategy: Develop a national strategy for philanthropy and social impact.
Mandatory Reporting: Reinstate requirements for corporate giving in annual reports to enhance transparency and accountability.
Create Incentives: Introduce tax benefits or grants for businesses that prioritize charitable contributions in key sectors like education, sustainability or health.
For Charities
Alliances: Create bold corporate partnerships.
Demonstrate Strategic Value: Clearly align your mission with corporate goals and provide tailored impact metrics to resonate with potential donors.
Leverage Expertise: Highlight how your organisational expertise enhances corporate social responsibility initiatives, fostering mutually beneficial partnerships.
The Path Forward with Meritfuture
At Meritfuture, we empower businesses to elevate their social impact strategies. From aligning philanthropy with organisational goals to fostering employee engagement and streamlining impact reporting, we offer comprehensive solutions that drive measurable results.
Whether you're a company looking to meet the 1% benchmark, a policymaker exploring ways to incentivise giving, or a charity seeking to build partnerships, Meritfuture is here to guide you every step of the way.
Together, let’s transform corporate giving into a cornerstone of societal progress.
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