A corporation's social licence to operate depends partly on its contribution to the community, however information on philanthropic donations by big business is limited and confusing.
While companies claim they give tens or hundreds of millions of dollars to the community each year, only a fraction comes in the form of charitable donations.
The Australia Institute analysed the philanthropic donations of Australia's 20 largest publicly listed companies:
- Twelve counted dubious contributions towards their overall community contribution.
- Combined expenditure amounted to $1.8 billion, however $1.1 billion were identified as dubious claims ($905 million) or had too little information to categorise ($204 million).
- Examples of dubious claims include counting sponsorship deals, employee support and donations from customers as part of the company's contributions to the community.
- The report recommends that the ASX should require the largest publicly listed companies in Australia to follow a standard method of disclosing philanthropic expenditure to shareholders and the public.
Examples:
- Banks claim the fees they waive to some customers as part of their corporate giving. The Commonwealth Bank listed $274 million in forgone revenue (like fees waived for benefit recipients and not for profit organisations) as "community investment".
- Westpac provides just a tiny fraction of the funding for the beach rescue helicopter which carries its name and logo, but counts sponsorships against its overall "community investment" figures.
- Of the $143 million Woolworths calls "direct community contributions", just $15 million is identified as financial support from the company. $81 million is donated surplus food. However, it's unlikely it could sell that food and the company may actually save on disposal costs by giving it away.
- Wesfarmers appears to claim money paid by customers at charity sausage sizzles outside their Bunnings stores as part of its own charitable contribution. This is neither Bunnings' money nor Bunnings' fundraising.
"Companies like to talk up their charitable giving, but some provide such limited and self-interested documentation that it's impossible for the public to judge which companies are truly generous and which are just good at PR," said Bill Browne, Director of the Democracy and Accountability program at the Australia Institute.
"If a mate claimed they were very generous because they convinced someone else to give to charity, you'd think they were joking. But that's the kind of thing companies say in their corporate reporting.
"Companies win a social licence to operate based, in part, on how they give back to the community. If the public can't assess how much they give back, then those social licences are on shaky ground.
"The Albanese Government has a target of doubling philanthropy by 2030, but for this to be realised Australia needs businesses to get on board and be transparent in their philanthropic activities and reporting."
