What Gives? Corporate investment in communities

| August 3, 2012

Businesses are not traditionally thought of as investors in community, but the reality is that more are showing an interest in corporate citizenship and responsibility. Jo-anne Schofield says the sector is hampered by a lack of guidance about what constitutes good practice in community investment.

Philanthropy is probably not a topic that’s agonised over in the board rooms of corporate Australia, but behind the scenes, some of our biggest companies performers are investing large sums in community initiatives.

Unlike their mega-wealthy overseas counterparts who have set up high profile foundations to tackle global health and poverty, Australian firms appear to be quietly going about their giving.

To date there have been few studies to look at how much Australian companies donate, what motivates them to invest in particular areas. This changed in July with the release of our new report "What Gives? How companies invest in communities".

The report delves into the community investment activities of a diverse sample of 12 of our biggest and brightest publicly listed companies, who are all leaders in sustainability reporting. Technically this group should be top of class in providing information about all of their social and environmental activities which includes community investment.

Collectively the group reported donations totalling a combined $513 million in 2010. Added to this, eight gathered $63 million worth of donations simply by harnessing contributions of staff and customers.

Not surprisingly the wealthiest companies in the sample (BHP and Rio) were responsible for 70 per cent of the half a billion contributed. However, only one company, BHP contributed one per cent of its profit – an amount considered good practice internationally.

Most contributions were in the form of cash, much of it given via formal partnerships with large not-for-profit organisations. One-off donations and grants also featured across the sample, as did donations of staff time through volunteering, although these were less pronounced.

Behind the attention-grabbing dollar signs, we were surprised to find that companies are making decisions on community investment without a shared understanding of what constitutes good community investment practice.

Few companies had strategies or policies to guide their community investment decisions, and few were measuring the impact of their investment to see if funded programs were delivering the intended results for communities.

We explored what motivated companies to support one good cause over another, and when we searched for motivational statements, we found a mix of motivations applied, ranging from altruistic tendencies through to business needs.

The report’s recommendations go some way to addressing these and other gaps in reporting and measuring community investment. We’ve argued that companies should work more closely with community organisations to begin to evaluate what programs deliver the best outcomes and what policies will support good investment practice. Companies should also set out clear statements about the value they hope to achieve at the beginning of their community investment ventures so that their motivation is transparent. In the longer terms, there is a need to work collaboratively – and closely – with the community sector.

Cash-strapped community organisations are increasingly turning to corporate donations as a life-line to deliver vital services to the community. They need to be given a space to work more closely with companies to share their expertise about what works so that every dollar spent makes a difference in the community.

Ultimately, the shows is that collaboration and transparency are key to ensuring that corporate philanthropy is part of a bigger public conversation about the social impact of corporate activities. In the area of community investment, this impact is extremely positive. However companies need to be judged across the full range of their activities. How they manage their environmental impact and supply chain, how they treat their workers and interact with customers, their attitude to regulation and paying taxes are all issues that impact on communities.

Jo-anne Schofield is Executive Director of Catalyst Australia Inc., an independent policy network. The report on community investment, along with past papers in Catalyst’s series on corporate social responsibility is available on the Catalyst website.



  1. John Kirk

    John Kirk

    August 6, 2012 at 2:33 am

    Corporate Citizenship


    A great blog and I look forward to reading the report.  I am currently working towards my DBA thesis in which I am going to be looking at this subject.  Hopefully I will be able to add to the knowledge base.

    In 1962 Friedman said the only responsibility of business was to make profit as long as the worked within the rules of the game.  My thesis is going to look at the top 50 ASX companies to ascertain if the rules of the game have changed and that CSR is now an expectation of society particularly in Australia. 


    John Kirk