Corporate giving in Australia is undergoing a transformation. According to Strive Philanthropy’s GivingLarge research from 2024, corporate donations have surged by approximately 30% in the past five years. But it’s not just the numbers that have shifted; the very landscape of Australian corporate philanthropy itself is evolving.

Businesses today are navigating a complex intersection of purpose, profit and accountability. Consumer expectations have skyrocketed and more people than ever are demanding that companies become purpose driven. The steep rise in ESG (environmental, social and governance) reporting requirements have also put more pressure on businesses to be accountable and transparent about their practices. As a result, corporate philanthropy in Australia is now more strategically aligned with broader business objectives than ever before.

This shift comes at a time when global challenges such as climate change, poverty and humanitarian crises are increasingly global in nature and on the rise. But what does this increase in corporate giving and impact investment mean for international development or the funding of urgent international causes?

At the end of 2024, AIDN set out to speak with a broad cross-section of Australian-based businesses to determine what international giving currently looks like in this space and how AIDN might foster greater engagement in future. On one hand, it was found that there are several obstacles currently facing Australian businesses when it comes to international giving. On the other hand, it was also clear that there is a healthy appetite to make a global impact.

From social value to social compliance

The first key finding of AIDN’s research project was that ESG frameworks have become central to how Australian companies define and deliver their social impact, particularly for those in the publicly-listed arena. Executives, boards and shareholders are scrutinising metrics with greater intensity, reshaping the way businesses approach philanthropy. 

Yet, in some instances this may have the opposite of the desired effect. For some companies, the space for creating pure “social value” is shrinking, replaced by efforts to meet ESG obligations that tightly align with business strategy. This can inhibit businesses supporting creative solutions to the kinds of complex social problems in hard-to-reach areas which international development nonprofits seek to address.

It was also found that new sustainability reporting legislation and the Taskforce on Inequality and Social-related Financial Disclosures (TISFD) will amplify scrutiny on sustainability and social outcomes, driving more targeted, measurable approaches to corporate giving. While most of us in the business and NPF sectors would agree tracking outcomes is essential, anecdotal evidence from AIDN’s research project suggests that initiatives tackling systemic issues with longer term, harder-to-measure outcomes are being ditched in favour of short-term, tangible wins for reporting purposes. 

This mindset creates tension between achieving transformative social impact and managing predictable outcomes in communities overseas where meaningful change can take years. In this context, time constraints also play a significant role. Many corporate foundation leads are frustrated with having limited bandwidth to be more innovative in their giving or develop a comprehensive understanding of emerging social issues, particularly those not on their doorstep.

Balancing risk and reward in partnerships

The second key finding was that in today’s business climate, corporate giving is a cautious endeavour with risk being high on the agenda in board rooms nationally. Risk-averse businesses are less likely to take on the perceived risk of international giving than domestic. Those who do engage in global giving often favour well-established, recognisable global nonprofit brands, diminishing support for locally-led or lesser-known international organisations. Companies seeking to support locally-led initiatives abroad also cited finding the right partners as their biggest challenge.

Moreover, respondents are focused on issues in Australia’s own backyard, such as the cost of living crisis, gender based violence, indigenous health gaps and natural disasters, and are encouraged by their executives to prioritise local initiatives and disaster relief rather than looking internationally. While some are exploring ways to positively impact overseas communities connected through their supply chains, this often takes the form of ethical value chain sourcing rather than philanthropy.

Volunteering as a pillar of employee engagement

The third key finding was that many corporates are choosing nonprofit partnerships that offer volunteering opportunities for their employees. This strategy creates dual benefits: enhancing employee satisfaction while building stronger community ties. 

Frankly, it’s hard for international nonprofits to compete with the engaging in-person experiences that domestic NFPs can offer to Australian corporates. With limited ability to offer employees these experiences at an acceptable price-point compared to their domestic counterparts, international organisations are having to get creative or miss out. 


Image: Unsplash/Terry Boynton Nepal.

What can be done?

Despite these challenges, it is clear that now is the time for Australian business leaders to enact true leadership, step into the international development space and join trailblazers already driving social impact. The recent USAID funding freeze reinforces just how much of a role Australia could play in this space. But how can we bring about this change?

This process has to start at the top. Those managing corporate giving need to be given the time and space for leadership, the appropriate resources, full endorsement and respect from the Executive to be impactful in their roles.   

Smart businesses will need to “play the advantage”. As Sarah Downie, CEO of Shared Value Project, testifies: the magic happens when business strategy and social value stars align. Companies which explore how they can be both profitable and purposeful reap the rewards of competitive advantage through better supplier relationships, customer loyalty, brand recognition and employee engagement. 

Corporates also need to take a global perspective. Or more precisely, a broader geographic view of who a company’s stakeholders are can shore up long-term sustainability. Communities near their offices or operations, areas where their employees live and regions tied to their customer base or supply chains all offer potential opportunities for businesses to build true societal value. A narrow view of ‘community’ or a tokenistic offering in those communities is less likely to be meaningful to the people on which a company ultimately relies.

Corporates can also focus on a dual outcomes strategy. Throughout the AIDN research project, it was regularly emphasised that the most impressive heads of corporate foundations have effectively sourced initiatives with some shorter-term wins (execs are happy) within a long-term vision (meaningful impact can be achieved). Coupling this approach with upwards education of business leaders through some great story-telling and case studies over time, has been a successful strategy for those looking to shift management perceptions about reporting metrics. 

And finally, businesses should think about navigating how to reduce risk without reducing impact. Naturally, there is perceived risk in the unfamiliar. Some respondents shared how they had successfully engaged international experts to help connect them with some inspirational locally-led NGOs, making the due diligence process less time-consuming and more robust. Others had turned to their counterparts in other companies who had already done the hard yards to uncover thriving overseas initiatives. Although it can be hard to find the time to connect with others, many heads of corporate foundations interviewed for this project felt the potential insights are worth it. 

The path forward

If Australia wants to be a leader in addressing urgent issues globally, from climate change, to gender equality to reducing poverty, then engaging and fostering more and better giving from corporate Australia is a key part of the puzzle. However, to do this effectively, Australian corporations must balance risk with creating social change, compliance with creativity and short-term metrics with long-term impact.

For leaders, this means fostering a culture that integrates philanthropy into broader ESG goals while remaining open to innovative solutions and underrepresented global causes. By focusing on thoughtful partnerships, embracing purposeful giving and aligning philanthropy with the heart of their business strategy, companies have the opportunity to only meet today’s demands but also shape a future where business truly serves society on a global scale.

If you would like to connect with other businesses with an interest in international giving, please get in touch with us at AIDN www.aidnetwork.org.au

 

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Rosemary Conn’s career has spanned the corporate, nonprofit and philanthropy sectors as a consultant, CEO and board director. Recently, she has spent a few months working with the AIDN team, engaging with a cross-section of business representatives who have generously shared their insights to feed into the AIDN research project.

Feature image: Unsplash/Timon Studler