FTSE 100 companies cut back charity spending, research shows

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Companies on the UK’s FTSE 100 index have cut their charitable donations by 17 per cent in real terms over the past six years despite a near-trebling of pre-tax profits over the same period. 

The UK’s largest 100 listed companies donated £1.85bn in 2022, a similar amount to 2016 and a quarter lower than the £2.51bn of charitable giving reported in 2012, according to research due to be published on Monday by Charities Aid Foundation. 

The figures come as many charities face a rise in requests for help from people struggling to make ends meet during the cost of living crisis.

Companies on the UK’s blue-chip index donated 0.8 per cent of pre-tax profits last year, down from 2.4 per cent in 2016, the last time the analysis was run. 

“As many households are squeezed and many charities struggle to survive in the current climate, it is essential that those who have the capital and resources, step up and lead,” said Neil Heslop, chief executive of Charities Aid Foundation, a charity that advises businesses and individuals on how they can support other charities.

“Had the FTSE 100 continued to donate the same proportion of cumulative pre-tax profits as they did in 2016, we would have seen a total of £5.59 billion of charitable donations from these businesses [in 2022],” he said. 

While many companies increased their contributions in 2020 and 2021 to offset the economic impact of the pandemic, the report found that corporate giving mostly fell to pre-pandemic levels in 2022. Corporate giving by some companies dropped below pre-Covid levels “seemingly to offset some of the additional — and unexpected — charitable expense during the pandemic”, it added. 

The impact of inflation meant that the value of the companies’ charitable donations was 17 per cent lower in real terms than in 2016. But the businesses were more generous than members of the public had assumed. A YouGov poll found that the public believe that only 37 per cent of the FTSE 100 donates to charity. In fact, 94 of the companies on the index publicly declare charitable giving. 

Healthcare companies gave more to charity than any other relative to their earnings, contributing 2.95 per cent of pre-tax profits. GSK’s contributions amounted to 5.47 per cent of pre-tax profits, a higher proportion than any other company. 

The basic materials and consumer staples sectors, which include mining groups such as Rio Tinto, Glencore and Anglo American and high street names such as Tesco, Sainsbury’s and Unilever, were also among the most generous, contributing an average of 1.76 per cent of pre-tax profits. All other sectors gave less than 1 per cent of profits, on average. 

The report was based on data disclosed in companies’ annual reports and ESG reports about their charitable giving, which includes cash and in-kind donations, matched funding of employee donations, employee volunteering and costs incurred from supporting community initiatives. 

UK companies have not been required to disclose their donations since the Companies Act was amended in 2013, leading to inconsistency in the information they publish. 

Heslop called for that change to be reversed and so that details of companies’ charitable giving would be available under “a consistent framework”.