Donations by largest companies fell to lowest level in five years in 2014

A report from the Charities Aid Foundation says the amount donated by FTSE 100 companies that year was £2.1bn, the lowest since 2009

The report
The report

The total amount given to charity by the largest companies in the UK fell to £2.1bn in 2014, the lowest level in five years, according to research by the Charities Aid Foundation.

The report, Corporate Giving by the FTSE 100, says that the amount donated by FTSE 100 companies in 2014 declined to the lowest level recorded since 2009, when £1.8bn was donated. The 2014 figure was a 17 per cent decline – equivalent to £420m – on the £2.5bn donated the previous year. It equated to about 3 per cent of the sector’s gross income that year.

The report says the decrease was down largely to a significant reduction in giving by six firms, most of which had experienced a fall in income during tough trading conditions.

The fall in donations is broadly in line with predictions made in a poll commissioned by the Social Investment Consultancy in 2009, which estimated that a serious decline in corporate giving during the recession could lead to a loss of £500m for charities.

But while 52 companies on the index reported a fall in revenue in 2014, the report shows that most firms either maintained or increased the proportion of revenue they donated to good causes and the median donation per company rose to £3.8m, up from £3.5m in 2013.

This amount has risen every year since 2009, when the median amount was £1.6m.

Eighty-seven of the 100 companies reported making charitable donations in 2014.

The study was based on data reported in the annual reports and corporate social responsibility reports of the companies listed in the FTSE 100 as of 15 December 2015.

Other findings include the fact that just over a quarter of the FTSE 100 – 27 companies – donated at least 1 per cent of their pre-tax profits to good causes, up from 22 in 2012, the last time this was studied, while 13 companies gave away less than 0.1 per cent of their profits, down from 20 in 2012.

The report also shows that the 10 biggest donors accounted for 71 per cent of donations in 2014, down from 73 per cent the previous year.

Companies in the healthcare sector accounted for 40 per cent of giving by the companies in 2014, despite representing only 5 per cent of the FTSE 100. By contrast, the industrial sector, which represents 15 per cent of the FTSE 100, accounted for only 1 per cent of donations.

CAF notes in the report that growing numbers of firms are becoming less open about their corporate philanthropy, with 13 of the FTSE 100 ceasing to include information about their giving in their annual reports in the past two years.

Klara Kozlov, head of corporate clients at CAF, said in a statement that the fall in overall donations highlighted an imbalance in the types and quantities of donations across different companies and sectors.

She said that some newer companies had grown their giving quickly but had not yet replaced the donations of those in traditional industries which had suffered falls in revenue.

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