Cash Contributions from Australian & NZ Companies Remain Static - LBG Report

Australian and New Zealand companies delivered more than $259 million in total contributions to the community in 2011 focusing on health, education, young people and emergency relief, according to the latest report by the London Benchmarking Group (LBG).

However, the report found that cash contributions are remaining fairly static while the proportion of companies who contribute ‘time’ to the community has doubled.

The sixth annual LBG Benchmarking report contains consolidated data on community contributions of 48 companies in Australia and New Zealand.

The report highlights include:

• $352.00 contributed per employee on average
• 51,832 employees volunteered in paid company time
• 0.60% of pre-tax profits were contributions
• 0.08% of total revenue were contributions
• $114 million in facilitated third party contributions

The LBG report includes data from includes industries such as NAB, Australia Post and IBM.

LBG was established in the UK in the mid-1990s as an international standard for measuring and benchmarking corporate community investments. The global group now has 120 members across 15 countries. LBG Australia & New Zealand is made up of nearly 60 companies and is the second largest membership.

Health, education , young people and emergency relief received the largest proportion of contributions in 2011. Health represented the largest proportion (23%), overtaking education/ young people (20%) which had received the largest proportion of contributions in the previous three years.

The report says it is no surprise to see emergency relief jump from just 5% last year to 20% this year.

As a result, funding has been redirected from social welfare, where the proportion of overall contributions has halved from 16% to 8%. Again, this would support the observation that budgets may have been switched to support those affected by natural disaster and away from longer-term community investments.

The average percentage of employees having paid time off to volunteer is 7.8% (up from 5.8% in 2010) with 51,832 employees involved. The average number of employees undertaking community activities with company support is up to 9.8%. This rise may be due to more active promotion of volunteering by members but also improved data collection.

Employee volunteering continues to represent a huge opportunity for business to further its community contributions. The number of employees volunteering in company time increased in 2011 by 12% to 51,832.

Payroll giving, one of the easiest forms of employee contribution, continues to show an upward trend with 17,187 employees giving to the community in this way. The average participation rate across the membership in payroll giving is 7.1% of the workforce and 19 members match employee contributions.

The report says that with more companies reporting in 2011 it has seen a slight increase in contributions however, contributions reported this year are less than contributions reported in 2009.

It says in 2009 there was vast support for those affected by the Victorian bushfires and flooding in New South Wales. In 2011, it says there have been natural disasters devastating communities in Christchurch, Queensland, Victoria and overseas, and businesses have responded with their own resources as well as mobilising unprecedented levels of support from employees, customers and the general public.

It says this support has been reflected in much higher levels of contributions made by third parties (reported as leverage). However, contributions are up from 2010 despite a backdrop of increasing economic uncertainly in Australia and New Zealand.

The report says companies have also become more considered in how best to respond to natural disasters, ensuring support is targeted and useful.

“Therefore, the overall dollars reported may be less than reported in 2009 but the benefits and impacts are likely to be more significant.”

The LBG report says cash contributions have remained static with in-kind contributions decreasing slightly from 20% to 18% of contributions overall. Since 2009 the proportion of companies who contribute ‘time’ to the community has doubled from 7% to 14%.

“This reflects the increase in companies recognising the personal and professional development gained by employees who volunteer, along with community partners realising the value of utilising a company’s expertise”

Companies asked to consider their motivations for contributing – whether as a donation (a one-off contribution), a community investment (a longer-term partnership) or a commercial initiative (made with some commercial objective in mind).

The report says 2011 has seen a strong shift away from community investment (down from 57.7% to 46.3%) to donations (up from 20.4% to 32.3%) with commercial initiatives remaining virtually unchanged as a proportion of overall contributions.

The report says that a likely cause would be the response to natural disasters in the region and beyond, which may have meant limited budgets were redirected to support those in more immediate need.

It says both percentages against profit and against revenue are down in 2011 and in both cases have shown a downward trend for the last three years, reflective of the tough economic climate in which our membership operates.

In 2011 the average contribution per employee is up by $70 and is in line with figures reported in 2008. The average contribution per employee increased in 2009 due to support for the Victorian bushfires, and dropped back in 2010.

The report says this drop is likely to be attributed to a reduction in budgets as companies faced uncertain economic times. This is particularly true of New Zealand companies who have operated in especially challenging times with an economic downturn and the aftermath of the Christchurch earthquakes.

The full report can be downloaded here (PDF).