New research from nonprofit KiwiSaver manager Simplicity shows NZ companies give much less to charity than equivalent companies overseas.
The paper, “Community or Shareholder? A survey of corporate philanthropy in NZ” was written for and to be presented at the Philanthropy NZ Conference in Wellington this week.
Key findings from the research are:
NZ'ers are amongst the world’s most generous individuals, giving 0.79% of GDP to charity annually, ranking 3rd behind Myanmar and the United States.
NZX50 listed companies trail well behind other developed countries in corporate philanthropy, giving 0.07% of pre-tax profits, vs 1.75 % for FTSE100 companies in the UK, an average of 1.69% for large companies in the US and 0.59% for Australia’s 50 largest companies.
Given higher tax deductibility for personal donations, it is understandable that more is given by individual Kiwis than companies.
There is no significant statistical correlation between higher giving and higher profits in NZ ie. companies are not rewarded for their generosity in the form of increased customer loyalty and higher profits.
Wellness and corporate purpose are key to staff retention in a tight labour market, so doing nothing is unlikely to be a viable policy going forward.
Sam Stubbs, Managing Director of Simplicity said: “ A low level of corporate philanthropy was expected, but we were a little surprised by how little NZ corporates give.
"Much of this can be attributed to no history of corporate philanthropy in NZ, generous individual donations by Kiwis, a strong welfare state, demands by shareholders for dividends, and no correlation between generosity and higher profits,” he said.
“In our environment, it’s understandable why companies overall aren’t focused on Philanthropy,” he said.
“In countries where corporates give more, there tends to be a weaker welfare state, more inequality and higher public recognition for giving eg. Naming rights on buildings,” he said.
In spite of low current levels of giving, Simplicity predicted that this would change over time due to employee and customer demands.
“Employees, especially younger ones, demand more than just money from their job. They want to know the business they work for has a purpose and is contributing to the community. One way of doing this is cash donations, corporate foundations and employee away days. This is a trend that’s likely to continue,” said Mr Stubbs.
“And social enterprises are growing and competing for the same talent, so companies will need to show they care more. One way is philanthropy,” said Mr Stubbs.