Miners lead large corporate philanthropy

A study has found Australian corporations are relatively generous philanthropists, but do not adequately monitor the effectiveness of their gifts.

Union-backed think tank Catalyst studied the philanthropic contributions of a dozen of Australia's largest corporations, finding 10 of them alone donated a combined total of more than $500 million to community groups in 2010.

Mining giants BHP Billiton and Rio Tinto accounted for 70 per cent of that total, with BHP donating $200.5 million and Rio Tinto giving $166 million.

Catalyst's executive director Jo-anne Schofield says one reason the mining companies give so much is because their profits are so high.

"The resource companies are both a lot wealthier than the other sectors," she observed.

"But, as well as that, they're fairly mature in their approach to sustainability issues generally, and they've been doing this for a long time and developing those sort of relationships with NGOs [non-government organisations] and communities where they work." Not only was BHP Billiton the largest donor in absolute terms, it also gave the highest proportion of its pre-tax profits to charity at 1 per cent, compared to between 0.7-0.9 per cent for most of the other companies surveyed.

"BHP was the only company to donate 1 per cent of its profit, and that's an amount that's considered good practice by international standards, so we were pleased to see that," Jo-anne Schofield said.

Catalyst's report shows, relative to profits, corporate community contributions from the 12 companies rose in the years between 2006 and 2009, but eased in 2010.

Some companies have also been tapping their customers and staff for donations to community groups, with retailers like Wesfarmers (which owns Coles) topping that list - the amount of funds it raised was one-and-a-half times as much as the company donated itself.

While most of the corporate contributions came in cash, retailers and food and beverage companies did make substantial in-kind donations.

Giving staff time off to volunteer made up a small part of most companies' contributions, expect for the two financial institutions in the study - ANZ and NAB - where it made up as much as a quarter of their community investments.

Up to 19 per cent of contributed funds also went in various management costs related to the programs, including publicity and communications.

However, the report shows many of the companies could concentrate more on managing their community contributions.

Most of those surveyed did little follow-up to see how effective their donations were, and had no clear strategy about which organisations to give to and how to maximise the effect of the contributions.

Catalyst's report shows only BHP, ANZ and NAB had comprehensive programs to measure the impact of their contributions, with Rio Tinto developing one by next year.

Jo-anne Schofield says European companies are generally much more sophisticated in their community involvement.

"There's a much more mature approach in the European context where global companies do work a lot more closely with civil society organisations and trade unions to talk about how they manage their social and environmental programs," she said.

"Further discussions with community groups around investment and making those dollars count would be a good thing."

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