Charitable giving by the 100 largest UK companies by value has fallen by 34% in real terms over the last decade, according to new research by the Charities Aid Foundation (CAF).
CAF’s latest annual Corporate Giving report, published today, shows that while the FTSE 100’s combined profits have increased by 49% since 2014, their total donations decreased by 13%.
In 2014, these companies recorded a combined pre-tax profit of £130bn, with donations amounting to £2.1bn. By 2023, their profits had risen to £194bn but donations stood at £1.82bn.
“This is a real-term decline of 34%,” the report says.
“If donations had risen at the same rate as profits have, the amount given by the FTSE 100 in 2023 would be an estimated £3.13bn.”
£164m year-on-year decline estimated
CAF looked at how much each FTSE 100 company contributes to charity by the amount donated and that sum as a percentage of pre-tax profits.
Last year, total spend on corporate giving by these companies was similar to that of 2022, decreasing from £1.85bn to £1.82bn.
However, when adjusted for inflation, this decline represents an 8.3% fall worth an estimated £164m of lost charitable contributions.
Healthcare was the most generous sector, making up 6.3% of the FTSE 100 by pre-tax profit but contributing 22.9% of the FTSE by share of donations, followed by real estate and consumer staples.
GSK was the biggest corporate giver by sum donated for the second year (£304m or 5% of pre-tax profits) while Tesco gave the highest percentage of pre-tax profits (11.9%), increasing its total donations by £30m to £119m.
Conversely, telecoms was the worst-performing sector, making up 6.2% of the FTSE 100’s pre-tax profit but contributing 2.3% of the total amount donated.
“Energy and industrials also have work to do to balance profits with donations,” the report reads.
Wider business sector
For the first time, CAF looked at the 870,000 companies that have a turnover of over £250,000 and make up the wider UK business sector.
Its report finds that 25% of these businesses have given to charity in the last financial year, totalling an estimated £2.26bn.
When looking at the UK’s 4.69 million smallest companies that have an annual turnover of less than £250,000, these donated an estimated £205m.
On average, FTSE 100 companies gave to six cause areas, including helping those in need, education and health/saving lives, while the wider business population donated to 2.6 causes.
“Amateur sports, animal welfare, and religion are the only causes that were more likely to be supported by the wider business community than by the FTSE 100,” the report says.
Plans to increase donations
The report says that if all companies “met best practice to give at least 1% of their pre-tax profits”, charities could receive £9.9bn a year, up from £4.3bn.
However, most corporates do not have plans to give more next year, with only 19 of the FTSE 100 committed to doing so.
“The wider business community reports similar results, with only 12% having already made plans to do more than they did last financial year, and a further 8% having made no firms plans, but reporting they’re likely to donate more,” the report reads.
“Just under half of those FTSE 100 companies pledging to increase their giving said this would be achieved through increased amounts of employee volunteering.”
‘We need a national strategy for philanthropy and charitable giving’
CAF’s chief executive Neil Heslop said: “As the largest listed companies, FTSE 100 businesses can lead and drive a responsible corporate culture throughout the UK’s business sector.
“Donating at least 1% of pre-tax profits should be the starting point, demonstrating a commitment to social purpose and delivering positive impact for both people and planet.
“The government has a crucial role to play too. A national strategy for philanthropy and charitable giving would help to renew a culture of giving throughout society, unlock vital charitable funds and ensure these reach the causes and areas that need it most.
“Our experience tells us that when charities, the private sector and government all play their part, we can work towards building a resilient and thriving civil society for the future.”
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