Company giving in the UK remained steady as a percentage of pre-tax profits but fell significantly in value terms, with an increasing amount of donations being made in-kind, according to new research from the Directory for Social Change (DSC).

The 8^th edition of The Guide to UK Company Giving shows that the top 600 companies gave around £762m in community support in 2009/10. £512m (68%) was in cash donations. The previous edition (2007/08) included only 490 companies, who together gave £808m in community support, with £500m (62%) in cash donations.

The average given by the top 600 as a percentage of pre-tax profits was just 0.43%. This compares to the figure for  individual giving which has remained at around 0.4% of income as reported by the Centre for Charitable Giving (CGAP).

Over the last 10 years there has been a gradual increase in community support and cash donations, says DSC, although generally speaking, trends are difficult to pinpoint because of the lack of transparency in the cost/value in the reporting of many companies’ in-kind support.

However, Denise Lillya, DSC senior researcher and author of the Guide, says that one reason for the increase in reported in-kind giving is that companies have become more aware of publicising – though not necessarily in a transparent way – their contributions and support.

“DSC would encourage companies to be transparent both in their giving policies and what they have given. If companies were clear about how they should be approached and what they are prepared to fund, they would receive fewer applications/appeals and the applicants could save time and resources by only targeting appropriate companies,”she says.

“We would also like to see companies giving a detailed breakdown of what they have given over the course of the year in line with the London Benchmarking Group’s model.”

This level of giving is a long way from the optimism for greater corporate giving expressed in the recent government Giving Green Paper. It states that 77% of business leaders say they could do more to scale up strategic support for communities across their business, and 80% feel they could do more to engage other businesses to scale up their support.

“This is an encouraging statistic, however, saying you could do more is not quite the same as saying you will be doing more,”says Lillya.  “DSC’s research shows that the average given as a percentage of pre-tax profits (including gifts in-kind) for 2009/10 is only 0.43%. Over the past 10 years the average is 0.4%. The potential for those companies that give already to do more, and to do it more transparently, is plain, and an even greater potential lies in those who currently give nothing or relatively little.”

DSC also points out that while in-kind giving demonstrates a welcome proactive approach and growing awareness of companies’ corporate social responsibility, it may not always be the support that is most needed. “This proactive approach, whilst commendable in some respects, can result in them giving forms of assistance, for example, volunteering employee time and secondments, not always needed by the charitable community and which in some cases can impinge too heavily on the charity’s own resources.”

The trend towards more in-kind giving is also echoed in the US, according to figures released by The Committee Encouraging Corporate Philanthropy (CECP). Covering 2009 in its report Giving by Numbers it shows that non-cash giving rose by 16% over the previous year.

By  comparison, two-thirds of companies reduced their cash contributions, dropping to its lowest total in four years. CECP reports that in a poll of leading US chief executives and giving officers, a clear majority in both groups reported that they believe it is necessary to take a proactive approach in solving social problems important to their business because, as corporate citizens, they are in a “unique position to make a difference”.

Overall, the majority (60%) of US companies reduced their giving in 2009 over the previous year.

These results suggest that there may not be much point in looking to corporate donors to make up the funding gap left by public spending cuts, unless there is a dramatic change in their thinking or their shareholders’ attitudes, according to Cathy Pharoah of the Centre for Charitable Giving and Philanthropy. “But the continued expansion of in-kind giving means that, if anything, companies value their relationships with charities more. It shows that in a climate of uncertainty about corporate ethics and accountability, community relationships are important to companies. Charities need to build on this.

Pharoah adds:" More research on the ‘fit’ between the in-kind support that charities want and what companies give is probably needed, and DSC has highlighted the need to get the fit right, but the growth in in-kind giving also needs to be seen within the wider context of changing relationships between the non-profit and for-profit sectors. The generic ‘in-kind’ term actually covers a wide range of imaginative support in working with charities and tackling some of today’s big challenges. For example, the M&S - OXFAM Clothes Exchange, which has raised £2.2m and saved the amount of unwanted clothing going to landfill. There is scope for much more of this kind of project."

BT has recently increased its in-kind giving through the launch of a charitable giving website, MyDonate. Unlike rivals JustGiving and Virgin Money Giving, MyDonate will not charge charities or donors to use the site, and will not take commission. However bank fees payable on credit and debit card payments will be deducted from donations.

Meanwhile  the Lord Mayor’s Dragon Awards which actively encourage London organisations to increase their in-kind giving as a means of engagement with local communities is open for nominations.

The Guide to UK Company Giving(8^th edition) by Denise Lillya, is published by the Directory of Social Change and available for £75 from www.dsc.org.uk/companies

Giving in Numbers is available for free from http://www.corporatephilanthropy.org/measurement/benchmarking-reports/gi...