Inna Tsyrlin details how a year of natural disasters has influenced corporate community support.
Inna Tsyrlin details how a year of natural disasters has influenced corporate community support.
The 2011 London Benchmarking Group (LBG) annual report, released in November, has assessed corporate community investment of 48 Australian and New Zealand members. The benchmarking report not only includes data of some of the region’s most prominent companies in a range of sectors, but key observations of global and local trends in corporate social responsibility.
Corporate support bounces back
Both Australia and New Zealand have been impacted by devastating natural disasters this year. LBG members have been directly and indirectly impacted by floods and earthquakes. “We were expecting a possible hit to members’ contributions, but it was great to see that total contributions were up overall,” says LBG Australian/New Zealand corporate community investment director Simon Robinson. “It’s clear both corporates and their employees dig deep in times of crisis.”
The study found that there was an increase of total contributions reported, from $254 million in 2010 to $259 million in 2011 (see Figure A); and average contributions per employee increased from $322 to $392. A fantastic result was also seen in the value of reported leverage (facilitated third party contributions), which jumped from $50 million to $114 million.
The increase in third party contributions indicates that members are working closely with their community partners and thinking of how to lever more from the corporate partnerships that they already have in place.
“We expect leverage to continue to increase in the future as companies improve data collection processes and develop a better understanding of the impacts of their corporate community investments,” adds Robinson. “With corporates facing uncertainty – financially and due to natural disasters – LBG members are leading the way in showing that strong and long-term community partnerships can literally weather the storms.”
Figure A – Total contributions reported
Members’ time contributions double
The disaster-filled summer has impacted how members have been contributing through their corporate investment programs and initiatives. While cash and in-kind contributions have remained fairly static over the past three years, it’s time contributions that have doubled from 7% in 2009 to 14% in 2011.
“We have noticed a trend that employee engagement in community initiatives enable companies to go beyond donating money,” says Robinson. “Whether it is a skilled volunteer program, like the one run by Origin for their education initiatives, or Solid Energy having volunteers run their booking line for their ‘Break from the quake’ campaign – employees want to get involved and corporates are recognising the personal and professional development that can be gained by employees.
“Importantly, using company expertise can be invaluable for some resource-poor community partners,” he adds.
Thus, in 2011 the number of volunteer employee hours worked in company time has increased by 12% to 51,832 hours. Additionally, the average number of employees undertaking community activities with company support is also up to 20% from 7.2% last year.
“This rise may be due to more active promotion of volunteering by members but also improved data collection,” notes Robinson. “Employee volunteering continues to represent a huge opportunity for business to further its community contributions.”
Shift towards charitable donations
In line with the year’s volatility, a strong shift to charitable donations has been observed (see Figure B). The jump from 20.4% in 2010 to 32.3% this year, as a proportion of total spend, suggests that budgets were redirected to support those in more immediate need.
“We have seen that those members who had a disaster relief strategy in place were able to continue their support of community partnerships and simultaneously support communities and areas affected by disasters,” says Robinson. “With the forecast increase in natural disasters I suspect more members will become better prepared and have a strategy in place as to how best to help those in need and carefully consider what form their support will take.”
Telstra, which worked intensively to restore communications during the Queensland floods rose to the challenge by following a plan for priority restoration, also found ways to help the community by giving away free calling cards and switching payphones to free-of-charge. Other members, like National Australia Bank, matched employee donations gathered during the Queensland flood appeal.
Figure B – Why members contribute
Support shifts from education to emergency relief
The distribution of what members supported in 2011 was impacted by the urgent need for disaster relief. Emergency relief not surprisingly, as a proportion of total spend, leapt from 5% last year to 20% in 2011 – as Queensland was flooded, Japan was hit by a tsunami and Christchurch was rocked by an earthquake. An interesting change has been observed, with a 4% reduction in the proportion spent on education contributions, down to 20% in 2011, and a 3% increase in health contributions to 23% in 2011 (see Figure C).
“The shift in support for health and education brings the Australian/New Zealand membership in line with the global group,” says Robinson. “Members are still making significantly more investments in education as a proportion of total spend as compared to economic development, the environment, the arts and social welfare.”
Even though there has been an increase in overall contributions, the figure isn’t as high as it was in 2009, where total contributions stood at $295 million, with fewer members reporting that year, compared with $259 million in 2011. There were natural disasters in 2009, with the unprecedented bushfires in Victoria. Australian and New Zealand members responded with their own resources and mobilising high levels of support.
Economic uncertainty across the world may have put members’ budgets under strain in 2010 and 2011, and it will take some time to get the numbers back up. That’s particularly true for the average contribution per employee, which was at $653 in 2009 but stands at $392 in 2011 (see Figure D).
“Members have also become more considered in how best to respond to natural disasters, ensuring support is targeted and useful,” says Robinson. “Therefore, the overall dollars reported may be less than reported in 2009 but the benefits and impacts are likely to be more significant.”
Figure C – What members support
Figure D – Contribution per employee
Australia Vs New Zealand
Despite New Zealand members operating in particularly tough times, its contributions continued to increase in 2011. Average contributions per member were up from NZ$4.9 million in 2010 to NZ$6.93 million this year, while employee contributions have increased from NZ$733 to NZ$921.
“We have seen that New Zealand members have continued their strong support of community investments. In considering how New Zealand members contribute compared to the group as a whole, there has been increased emphasis this year on cash contributions as a proportion of total spend rather than time and in-kind contributions,” says Robinson.
“New Zealand members contribute nearly twice as much to supporting arts and culture than the group as a whole,” he adds. “Arts and culture contributions include company spend on preserving Maori and Pacific Island culture.”
A full copy of the London Benchmarking Group report is available for download at www.lbg-australia.com.
