Warren Buffett’s eye-wateringly large donation to the Bill and Melinda Gates Foundation has focused minds once again on corporate philanthropy. One unreported side effect is to rebalance the notoriously inward looking and domestic world of American contributions, where big corporations earn most of their profits overseas but spend the majority at home. Indeed most of our news stories this edition have an international dimension, proving that charity may begin at home but it certainly doesn’t end there.
First, an annual moan – GSK continues to publish its headline contribution valued not at cost to shareholders but at notional worth, and to use a frankly misleading figure of pre-tax profit to demonstrate its generosity. The Charities Aid Foundation should know better than to repeat it. By overstating, both risk devaluing the terrific working being done to get life-saving drugs into the hands of people who can ill afford them, in Africa and elsewhere.
More substantively, the challenge Buffet and others have is to spend the money well – to be known for what they achieve, not what they give. So the news that American multinationals are developing a business-based strategy and recognising the need to measure outputs is both welcome and very significant, even if, from a European perspective, it seems somewhat overdue. Corporate foundations should be leading the charge to develop effective measures of community benefit.
An important part of the business case is to get the ‘narrative’ right – a storyline that intuitively rings true. We can understand why Unilever, with its portfolio of food brands, would work with the UN on child hunger; likewise retailer Waitrose with its overseas suppliers and positioning in the marketplace. The narrative underpins the business benefit side of the equation, whether cause-related marketing or softer reputation building.
As the numbers from CAF on corporate profitability show, the bottom line is that this remains essential, if budgets are to continue to grow.
Related news
Business gets giving
Britain’s 500 largest business donors contributed £1.07bn in cash and kind to charities last year, a 15% real increase on the previous year, according to Charity Trends 2006, the annual survey of the top 500 donors produced by the Charities Aid Foundation.
GlaxoSmithKline was cited as the largest corporate donor, giving £380m, or 5.6% of its pre-tax profit, but this figure included product donations valued at wholesale price. Royal Bank of Scotland (£56.2m), BP (£55.6m), HSBC (£47.4m) and Barclays (£39.1m) were also among the top five donors.
The number of companies donating more than 1% of their pre-tax profit to charity rose to 57 from 52 in 2003/04. A further 73 companies made donations despite registering a pre-tax loss.
However, worldwide community involvement – cash and kind donations globally – dropped as a proportion of pre-tax profits from 0.9% in 2003/04, to 0.8% in 2004/05. Contact Cathy Pharaoh, CAF 01732 520 094 www.cafonline.org
A consistent message
Nearly half of companies now align their community investment programmes with business objectives, according to Philanthropy and Business: The Changing Agenda, published by The Conference Board on May 17. The findings of the report are based on a survey which asked corporate contributions executives in 77 US-based multinational companies, both about their job descriptions and about their giving priorities and challenges for 2006.
Participants said the shift towards using contributions to further business objectives and enhance reputation and branding is the biggest change they have seen in their function over the past five years. Over two-thirds of respondents say that this year volunteering will grow in importance as a management priority, while more than a third say measuring results and outcomes is the biggest challenge they will face in managing corporate contributions programmes. Contact Sophia Muirhead, The Conference Board 00 1 212 339 0373 www.conference-board.org
Seeing RED
Motorola has joined HIV/AIDS cause-related marketing initiative RED, with backing from mobile operators and retailers across the UK – BT Mobile, Carphone Warehouse, Fresh, 02, Orange, Tesco Mobile, T-Mobile, Virgin Mobile and Vodafone. Motorola and its retail partners will donate £10 from the sale of each red MOTOSLVR handset purchase. Network operator partners have agreed to donate to the Global Fund 5% of the monthly revenue generated by each MOTOSLVR handset. Contact Mark Durrant, Motorola 01256 790 313 www.motorola.com
Reducing hunger
Unilever has teamed up with the United Nations World Food Programme in a three-year initiative to help reduce the incidence of child hunger, it announced on May 30. The company has committed to provide expertise in nutrition and health as well as financial support of 500,000 euros each year to help poor families in the developing world. The three-year partnership supports the achievement of two of the UN Millennium Development Goals – the eradication of extreme poverty, and universal primary education. The project will focus on school feeding and nutrition education in schools, as well as cause-related marketing campaigns and employee engagement activities. Contact Tanno Massar, Unilever 00 31 10 217 4000 www.unilever.com
Access to communication
The Vodafone UK Foundation announced on May 11 grants worth a total of £332,524 to three charities – Home Farm Trust (£150,000), SANE (£149,635) and the National Library for the Blind (£32,889). The grants further the foundation’s commitment to using technology to increase access to information and opportunities.
Home Farm Trust will invest in multi-media training for its staff, enabling them to help people with learning disabilities to create multi-media personal stories that give them a voice in their own personal development.
SANE is setting up an e-mail support service for young people affected by mental illness, extending the reach of its mental health help-line. The National Library for the Blind, meanwhile, will use the funding towards the production and provision of 15 multi-media books and accessible reference resources for young people from 16 to 25. Contact Vicki Argles, The Forster Company 020 7403 2230 www.vodafone.com
Fruitful venture
The Waitrose Foundation has invested £330,000 in community projects for farm workers in South Africa, it announced on May 26. The foundation, established in June last year, is a partnership between Waitrose supermarket and its suppliers. It aims to facilitate social, education and health-related schemes for farm workers and their communities. The supermarket channels a portion of the profits earned from sales of South African citrus fruit into the foundation to fund its work. Over the past year the foundation has funded 25 initiatives, benefiting around 5,000 workers on ten citrus farms. The foundation now plans to extend the scheme to avocado growing communities, after unprecedented consumer support enabled the supermarket to exceed its initial fundraising targets. Contact Gill Smith, Waitrose 01344 825 165 www.waitrose.com
COMMENTS