Australian Corporate Community Engagement Report

Corporate community engagement is becoming increasingly embedded in Australian business according to a new report into Corporate Community Investment in Australia, by the Australian Centre for Corporate Public Affairs with the Business Council of Australia.

The report was commissioned by the Prime Minister’s Community Business Partnership and looks at the community investment of some of Australia’s 100 largest businesses.

The report says the business case is now the predominant driver for companies to engage in corporate community investment. Most companies now see it as an ‘integral component to strategy and the corporate business model.”

On 7% of the major companies surveyed said they required no business case in determining whether to invest in the community. Of the 93% who believed that some sort of business case was needed, 24% required a focussed business case with some specific return on investment justification.

While CEOs and senior executives cited generalised reasons for corporate community investment including ‘building a better society’ and ‘promoting public benefit’, significantly the report says this is not seen by companies as inconsistent with contributing positively to corporate sustainability and long-run financial return.

An increasing number of companies also use community investment initiatives to build relationships with key stakeholders, including corporate critics.

The report found that a major characteristic of current corporate community investment is the more rigorous identification and selection of activities or Not for Profit partners connected to particular attributes or needs of an industry or business. Only 9% of companies reported that their corporate community investment activities are not aligned with specific or industry interests.

The study found that in fact some companies are actively pursuing community investment activities as a competitive ‘reputational’ differentiator. At the same time companies will work collaboratively or in a consortium with other companies to deliver corporate community investment programs more efficiently or to build scale in their activities.

In line with a more strategic approach the study found that companies are less reactive in the CCI activities. Less resources are being allocated to ad hoc or unsolicited requests for cash or in-kind donations.

At a time when employers are positioning themselves as employers of choice, expectations of staff, especially young people now form a major and growing driver of CCI activity. One trend that reflects this is the increasing prevalence of volunteering and matched giving. More than 60% of companies now provide between one and three days per year paid work time for volunteering. Nearly a third of companies now have a full-time member of staff to manage employee volunteering.

Almost half the companies surveyed through their boards and CEO now set a fixed amount of resources for community investment in the annual budget cycle.

The study found a major long term trend has been to develop fewer and deeper partnerships with Not for Profit organisations and, to a lesser extent, government agencies. Increasingly, these partnerships are being established with clear agreements or contracts that ensure mutual benefits, clarity of roles and relationships and specify exit arrangements.
The Minister for Families, Community Services and Indigenous Affairs, Mal Brough says ANZ and Alcoa participated in the report and were both national winners of the Prime Minister’s Awards for Excellence in Community Business Partnerships in 2006.

Alcoa of Australia’s partnership with Fairbridge has led to the revitalisation of an historic Western Australian community, transforming it into a renowned centre for programmes to develop the skills and talents of young people, particularly those who are disadvantaged.

ANZ has partnered a number of organisations, targeting three elements – Financial Literacy, Seeds of Renewal program and Employee Community Involvement. ANZ has recently announced its Reconciliation Plan in which it will seek to employee 300 Indigenous workers.
The report concludes that business and government can and should assist in the development of strategic corporate investment within the small business sector. It also recommends that business schools and other management courses place greater emphasis on CCI education.

It recommends that business and government explore the possibility of developing innovative business-based means to stimulate and facilitate corporate community investment learning and dialogue.

To download the Corporate Community Investment in Australia Report: http://www.facsia.gov.au/partnerships/downloads/cci_report_07.pdf.