Giving - Small Business Versus Corporate Giant
19 February 2001 at 12:02 pm
A far-reaching study into the relationship between small business and Not for Profits in Australia reveals that small firms contribute more than $1 billion a year in cash and $2 billion in kind to the sector. But it largely goes without public attention!
The Spirit of Enterprise Study was prepared by the Council of Small Business Organisations of Australia (COSBOA) and calls for fundamental change in the approach to “giving” strategies for small business by separating them from major corporations.
It also recommends a change in the tax treatment for in kind support by small business.
The study was authorised and funded by the Department of Family and Community Services as part of the Prime Minister’s Community Business Partnership initiative, in response to a request from COSBOA.
The study was conducted in three parts- a nation-wide phone survey of 427 small businesses, ‘opinion leaders’ interviews with 203 heads of national and state business and NFP organisations, and an evaluation of 13 ‘best practice’ case studies from a wide range of industries and communities across Australia.
The head of COSBOA Rob Bastian says this report overwhelmingly shows that the collective contribution of small firms to local community life is both large and naturally given.
However he says the reports also shows that a cross-pollination of data and ideas between local community stakeholders could be improved.
He says there is a high level of cynicism in both the business and Not for Profit leaderships about the objectives of the Government push to transfer responsibility for funding Not for Profits to the private sector as part of the “social compact”.
The analysis reveals that small firms see the nature of their “giving” as different to large corporations and are concerned about the inequitable tax treatment of their in kind support as against the relative ease of deductibility by large firms.
It recommends a major focus on communication to help Not for Profit groups to appreciate the difference between the dispersal of corporate shareholders’ funds and the giving of personal wealth and time.
Another fundamental finding was that small business “giving” is widely recognised but awareness of the character, scale and diversity of its contribution is low. Key recommendations stressed a re-orientation of a national program promoting community business partnerships to greater empower local relationships and give ownership at the lowest regional level.
About 85 percent of opinion leaders agreed that a local, community –based approach required greater facilitation.
Against a background of more than forty detailed recommendations the Spirit of Enterprise Study distilled 8 key areas in its Executive Summary:
1. That a new relationship descriptor be developed in concert with and ‘owned’ by local business networks.
2. That small firms not be pressured to publicly give more and they be educated to give strategically.
3. That strategies for small and big business participation be separated.
4. That appropriate tax treatment of in kind gifts be developed.
5. That in-kind support be formally evaluated and recognised.
6. That education programs about small business be prepared for the Not for Profit sector.
7. That both the scale and scope of current community involvement by small business be heavily promoted nationally and locally.
8. That a culture of exchange should be cultivated between small business and Not for Profits.
COSBOA’s Rob Bastian says the change in direction suggested in this report is not small and called for an early planning meeting with his organisation, the secretariat of the Community Business Partnership and Not for Profit organisations to review the findings and plan the next steps.
On a personal note, Rob Bastion says the opportunity for involvement in this pilot study was rewarding and humbling and it was really amazing to see what people do in this country!
He says COSBOA hopes to play a role with the ongoing work in this area.
In reviewing the report, the President of the Australian Council of Social Service, Michael Raper says it draws on a number of interesting distinctions between the contribution of small firms and major corporations.
The report was delivered to the Federal Government late last year for consideration and until now has not been available for public comment.
Pro Bono Australia e-Newsletter readers have the unique opportunity to be the first to comment on this far-reaching report. You can add your comments on the report and its recommendation on the Forum page of our site.