28 November 2012 — An index that measures community contributions by corporates has shown that community investment is down in Australia and New Zealand.
The London Benchmarking Group Australia and New Zealand Measuring Corporate Community Investment 2012 Annual Review found there were $204 million in community contributions, $354 was the average contribution per employee, a total of 43,000 employees who volunteered in paid company time contributed 703,000 hours, company contributions were equivalent to 0.41 per cent of pre-tax profit and equivalent to 0.07 per cent of total revenue and there were $117 million in facilitated third party contributions.
Other figures found Emergency Relief dropped from 20 per cent of contributions last year to 5 per cent in 2012 – or $42m.
“Most of this contribution was picked up in support of Social Welfare, which also appears to be the area most likely to suffer when funding for Emergency Relief peaks, dropping by 8 per cent in 2011, and 7 per cent in 2009 during the time of the Victorian Bush?res,” the report said.
“Financial services, representing less than one ?fth of the LBG membership, is still the most strongly represented in reported contributions, with more than one third of total investment ?owing from this sector for the third year in a row.”
The report said in-kind contributions had been trending downward since 2009, while management costs were the highest since reporting began in 2006.
“This can, in part, be attributed to the increasingly robust methods employed by our members in capturing and reporting these overhead costs. The cash component remains by far the largest portion of overall investment.”
Community investment has risen 6 per cent, to 53 per cent of total contributions.
The report found employees played an important role in investment across the membership in 2012 with almost 43,000 staff members contributing more than 700,000 hours of volunteering, up 70 per cent from 2011.
“Employees also donated more than $7.7m to the community, making up 6.6 per cent of leverage. A large portion of these staff funds were donated via payroll giving programs, which were offered by 59 per cent of members, a 7 per cent increase since 2011.
“With the exception of 2010, leverage has increased each year since reporting began, with a record $117m reported in 2012, or $2.7m per member. Customers have always been the greatest source of leverage and this year saw a $30m increase to their contribution.”
It was also reported that in 2011, the difference between the investment rates of Australian and New Zealand companies was minimal, with New Zealand companies investing an average of $5.3m compared to $5.4m in Australia.
“This difference increased signi?cantly this year, with the average investment of Australian companies dropping to $4.7m, and New Zealand companies substantially more, reporting an average of $3m of community contributions this year.”
Meanwhile, Teachers Mutual Bank has outperformed the Australia and New Zealand benchmark average by spending 4.18 per cent of pre-tax profits on community investment, as measured by LBG.
This is 10 times higher than the LBG Australia/New Zealand benchmark average of 0.41 per cent, and 3.5 times higher than the LBG Global Benchmark average of 1.2 per cent.
LBG is the internationally recognised standard for measuring and evaluating a corporation’s community investment allowing companies to account for their total community investment using standard definitions and valuations.
The LBG model was introduced to Australia and New Zealand in 2005 and now has more than 50 members. More than 250 companies are international members.