Big society: bigger in some areas of society than others

Corporate charitable donations are not only down, but unequally distributed, with the most deprived areas losing out, according to new research. The "big society" is bigger in some areas of society than others. That's one conclusion you might take from the findings of new research which shows not just how much (or how little) large companies give to charities, but importantly, where their donations go.

According to the Directory of Social Change (DSC), the most recent financial accounts for the UK's biggest corporate givers (the majority for the year 2010-11) donated £603m worth of support to charities, including £470m in cash,

As may be expected in a recession, corporate giving is down, both in cash terms (down 16%) and as a percentage of pre-tax profits.

Interestingly, the financial services sector gives the most, accounting for around half the cash donated, or around 0.7% of pre-tax profits (compared to 0.3% across the board, but still below the 1% of profits some see as the benchmark for corporate charity giving). There are also some individual exceptions; but for the most part company giving is underwhelming.

As DSC chief executive Deborah Allcock-Tyler said recently:

I surely can't be the only person who feels truly horrified by the evidence in this report of the paucity of company giving in Britain. Yes there are some who give, give generously and give well. But what is comprehensively demonstrated in the Almanac is that the vast majority of our companies in the UK have a great deal to be ashamed about.

What is also distinctive about company giving is how skewed the distribution of corporate largesse is. For the most part, companies are remarkably parochial about their charity support, says DSC; the biggest companies tend to be in wealthier areas, and focus charity giving in their own back yard.

DSC's Dr Catherine Walker, the author of the Company Giving Almanac 2013, told me:

The big story is that the money is not going to where the need is.

Again there are some exceptions: west Yorkshire, for example, has several of the most deprived boroughs in the UK, but corporate giving looks relatively healthy, explained mainly by the singular generosity of the late Jimi Heselden, an ex-miner turned multi-millionaire entrepreneur who made several generous donations to the voluntary sector in Leeds.

But the exceptions do not confound the wider pattern of corporate charitable giving. According to DSC:

The majority of companies firstly consider supporting causes which are close to home, figuratively and geographically, with many concentrating their giving around their headquarters, main offices or branches.

This leaves some of England's most deprived areas (the DSC data is shown in county areas, rather than by local authority areas, except in London) with apparently no support from large corporate donors. These tend to be mainly in the north of England, the west Midlands, and in rural areas.

So the table below shows that while 16.9% of south Yorkshire, which includes Labour leader Ed Miliband's Doncaster constituency, suffers from income deprivation, the total percentage of corporate donations invested in the area stands at 0.1%. At the other end of the scale, Oxfordshire, home to the prime minister, David Cameron, has an income deprivation score of just 6.4% but hoovers up 6.5% of charitable donations.

England corporate giving

In London, this imbalance creates some interesting variations, as the graph below shows: Westminster, which has a mid ranking income deprivation score of 17.5% (shown in red) but a high density of big businesses, accounts for 35% of corporate donations (shown in yellow). Haringey, Enfield and Islington all have scores of over 20% of the income deprivation scale but, according to DSC, do not attract donations from big corporates. Tower Hamlets is the poorest of all, but, caught in the glow of the financial titans around Canary Wharf, it attracts 5.9% of corporate giving in the capital.

Luckily for charities, corporate largesse is a relatively small part of their total income (2%, compared with 43% from individuals, 37% for the state, and 9% from charitable foundations).

But the corporate giving figures confirm other uncomfortable big society truths: that charities tend to be concentrated in wealthier areas, and that volunteering and civil society is stronger in those neighbourhoods. They also compound the effects of the unequal distribution of local government cuts, which are most harsh in the poorest boroughs.

It may be of course, that all this puts too much emphasis on company giving as a marker of corporate social responsibility. How many of the big givers pay a living wage to their employees? How many "generous" companies can guarantee that the low paid workers who clean their corporate HQ's are not also dependent on charity food banks and school breakfast clubs?

The DSC data is by necessity broad brush. It doesn't include small and medium size companies. It doesn't claim that because a company is based in, say, Surrey, all its corporate donations stay in Surrey. But it points to a wider concern: that large scale corporate charitable giving is not efficiently, or equitably, distributed.

Walker challenges corporates to take a new approach:

What we want is for companies to stand back and look at the big picture... rather than just giving in their local community. (http://www.guardian.co.uk/society/patrick-butler-cuts-blog/2013/jul/03/big-society-corporate-charity-donations-down-dsc?CMP=twt_fd)