Welcome to the

11th LBG Annual Review of Community Investment

Presenting the latest highlights and trends in corporate community investment across Australia and New Zealand.

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report

What is LBG?

LBG's measurement framework is the global standard for measuring and benchmarking corporate community investment. The model enables companies to consistently manage, measure and benchmark their contributions, helping them to strategically progress their community programs. The network of companies using LBG provides a platform to share experience, best practice and new ideas.

The LBG Framework

Inputs

What's contributed?

How (form of contribution)
  • Cash
  • Time
  • In-kind (including pro bono)
  • Management costs

Why (driver for contribution)
  • Charitable gifts
  • Community investment
  • Commercial initiatives in the community

What (issue addressed)
  • Education
  • Health
  • Economic development
  • Environment
  • Arts and culture
  • Social wellfare
  • Emergency relief

Where (location of activity)
  • Europe
  • Middle East and Africa
  • Asia Pacific
  • North America
  • South America

Outputs

What happens?

Community outputs
  • People reached/supported
  • Type of beneficiary
  • Organisations supported
  • Other company-specific output measure (e.g. environment)

Business outputs
  • Employees involved in the activity
  • Customers/consumers reached
  • Suppliers/distributors reached
  • Other influential stakeholders reached
  • Traditional/digital/social media coverage achieved

Leverage (additional resources from other sources)
Total leverage split by
  • Employeee donations via payroll giving
  • Other employee contributions
  • Customers
  • General public
  • Other organisations/sources
  • Employees involved in own time
  • Hours contributed in own time

Revenue foregone for community benefit
  • Financial products/services
  • Utility bills/fees/services
  • Accommodation, office space, venue hire
  • Media/advertising space

Impacts

What changes?

Community outputs
On people
  • Behaviour or attitude change
  • Skills or personal effectiveness
  • Quality of life/well-being

On organisations
  • Improved or new services
  • Reached more or more time with clients
  • Improved management processes
  • Increased their profile
  • Taken on more staff or volunteers

On the environment
  • Impact on the envonrment
  • Impact on the environmental behaviour

Business Impacts
On employee volunteers
  • Job-related skills
  • Personal well-being
  • Behaviour change
On the business
  • Human resource benefits
  • Stakeholder relations/perceptions
  • Business generated
  • Operational improvement delivered
  • Uplift in brand awareness
  • Positive media coverage

How companies use LBG

Janet Liu - ANZ ANZ

Communicating community investment to key stakeholders

Janet Liu - Corporate Sustainability and Community Manager at ANZ

ANZ is a founding member of the LBG Australia and New Zealand chapter and we've been using the methodology for over ten years.

The LBG methodology has helped us to communicate our community investments to a wide range of stakeholders, including our customers, shareholders, internal decision makers and staff. LBG allows us to quantify our contribution into an easily digestible format for different audiences. For example, our LBG data feeds into our annual reports, is published on our website and used to promote our community work on social media.

We receive excellent feedback from stakeholders on our volunteering and community programs. The methodology helps us to communicate the real-life impact of our programs which is important for us to share as it helps build our social license to operate. Telling those positive stories also helps to make us an employer of choice and contributes to our employees' engagement.

The independent verification provided by the LBG team means that our assurors are willing to accept our LBG summary report as evidence of our community contributions. The data also feeds directly into our Dow Jones Sustainability Index submission.

Corin Millais - Teachers Mutual Bank Teachers Mutual Bank

A more focused and methodical approach

Kate Driessen - Community Relations Advisor, Myer

The LBG methodology allows Myer to measure and track our corporate community investment activity in a much more focused and methodical way. Through LBG our community investment has become quantifiable, it feeds into our strategic planning and we are better equipped to meet the objectives of our community programs.

For the first time this year we are looking at not only the inputs and outputs of our community investment, but also the impact. This is an exciting next step in our desire to ensure we are making a meaningful difference through our partnerships and initiatives.

From an employee perspective, we are able to report on and provide a better assessment of our workplace volunteering and fundraising program. We are committed to enabling our employees to volunteer and fundraise but we need to work within the challenges - and opportunities - posed by a retail business environment. LBG is helpful in demonstrating that we can make it work by recognising the substantial value and quantity of volunteering and in-kind support occurring within our business structure. In this age of disruption, it is so important to look at the nature of community support that a business can offer beyond the traditional avenues.

Being an LBG member provides assurance for our own auditing purposes and provides a great snapshot that we can provide to senior management and other stakeholders of our annual contribution. I greatly appreciate being part of the LBG member group and having access to a network of peers and knowledge centre specifically geared towards corporate community investment.

Corin Millais - Teachers Mutual Bank Teachers Mutual Bank
Jo Farrie - Woodside Woodside

Informing internal decision making

Jo Ferrie - Manager Social Investment, Woodside Energy

We joined LBG in 2009 and applied the model retrospectively to our 2008 contributions data. The internal impact was almost immediate. What the data showed us was a disproportionate amount of our community investments were geared to one sector, but there had been no strategy or directive to make this sector a priority. By utilising the LBG methodology and being more disciplined in our analysis and the way we measured our contributions, we have ensured our investments are better aligned to our strategic objectives and those of the communities we support. This has given us confidence to know our funds are being allocated appropriately and achieving meaningful impacts. Growing on this confidence, the data helped to measure and report on our social investment contributions.

As a publically listed company, one of the greatest benefits of the LBG membership is its tie-in to the Dow Jones Sustainability Index (DJSI) and the Global Reporting Index (GRI).  The LBG reporting and verification process provides the exact data required by the DJSI and it also adds weight to our GRI reporting – it makes reporting and measurement much more efficient. I also value the collegiate thinking that comes with the LBG membership.  We are able to benchmark against our peers and the networking and collaboration opportunities are truly invaluable.

The State of Corporate Community Investment i

The State of Corporate Community Investment (CCI) 2016 survey compliments the LBG annual review which measures and benchmarks what LBG member companies in our region have achieved in the past year. The survey asked CCI professionals from across Australia and New Zealand to share their aspirations and plans for the future.

In 2016, between July and October, we saw a doubling of responses from CCI professionals who completed the survey. In 2015 the responses were restricted to LBG members but this year we invited a wider group of CCI professionals to participate.

LBG’s measurement framework ensures a robust and credible approach to measuring the real value and impact of CCI to business and society. We do encourage every business that chooses to invest in community investment to use LBG to measure its effectiveness.
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Budgets & flagship partnerships remain strong

Budgets & flagship partnerships remain strong

Almost 95% of overall CCI budgets are set to remain the same or increase in 2016/17. Almost a quarter of respondents plan to increase the number of flagship partnerships while 60% are planning to make no changes.

The value of planned flagship partnerships varied from $8,000 to $2,000,000 with the average being just over $203,000. This is less than the average of $236,000 reported last year.

“Flagship programmes are the most effective way to achieve deep impacts and get known for your social investment activities. If you’re thinking about how your social investment activities are going to evolve, consider who your true priority audience is, and take the brave step to focus on them, as you design a flagship programme” said Nick Jackson, Corporate Citizenship.

More information on Corporate Citizenship insights into flagship programs can be found here: http://corporate-citizenship.com/our-insights/flagship-social-investment-programmes/

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Impact measurement is important but not resourced

Impact measurement is important but not resourced

Almost 80% of respondents see impact measurement as important, very important or essential yet two thirds of respondents indicated they did not set aside budget for impact assessment despite its importance.

“This finding is disappointing and paradoxical but matches the findings of recent UK research published by Corporate Citizenship that revealed a gap between corporate aspirations and reality when it comes to CCI. It is only when truly understanding the difference a company’s resources make can the real value be realised” said Simon J Robinson LBG Director Australia and New Zealand.

The findings from the Corporate Citizenship report can be accessed here: http://corporate-citizenship.com/our-insights/hard-outcomes-hollow-promises-realising-true-impact-cci/

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Public disclosure is on the decrease

Public disclosure is on the decrease

Only a quarter of respondents intend to publicly disclose CCI targets, either as a percentage of pre-tax profit, dollar value or output related data (including employment figures, people involved, volunteer hours or workplace giving participation). This is a reduction on the intent reported in 2015 however this is likely to be largely reflective of the fact that 2016 responses included non-LBG members where there is likely to be a lower rate of disclosure.

Duncan Paterson, CEO of Corporate Accountability Enhanced Responsibility (CAER) says "CAER analysis has demonstrated that LBG members have a higher rate of disclosure in this area than the general market. Ultimately companies will benefit from increased transparency – as the investment community pays more attention to environmental, social and governance issues, these sorts of questions will be asked with increasing frequency."

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A desire to align in working with Government

A desire to align in working with Government

Of the respondents 65% are not influenced by government policy or agenda though many indicated they work to align activities when and where it is relevant to do so. Key issues include reconciliation action plans, employment, health and climate change.

Many respondents cited how they would like to work more closely with government but noted that it can be challenging. “We want to invest in the areas where we are perceived to be (and may actually be) causing harm, but it is difficult to do so in an environment of blaming and shaming” one survey participant stated.

Simon J Robinson, LBG Director Australia and New Zealand said, “The Sustainable Development Goals (SDGs), now offer a real opportunity for all sectors to align their activities to make a real difference in the world. Only with all three sectors working together will we tackle the major challenges like poverty and climate change.”

Alice Cope, Executive Director Manager, Global Compact Network Australia, added “The SDGs really are a blueprint for business opportunity, representing serious challenges in need of solutions that in many cases the private sector can deliver. We have been delighted to see a number of leading Australian companies move early to embrace the SDGs and align sustainability strategies with the agenda. The next step is to drive this through the broader business community. To do this, we need to translate the SDGs into local operating contexts, make links to core business opportunities, support coalition and partnership building, and encourage innovation. In that way, we will be able to unlock the full potential of the private sector’s contribution to the SDGs and scale impact.”

Further information on the SDGs can be found here: http://corporate-citizenship.com/our-insights/advancing-sustainable-development-goals-business-action-millennials-views/

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Workplace giving continues to be important

Workplace giving continues to be important

Workplace giving continues to be a key part of company’s CCI activities. 12% of respondents plan to start a workplace giving program in 2017 and 45% plan to continue their programs as they are. 41% want to increase the number of employees giving, although last year this figure was 60%, so there’s been a drop in companies’ intent in this area. Recent figures released from the ATO for the 2014/15 year show an increase in workplace giving donations by 34% over the previous year. This follows on from a 13% increase in 2013/14.

Lisa Grinham, CEO of Good2Give says, “Donation levels are increasing which is most definitely linked to giving being made easier using technology. 10% of employees now make workplace giving donations on their mobile. Companies who are offer employees our online interface have double the donor participation rates than those who do not. It’s pretty simple really – people want to give online - in a survey we conducted of 1000 of our workplace giving donors, 94 per cent said they want giving to be easy and that workplace giving is quick and easy.

Company matching employee donations is also a key driver to giving more. With 75% of companies now matching employee donations, the average donation when a company matches is $49 versus $31 when there is no matching. We’re also seeing an uplift in companies running workplace giving one-off appeals which is growing participation rates as this has not traditionally been a cornerstone of workplace giving programs – however it’s now so easy using technology.

Sharing experiences of those with successful programs, improving data on best practice, and ensuring uptake of leading benchmarking tools is the matrix needed for companies to realise the benefits of workplace giving in their company and starting reaching their targets.

It is an exciting time going forward, and wonderful to be working in partnership with LBG ANZ. Together we provide effective and transparent community investment and measurement outcome opportunities for companies.”

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Corporate volunteering is a real opportunity for business

Corporate volunteering is a real opportunity for business

Over 12% of respondents plan to start a volunteering program in 2016/17 and 44% will seek to increase participation levels with 30% keen to focus more on skilled volunteering. Contributions from companies made through volunteering continues to be a significant opportunity for companies to grow their positive impact on society whilst accruing significant business benefits. 13% of employees within LBG members volunteered in 2015 leaving plenty of room to increase participation levels.  Connecting volunteering to employee development remains an underutilised opportunity.

“Over the past 12 months, GoodCompany has seen a 143% growth in corporate volunteering. Bespoke unified workplace giving and volunteering platforms, as well as innovations such as volunteer alerts and volunteer vouchers, are the secret to driving engagement and participation in both skilled and team volunteering,” said Ash Rosshandler CEO GoodCompany.

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Community partners feel the impact of cuts to foreign aid

Community partners feel the impact of cuts to foreign aid

Of the respondents 86% indicated that Government cuts to foreign aid have not impacted on their community investment strategies. However, a number cited that cuts were negatively impacting their community partners.

“Cuts are not impacting our strategy but we have seem impacts on our community partners in the delivery of their programs” one survey participant indicated.

International humanitarian aid organisation CARE Australia’s Acting Chief Executive Robert Yallop said the Australian Government’s decision to proceed with a $224 million cut to this year’s aid budget was deeply disappointing.

“This year’s aid cuts will impact CARE Australia’s ability to execute our important programs around the world that bring lasting changes to women and girls and their communities. The Government’s refusal to reverse the final scheduled cut to the aid budget means Australia will become the least generous we've ever been with the lowest ratio of aid to the size of our economy ever. It is those most vulnerable who will bear the consequences of this decision. With record numbers of people forced from their homes through conflict and climate change, Australia should be doing a lot more.”

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Where does responsibility for CCI sit?

Where does responsibility for CCI sit?

Respondents were split with just under 50% indicating that their Board’s had direct responsibility for their community investments. We saw a shift in 2016 regarding the internal company responsibility. 68% of respondents reported that corporate community investment sits within corporate affairs departments, 17% in marketing/brand, 12% in human resources and the remainder in risk/compliance departments.

Wayne Burns, Director at the Centre for Corporate Public Affairs commented, “This data from LBG and its members concurs with research internationally that places governance of a corporation’s corporate community involvement and investment at the centre of organisational strategy. It aligns also with the Centre’s State of Public Affairs research and international research that places management of CCI in the function that is responsible for social political strategy and implementing it – corporate public affairs. Integrating management of CCI with stewardship of other critical stakeholder relationships – employees, governments, regulators, civil society – is smart management and smart business.”

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The future challenges

The future challenges

Respondents were asked to share what they saw as their key challenges for CCI in 2016/17. A number of themes emerged around leadership, communication, impact, innovation and the business case which are encapsulated by the following comments from respondents:

“Continuing to demonstrate the value of community investment to the Board and the benefits for our organisation and members.”

“Finding other ways to make a genuine impact to community development issues other than purely financial.”

“Employees and the public hearing the story of our investment.”

“Introducing new, innovative concepts into our CI offering.”

“Measuring and quantifying impacts to show ROI.”

Respondents indicated that impact measurement (65%) and telling their story of CCI investment (53%) were the areas they would most likely need help with in 2016/17.

2016 LBG Results Overview

LBG is a global network of companies who apply LBG's measurement framework to enable them to measure and report their contribution to the community.

The results of the 11th LBG benchmark in Australia & New Zealand are presented here, along with the previous ten years of reported data. Click the switch to 'global' to view a comparison against LBG averages globally.

How Members Contribute

i
The value of cash as a percentage of the total contribution decreased by 4% however the actual cash contributed as a whole has remained steady. The number of volunteer hours contributed by employees in work time was 50% lower than in 2015. However, the percentage contribution was able to remain steady due to more senior employees volunteering their time at a higher rate. In-kind contributions rose by over 5% and management cost contributions were unchanged.

Contribution as a % of
pre-tax profit

0.56%

Why Members Contribute

i
Whether companies are making a one-off
charitable donation; a strategic longer-term community investment; or a commercial initiative that delivers community benefits, each contribution is driven by a different motivation. Community investments took a larger slice of the pie this year increasing by nearly 4% showing greater focus from members on pursuing strategic long-term partnerships, with the move away from charitable donations continuing to fall as in previous years. Commercial initiatives remain unchanged.

Contribution as a % of
total revenue

0.14%

What Members Support

i
Social welfare remains the dominant
beneficiary of member contributions this year increasing by a further 3%. Support for health initiatives has been boosted again resulting in figures being the highest percentage in this area and leading to a ten-year high. Arts and culture initiatives received double the support this year, however it is worth noting this is largely due to one significant donation. It was pleasing to see that the percentage allocated to the ‘other’ category dropped from 15% to 8% as focus areas and a more strategic approach have become clearer to members.

Contribution per
employee

$831 i
Community contributions as a percentage of pre-tax profit (EBITDA) decreased from 0.61% last year. As a percentage of total revenue, contributions increased, and the average contribution per employee climbed to the highest figure since LBG reporting began. This can partly be attributed to an increase in contributions but is mainly the result of a smaller employee pool.

*Please note totals may not equal 100% due to rounding.
^yearly average conversion rates have been used to convert dollar figures to AUD

LBG'S Vital Statistics: Contributions

In 2016, the total contributions by LBG members increased to over $236m.


This is a figure that is consistent with 2013 figures after seeing a two year drop in 2014/15. The financial services sector represents the largest contributor, a trend observed over the majority of reporting years.

Total Contributions

Contributions by Sector

Employees

The percentage of members offering workplace giving opportunities increased this year, with 71% of members now offering their employees programs, an increase from 65% of members in 2016. This is the highest level we have seen so far. Nearly all members that offer workplace giving programs are now matching employee contributions to some extent.


The average participation rate by employees dropped by nearly 50% to 4%. This is a clear indicator that it is not enough to simply have a program accessible to employees but that it needs accompanying support such as a communications strategy to keep people informed of their employers’ commitment to workplace giving.

Volunteering participation remains steady with nearly 14% of employees taking paid time off to volunteer, though the average number of hours each contributes has decreased from 15 to 11 hours.


Volunteering


14%

Employees volunteering in company time


417,469

Working hours contributed


11

Average of hours donated per employee


$22m

Value of time


Workplace Giving


71%

Members offer workplace giving programs with over 86% of these matching donations, this matching is up 15% on last years’ results.


4%

Members reported that the average staff participation rate fell from 7% to 4%, despite more organisations offering workplace giving programs.


10,844

Staff donating figures halved from 2015 coupled with the 25% decrease in FTE’s at member organisations.

LBG'S Vital Statistics: Achievements

Members continue to be a catalyst for driving funding from third parties such as customers, government or their own employees. This additional funding is called 'leverage'.

Total Value of Leverage

Where did the Leverage come from?


$12.6m

In total, employee donations (WPG and other direct employee leverage) doubled this reporting year


$1.7m

Average funds leveraged per reporting member increased by 25%


$98m

Estimated revenue foregone for community benefit is up by more than 15% over last year’s numbers


Increasing use of the LBG social impact methodology assisted members to report the outputs and impacts of their contributions, such as the number of people reached or supported, and benefit they experienced as a result.

01

How do people benefit?

Using the LBG impact map of three broad categories of change, members can identify the impact on beneficiaries as a result of their programme.

Total beneficiaries

 

76% positive change in behaviour/attitude
86% developed new skills or increased personal effectiveness
86% improved quality of life and/or wellbeing
02

How do organisations benefit?

Support provided by companies can benefit charitable organisations in a number of different ways - from long term capacity building to ad hoc financial support. The range of impacts is show below.

Supported organisations

 

67% improved existing/delivered new services
30% reached/spent more time with clients
44% improved management processes
56% increased their profile
48% took on more staff or volunteers
03

How do employee volunteers benefit?

Companies increasingly strive to measure the value of CCI to the business and its employees. The LBG model measures the impact on employees across three key areas of benefit.

Employees involved

 

5% improved job-related skills
10% experienced a personal impact
14% positive behaviour change
*The impact data on this page represents achievement by those companies capturing LBG impact data on their programs. Percentages for impact categories do not amount to 100% as beneficiaries often experience a number of benefits as a result of an activity and therefore could be included in more than one category – although are not double counted in the overall total beneficiaries.

Member Overview

 

Reporting members

 

Members who reported in both 2015 & 2016

 

Average of full time staff dedicated to Community Investment activities

Member representation by

Sector in 2016 Benchmark