FTSE 100 firms slash charitable giving as profits rocket
Britain’s biggest companies have slashed their charitable donations by nearly a quarter over the past decade despite pre-tax profits rocketing in the same period, research has showed.
Firms listed on London’s flagship index, FTSE 100, donated £1.85bn last year, 26 per cent lower than the £2.51bn donated in 2012, according to research from the Charities Aid Foundation.
The slowdown comes despite corporate profits surging over the past seven years. The total amount donated in 2022 is the same as in 2016, the last time the analysis was carried out, while the cumulative profits of the FTSE 100 have trebled over the same period.
The number of firms donating the equivalent of one per cent of their pre-tax profits has also stayed roughly constant, with 24 firms giving one per cent or more last year, compared to 26 in 2016.
Charities Aid Foundation has now called on top firms to step up and more generously spread their cash around as the country feels the pinch of inflation and rising costs.
“As many households are squeezed and many charities struggle to survive in the current climate, it is essential that those who have the capital and resources, step up and lead,” Neil Heslop, chief executive of Charities Aid Foundation, told the Financial Times.
“Had the FTSE 100 continued to donate the same proportion of cumulative pre-tax profits as they did in 2016, we would have seen a total of £5.59bn of charitable donations from these businesses,” he said.
Corporate donations dropped below pre-Covid levels “seemingly to offset some of the additional — and unexpected — charitable expense during the pandemic”, the report from Charities Aid Foundation added.
Firms in the healthcare sector have dished out more cash than any other sector with 2.95 per cent of pre-tax profits funnelled into charities funnelled into charities, the FT reported.
Industrials and consumer staples sectors were at the top end of donaters, with an average of 1.76 per cent of pre-tax profits. All other sectors gave less than 1 per cent of profits, on average.
GSK is the most generous firm, donating more than five per cent of profits, while energy giant Shell gave 0.28 per cent last year, six and half times less than they did in 2016.