Clear policy key to consistent giving by companies

DEFINING a company’s commitments to charity and allowing community organisations to do their job is crucial to cementing a culture of giving by corporate Australia.

This was one conclusion offered by a philanthropy-focused panel at a breakfast hosted by Giving West and the University of Western Australia last week.

Wesfarmers chairman Michael Chaney, who was on the panel, said that in line with global benchmarks, companies should contribute 1 per cent of pre-tax profits to charitable organisations.

Mr Chaney recalled the reaction from the Wesfarmers board when he first broached the subject years ago.

“One of the directors said, ‘we don’t have the right to give away shareholders’ money’. I thought at the time, that is actually a misconception about this issue. This is company money, there is a difference and directors have an obligation to look after the company,” Mr Chaney said.

“I found once we agreed on a percentage, all those arguments went away … the questions went to what we should give it to.”

Mr Chaney said that since then many bigger companies had established this practice. Smaller companies still had the potential to develop their corporate giving.

Other panel members at the Giving West and University of Western Australia-hosted breakfast agreed.

The panel included Atlas Iron director David Flanagan, Fogarty Foundation executive chair Annie Fogarty and McCusker Charitable Foundation trustee Tonya McCusker.

Azure Capital executive chairman and Giving West chair John Poynton said it was important to ensure there was more to go around for giving.

“I think if we could get companies across a broad spectrum to give a fixed percentage of their pre-tax profits away every year, some already do of course, but if we got most or all doing this, imagine how much bigger the pie would be,” Mr Poynton said.

“That is one of the aims at Giving West, increasing the pie, we see it as an obvious place to start.”

Mr Flanagan said he agreed that many more companies should be involved in corporate giving, but that there might be limitations for smaller companies with profits that were not necessarily constant or sustainable.

This created challenges to establish the infrastructure that was required to engage with corporate giving.

Mr Flanagan said establishing other ways of giving, such as volunteer days, had been a successful form of corporate giving for Atlas Iron.

Atlas had been engaged in days where all staff, including those on the company’s work sites, work in community organisations for the day in a volunteer capacity.

“I have never seen a happier group of people in my life. The resilience it created in each individual and collectively in the business was just tremendous. We will be doing it again and again,” Mr Flanagan said of the flow-on benefits of programs such as this.

Among the panel, the concept of reporting made for another passionate conversation.

Ms McCusker said that in the past charitable organisations had had experiences that made them conscious of obtaining reports and feedback from their recipients to ensure money was being properly spent and this was a necessary function in the giving process.

“Some do it so well and others have poor records. There is a responsibility on us as donors to give but there is also a responsibility on the community sector to do it responsibly,” she said.

Mr Chaney agreed this was important, but said the administration was at times unnecessary.

“One of the problems with many not-for-profit organisations and, particularly when you are applying for grants from the government, is the administrative burden placed on them in application and then reporting back,” he said.

“I have always taken the approach that given I felt the people were reputable, we could trust them to do what they said they were going to do and leave it to them and put pretty minimal reporting requirements on them.”

Mr Chaney said one of the issues that came with giving was prescription on behalf of the donor.

“One of the perennial problems is that people give money but they want it tied to a particular task. Most not for profits, the biggest challenge they have in funding is for their general administrative costs, and no one seems to want to donate to that.”

Companies should implement rolling funding schemes in order to ease financial pressure for organisations they supported.

“Often companies will give three year grants, and that is fine, except that when it expires, the organisation finds themselves without funds,” he said.

Mr Chaney said that by having rolling three-year funding streams, which added one funding year on to each year, organisations would have at least two or three years notice to the funding ending.

Ms Fogarty said she believed business and community organisations had mutual goals that helped to establish relationships between the two sectors. “It is about building stronger communities,” she said.

Mr Flanagan said that in Atlas’ case, finding causes to support was initially a matter of flagging the causes that were not necessarily attracting funding streams.

“It is a combination of finding things people can’t get money for, things we really want to make a difference in, things that are important to your staff. And sometimes, someone just gets you at a weak moment,” he said.

“Essentially, you need to be passionate about what you are going to support, you need to really believe in it, or else you are really just keeping the seat warm for someone else.”

Mr Chaney said that while there was an increasing tendency for companies to support communities in which they had a vested interest, which was important, it was also important to establish other community support.

“I think there is also a compelling argument for supporting general community causes where you may not be operating, and it goes to a question of reputation,” he said.