Ethical Performance
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Corporate giving may fall by one third in recession

May 2009

UK companies’ donations to good causes are expected to fall by more than a third this year, reports a new poll.

A survey of 450 business leaders, commissioned by The Social Investment Consultancy (TSIC), found corporate giving is likely to drop by 34 per cent because of the recession, with 60 per cent of respondents expecting their organization to cut charity budgets. Half of those surveyed thought their business would cut the number of good causes they support in the coming months.

British business gives an estimated £1.4billion ($2bn) a year to community causes, so the predicted fall would represent a loss of about £500million to the voluntary sector.

TSIC chief executive Jake Hayman said the spending cuts were more or less inevitable. ‘In these cash-strapped times, businesses clearly cannot afford to sustain their current levels of charitable donations,’ he said. ‘But the cutbacks will either expose corporations as fair weather donors, or could mean that they apply themselves to develop more innovative ways of supporting communities.’

Meanwhile, a separate study on corporate giving has shown that UK companies tend to increase their donations in foreign countries where there are human rights concerns.

Research published in the Journal of Management Studies shows British multinationals in countries with poor human rights records give about 70 per cent more to charity than other companies to ‘offset’ perceptions of their involvement in abuses.

Stephen Pavelin, a contributor to the paper, Corporate charitable giving, multinational companies and countries of concern, said the findings were ‘indicative of relatively token responses to corporate exposure to political and civil rights issues.’  

The study of 305 UK listed companies found that a presence in one or more countries in which rights are curtailed increased the average donation levels from £1.15m a year to £1.98m.

The Social Investment Consultancy | UK & NI Ireland | Charitable giving

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