Morning Future Corporate Giving In Italy 2018
Guiding Trend 16 January Jan 2019 0920 16 January 2019

How good are Italian companies? 0.32% of revenue (and that’s not bad!)

Last year the percentage of donations was anchored at 0.12% in line with international averages (the United States in the lead). How do you explain this boom? The analysis of the second "Corporate Giving in Italy" report.

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How good are Italian companies? To answer this question, pick up the second edition of the "Corporate Giving in Italy" report, promoted by Dynamo Academy with the scientific contribution of Sda Bocconi Sustainability Lab and the University of Milan, and the collaboration of the international Cecp network and supported by PwC and Newman's Own Foundation.

The big picture

To frame the data, however, we need to broaden our gaze and consider other analyses. According to the VIII Report on the social commitment of companies made by Observatories Socialis and Istituto Ixè, 84% of the 400 companies interviewed chose to implement social and environmental responsibility initiatives (compared to 73% in 2014), with an investment of 1,412 billion euros, more than double ten years ago. This trend is also confirmed by the latest estimate of the Ernop (European Research Network on Philanthropy), which places Italy in the top five of the countries where companies supply more resources with philanthropic purposes, with 1 billion total donations, after Germany ( 11.2), France (2.8), and the United Kingdom. (2.7) and the Netherlands (1.4). A result that the Dynamo Academy report, edited by a group of researchers led by Clodia Vurro, has the merit of detailing in depth. The study analysed the giving of 94 medium / large companies, which have a turnover of over 209 billion euros, count 510 thousand employees and represent 12% of GDP (data for the 2017 fiscal year). Within the sample, 45% of the subjects are Italian, 55% are Italian branches of international groups; 30% are represented by listed companies. «This is certainly a partial sample, but able to give a reliable picture of the trends that move the strategies of a medium-high range of companies operating in Italy», Varro anticipates.

Made in Italy

In 2017, the 94 companies considered allocated 191.14 million euro to Third sector entities, provided in the form of 88% cash contributions from companies, 5% from foundations of companies and 7 % consisting of contributions in goods and services. The median value of corporate cash contributions was € 240,735, while that for corporate foundations was € 214,250. Finally, € 9,956 is the median value of donations of goods and services. The direct involvement of companies is therefore growing, compared to business foundations. In the previous survey, the money donations provided by the foundation of reference were more than twice the median value of the cash contributions made by the company. The greater engagement of the companies is also evident from the median value of the donations of the Italian medium-large companies in relation to the turnover, which stands at 0.32% (equal to 2.5% of the income before taxes). Last year, to make a comparison (although this year's audience numerically is worth almost double compared to 2017), aggregate giving represented 0.12% of the total turnover of the companies of the sample (in line with international data, the United States at the top) and 2.2% of pre-tax profit.

The greater engagement of the companies is also evident from the median value of donations of Italian medium-large companies in relation to turnover which stands at 0.32%

Impact sectors
As for the sectors of intervention: while remaining at the top three, culture, sport and entertainment recorded a decrease of about 10% compared to the previous survey, from 28,19% to 19,71% of the total giving. On the other hand, there is an increase for third sector entities dedicated to social assistance and civil protection (from 14,59% in 2016 to 18, 64% in 2017). Support for entities in the healthcare assistance area takes third place.

Cash disbursements continue to prevail, accounting for 93% of total giving. Compared to previous surveys, there is an increase in donations of goods and services, going from 3% to 7% of the total for 2017. However, this is a small percentage compared to the allocation by type of giving of the US sample. American businesses seem to favor a more diversified approach, with a value of donations in goods and services standing at around 18%. As mentioned, the value of cash disbursements granted through a business foundation is reduced, which, despite the different composition of the sample, continues to be present in 30% of cases. Even with different dimensions, this is a dynamic that is also taking place at an international level, where there is greater recourse to direct disbursements from the company.

Trends

But how should these numbers be interpreted? These are the highlights of Serena Porcari, CEO of Dynamo Academy. First point: «The trends reveal the tendency towards a professionalization of giving, with a growing managerialization of corporate philanthropy whose managers report, in more and more cases, directly to the highest corporate positions, CEO or general manager». Secondly «the success and sustainability of philanthropic initiatives depend on the support and active participation of the company leadership, rather than on the contingent economic results».

Serena Porcari, CEO di Dynamo Academy

We are in the presence of a growing managerialization of corporate philanthropy where managers report, in more and more cases, directly to the highest corporate positions

«There is a desire to make greater use of the recognition of the corporate brand and to connect the philanthropic choices more closely with business strategies. The creation of a business foundation, in fact, carries the risk of being perceived and operating separately from the company, making social strategies less incisive ", echoed Mrs Vurro. She adds: "In principle, I think we can say that the tendency to manage the business of giving is now more responsive to the management of the" consent "on the territories, rather than purely marketing necessities".

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