Business will donate £500m less to charity, says survey
Fresh evidence of how the credit crunch is hitting charities emerged today with a new poll showing that business donations to good causes are expected to be cut by almost £500m this year as a result of the economic downturn.
The survey of 450 senior business leaders in the UK found that corporate giving is expected to drop by 34% this year, with six out of 10 respondents expecting that their organisation will cut its charity budget.
British business gives an estimated £1.4bn a year in revenue and support to good causes - much of it from the now devastated financial services industry.
According to the research, which was commissioned by the Social Investment Consultancy and carried out by online pollsters YouGovStone, about 83% of respondents believed that reducing corporate giving was "a necessity" in times like these.
In addition to cutting the total amount of support, almost half of those questioned expected to cut the number of good causes they support this year.
Jake Hayman, the chief executive of the Social Investment Consultancy, said: "These cutbacks will either expose corporations as fair-weather donors, or it could mean they apply themselves to develop more innovative ways of supporting communities.
"The truth is, there are plenty of things companies can do to maintain strong partnerships with good causes that can build rather than hit the bottom line."
More optimistically, four out of five respondents agreed that companies whose budgets are squeezed should look for other ways of helping the community, such as helping staff volunteering, offering the use of their function rooms for fundraising events, or "gifts in kind".
A computer company that previously gave a £10,000 cheque to its chosen charity might, for example, now opt to give 10 laptops directly. It is a gift still worth £10,000, but perhaps only costs the company £5,000.
The financial services sector, which has been among the worst hit by the economic crisis, has dominated corporate giving. Royal Bank of Scotland and HBOS gave £57m and £55m in 2007, according to their annual reports, but that level of funding must now be in jeopardy. Lehman Brothers, the US bank that collapsed last September, reportedly gave $39m (£28m) to charity in 2007.
The Northern Rock Foundation, which was set up by the bank to fund charitable and voluntary organisations in the north-east of Britain, was also a significant donor.
The consultancy's clients include Standard Chartered Bank, which last year commissioned the firm to gauge how effectively staff were engaging with its flagship Seeing Is Believing programme. The scheme is operated in conjunction with the International Agency for Prevention of Blindness to reduce the levels of avoidable blindness.
