Charity donations from FTSE 100 firms ‘have not keep pace with profits’

Research by the Charities Aid Foundation found a 34% decline in donations from FTSE 100 firms in real terms since 2014.

Research by the Charities Aid Foundation found a decline in donations from FTSE 100 firms in real terms in the last 10 years (Victoria Jones/PA) (PA Wire)

Charity donations from the UK’s biggest publicly listed companies have not kept pace with their profits over the last 10 years, analysis has found.

Research by the Charities Aid Foundation (Caf), which helps donors to give more impactfully, found a 34% decline in donations from FTSE 100 firms in real terms since 2014.

While the FTSE 100’s combined profits have increased by 49% since 2014, their total donations have declined by 13% in the same period, Caf said.

The organisation’s Corporate Giving 2024 report analysed the FTSE 100 based on the amount they give to charity and separately the percentage of their pre-tax profits they donated.

As the largest listed companies, FTSE 100 businesses can lead and drive a responsible corporate culture throughout the UK’s business sector

Neil Heslop, chief executive of Caf

Caf found FTSE 100 total donations were £1.82 billion in 2023.

This was slightly down on the £1.85 billion given the previous year, which equated to an estimated £164 million of lost charitable contributions in real terms, it said.

Healthcare company GSK topped the list for the total sum given to charity for the second time, donating £304 million which accounted for nearly a sixth of the 100 firms’ total charitable giving.

Meanwhile, Tesco was found to have given the highest percentage of pre-tax profits, increasing its total donations by £30 million and becoming the highest climber in the FTSE 100 rankings.

On the other hand, the report said Associated British Foods and Pershing Square Holdings came joint last, both ranking with no donations, excluding several firms where the information was not available or they made a pre-tax loss.

The report added that both Associated British Foods and Pershing Square Holdings make “significant charitable donations… through different vehicles in common ownership”, which have not been counted at the companies’ request.

An Associated British Foods (ABF) spokesperson said the Garfield Weston Foundation, one of the UK’s leading grant-making institutions which has given £1.5 billion since 1958, is “funded principally by dividends coming from Associated British Foods plc”.

“In its last financial year, the foundation donated some £100 million to charities,” they said.

“In addition, companies within the ABF group contribute significant amounts to charity in their own right.”

Neil Heslop, chief executive of Caf, said: “As the largest listed companies, FTSE 100 businesses can lead and drive a responsible corporate culture throughout the UK’s business sector.”

Giving at least 1% of pre-tax profits to charity and maintaining that level in years with lower profits is considered best practice for businesses.

Mr Heslop said this “should be the starting point, demonstrating a commitment to social purpose and delivering positive impact for both people and planet.”

But Caf’s analysis found that the FTSE 100 donate an average of 0.9% of their pre-tax profits, compared with 0.4% on average for businesses in general.

This year is the first time Caf’s annual report analysed charitable giving by the UK’s wider business community, beyond the donations given by FTSE 100 firms.

It found that if all companies donated at least 1% of their pre-tax profits, this could mean £9.9 billion going to charities.

However, only one in five companies intends to increase their giving next year – 19% of FTSE 100 and 20% of wider businesses, Caf said.

Mr Heslop said the Government also has a “crucial role to play” to galvanise charitable giving.

He called on ministers to establish a national strategy for philanthropy that can “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”.

A Government spokesperson said: “The UK has a proud tradition of charitable giving and philanthropy, with the public donating an estimated £13.9 billion to charity last year.

“We are committed to helping to build an equal society across all regions of the UK. We will work to make giving as easy and compelling as possible, working in renewed partnership with communities, philanthropists, corporations and civil society.”