A report has identified misleading charitable contributions at some of Australia’s largest companies
Australia's 20 largest publicly listed companies claimed to contribute $1.775 billion to community causes in 2024.
However, according to research from The Australia Institute, this figure is inflated and misleading.
When questionable items are excluded, such as business costs, foregone revenue, and employee contributions, the actual philanthropic spending drops to approximately $665 million, less than half the reported amount.
This $1.1 billion gap represents items that should never have been counted as corporate giving in the first place.
An example highlighted in the report is Westpac's association with the NSW rescue helicopter service.
While 93% of NSW residents overestimated Westpac's contribution, the bank actually provided less than 7% of the helicopter service's revenue.
Why this matters for HR leaders
The transparency gap in corporate philanthropy creates several challenges for HR professionals:
- Employer branding credibility: When candidates or employees discover that reported philanthropic contributions are significantly overstated, it damages trust. If your recruitment messaging emphasises corporate social responsibility based on inflated figures, you risk your credibility once the reality emerges.
- Employee engagement authenticity: Many organiaations encourage staff volunteering and giving as part of company culture. When the company claims credit for employee donations or counts forgone revenue as philanthropy, the messaging becomes confusing. Are employees contributing to genuine organisational purpose, or participating in a reputation management exercise?
- Alignment with stated values: Organisations frequently articulate values around transparency, integrity, and honest communication. Yet the current lack of standardised philanthropic reporting allows inconsistency and interpretation that contradicts these values.
- Talent attraction and retention: Purpose-driven employee, particularly younger workers, want to work for organisations with authentic social impact. They're increasingly sceptical of corporate claims and will look beyond the headline numbers. When they discover that community contribution figures are misleading, it could affect retention and engagement.
Research from S&P Global Market Intelligence found that charitable giving reduces employee turnover by 5.9% to 7.8%.
The same report highlighted that 70% of employees believe “their personal sense of purpose is defined by their work” and 59% of CEOs reported that “top talent prefers to work for organisations with social values aligned to their own.”
Calls for standardised reporting
The report called upon the Australian Securities Exchange (ASX) to require all companies with over $1 billion in market capitalisation to disclose philanthropic activities.
The Australia Institute said the disclosure must be:
- Made on the company in question’s reporting date
- Included in the company’s annual report
- Itemised into clearly defined legitimate categories of philanthropy
- Presented in a consistent template
- Audited or otherwise independently verified
What HR leaders can do now
Even without a mandate, your organiaation can improve its approach to philanthropic transparency:
- Audit claims: Examine what your organisation currently reports as community contributions. Separate genuine donations from forgone revenue, costs of doing business, and employee contributions.
- Align external and internal messaging: Ensure that recruitment materials, employee communications, and sustainability reporting use the same definitions and figures.
- Involve employees honestly: If your organisation supports employee giving and volunteering, acknowledge these as employee contributions rather than claiming them as corporate philanthropy.
- Adopt consistent standards: Consider adopting frameworks like B4SI (Business for Societal Impact) that provide clear categorisation of contributions: cash, employee time, in-kind products, and management costs.
- Create authentic narratives: Work with communications and sustainability teams to tell the genuine story of your organisation's impact, whatever that number is. Authenticity is more compelling than inflated figures.
- Lead on transparency: Position your organiaation as a leader in philanthropic transparency. This becomes a competitive advantage in talent attraction and a demonstration of organiaational integrity.
For HR leaders, the lesson is clear: Your organisation's credibility depends on the alignment between what you claim and what you actually do.
As employees and candidates become more sophisticated in evaluating corporate claims, authenticity and transparency in philanthropic reporting doesn’t just make ethical sense, it makes business sense.
The 20 largest companies' verified philanthropic contributions represent just 0.51% of their annual net profits. That's still meaningful, but it's far less than the public currently believes.
When that gap is discovered, organisations that have been transparent will emerge with their reputations intact.
