Are some Australian corporate stingy when it comes to contributing to the various tsunami appeals? Don BoredWalk and Greg Bowyer argue the toss.
According to a story in The Australian today (but not on the web) corporate donations have totaled $9.4 million with the promise of $1 million from Dick Smith via his appearance on Nine’s A Current Affair Tuesday night.
That corporate contribution, of say $10 million (to cover smaller amounts not noted by the media) compares very unfavourably with the $85 million donated by individual Australians and smaller companies via the various appeals of The Red Cross CARE, World Vision etc etc.
So is that cheap? After all World Formula 1 motor racing champion, Michael Schumacher has donated around $13 million ($US10 million) in a German telethon.
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Sport has been active in raising money and gathering donations a trend that will continue for weeks in Australia – Fox Sports has more here.
Yes, Schumacher and some of these sports people and groups are wealthy. Schumacher earns a reputed $US60 million or more a year driving his very fast cars, but his is still a very large donation. US actor, Sandra Bullock has also donated $US1 million (and gave a similar amount to a US appeal after September 11).
By that yardstick she’s as generous as News Corp which has donated $US1 million. Yes, again she’s a highly paid actor, but then Rupert Murdoch was paid the best part of $US20 million last year.
And Rupert Murdoch’s Fox Studios is a wealthy organisation. It may have helped Bullock earn the sort of money to afford a $US1 million donation, but you can bet that Fox earned a lot more and makes tens of millions out of films and DVDs and TV sales to the regions affected by the tsunami.
There is the argument advanced by some that companies should be wary in donating because they are using shareholders’ money. Here’s a version of that argument from The Age’s website – Private donors assume role of good corporate citizen
That’s a convenient cop out. How much money does Telstra ($100,000!) spend on sponsorship (using shareholder funds) in sponsoring Telstra Dome in Melbourne, Telstra Stadium in Sydney and the NRL premiership?
How much money does the telco also spend flying executives to corporate events around the country like some of the functions CEO Ziggy Switkowski and some others have been seen at (the Leuwin Estate concerts in the past).
Is this the influence of newish chairman Donald McGauchie, a hardliner and social conservative if ever there was one, as his performance on the socially ignorant James Hardie board has shown.
Yes companies have to spend money carefully but with the growing emphasis on ethical and responsible corporate administration, you’d expect supporting tsunami appeals would be a no-brainer.
Take Westpac, the bank that has done more to advance its reputation through the so-called triple bottom line approach that says that corporate responsibility is as important as bottom line financial management. And the community interest is one of these major non-financial factors.
So far Westpac has stumped up $100,000. Its earnings last financial year were well over $2.3 billion.
Likewise St George Bank, so far a donation of $100,000 from a bank that earned more than $700 million last financial year, is not enough.
The banks have also been forced into not charging fees on credit card donations. They would view this as a ‘donation”, In a Pig’s Eye. The fees were dropped for public relations reasons. Companies will only donate more when their stinginess, relative or absolute, is highlighted.
What is more important, sponsoring sport (tennis anyone, Ford), cricket or Opera?
And where’s the cold hard cash from our media companies? Yes the three major commercial networks are putting the big concert and associated fund raiser to air on Saturday night from the forecourt of the Sydney Opera House. But how about donating all advertising revenue from that concert to the various appeals?
And Nine Network, we know you are televising the fund raising one day cricket match next week from the Melbourne Cricket Ground, but what about donating all the ad revenue from the day to some of the appeals?
So what seems to be the cut off for corporate generosity in the great tsunami appeal? A million dollars!
As evidence of this look at the way the Commonwealth Bank lifted its total donation from the initial $250,000 to a $1 million, including $250,000 of matching staff donations.
News Corp is giving a $US1 million, Fosters $A1 million, Qantas a similar amount.
Qantas was the first major corporate sponsor out of the blocks and deserves to be congratulated.
Finally if companies polled their shareholders they would find an overwhelming majority in favour of a generous level of donations. Many of these supporters would be large institutions who have their own plans (Hunter Hall for example).
After all can anybody put a value on the impact on a corporate’s image (carefully nurtured these days) from being seen to be tight-fisted or stingy?
It is in the interests of shareholders to donate to an appeal like this. Consider it another way of ‘nurturing the image and brand!
Why the corporate donations should be higher
By freelance journalist Greg Bowyer
Lonely Planet Publications must be feeling pretty alone in corporate Australia at the moment, having donated a generous $500,000 to the tsunami relief appeal. For a company whose revenue was around $75 million last year, and whose earnings will be directly threatened by this disaster, that’s a huge effort indeed.
Let’s contrast Lonely Planet’s contribution with that of the National Australia Bank, one of corporate Australia’s heavy hitters. On December 28th it set up a relief fund and promptly donated $100,000. Now I know it’s been a tough year for the NAB, but annual profit was still a tidy $3.5 billion. Its donation represents a microscopic 0.0003% of this amount.
But it gets worse when you consider that the NAB gave former CEO Frank Cicutto a $14 million golden parachute less than a year ago; its contribution to relieving a disaster affecting untold millions represents just 0.07% of the largesse lavished on one man.
These figures got me thinking about other corporate payouts in recent years and I wondered how much the companies which had found millions for their departing CEOs had contributed to the relief effort.
Remember the Commonwealth Bank’s $33 million parting gift to Chris Cuffe in 2003? It initially donated $250,000 to the appeal – 0.0075% of his payout.
Over the past few years BHP Billiton has paid golden parachutes of $30 million to Brian Gilbertson and $18 million to Paul Anderson before him. BHP has had a huge year in 2004 – but how much has it kicked in? There is no reference to any appeal or donation on its website. Even the beleaguered James Hardie found $9 million to send-off its CEO Peter MacDonald in September, but there is no sign of a
donation yet. Then there’s Telstra: with a profit of $4.1 billion, it can only find $100,000 for the relief fund, although it had no problem recently handing $2 million to outgoing CEO Ziggy Switkowski .
And then there are the hundreds of other large Australian companies, most of whom have had bumper years in 2004. What have they contributed thus far? You know the situation is serious when the PM has to publicly appeal to corporate Australia to do its bit.
The growing corporate practice of massive payouts to former CEOs contrasts starkly with widespread corporate indifference in the face of overwhelming human need. You have to wonder where our corporate culture is heading and what values are driving these monoliths. They are only too keen to reap the financial advantages of globalisation, but seem to have successfully insulated themselves from the wider social and moral responsibilities which accompany corporate power. Their non-response to this unprecedented human catastophe
stands in shameful contrast to the stunning generosity of ordinary Australians over the past ten days.
If the corporations refuse to take their social responsibilities seriously, shareholders must seize the moment and force their collective hands. Lonely Planet has shown what’s possible; the big corporate players must follow its lead and start making some serious donations. Good corporate citizenship demands it – and thousands of lives are depending on it.