What is corporate philanthropy and why does it matter?

Four reasons why corporate philanthropy benefits your business

Alongside helping charities drive positive change, giving brings real benefits back into your organisation too and can help you:

1. Build stronger relationships beyond your business: Corporate philanthropy opens the door to long-term relationships with charities and community organisations. These partnerships can give you deeper insight into social issues and help connect your business to wider networks with shared values.

2. Earn trust with customers and the public: Up to 77% of the public believes businesses have a duty to contribute to their communities. Regular, thoughtful giving shows that your organisation takes that responsibility seriously.

3. Engage and motivate your employees: Many people want to feel proud of where they work. When your giving aligns with your people’s values, you can create a shared purpose within the workplace. Businesses that prioritise a culture of generosity attract talent, see staff motivation rise and create a stronger sense of community.

4. Strengthen customer loyalty over time: Consumers, particularly younger generations, are more likely to stick with brands that reflect their values. Meaningful social action can deepen emotional connection, sustain engagement through uncertain market conditions and generate greater brand advocacy.

The impact of corporate philanthropy on charities

For charities, the way businesses give can be just as important as how much they give.

Reliable funding helps charities cover core costs, plan ahead and respond when demand increases. Our Corporate Giving Report 2025 found that eight in ten charity leaders see financial sustainability as their top challenge. Without predictable income, many are forced into short-term decisions that limit their ability to help people over the long-term.

Corporate philanthropy can help change that. Regular support allows charities to invest in their people, strengthen their organisation and reach more beneficiaries. And the impact goes beyond funding alone: your support can raise awareness of the community challenges your business is helping to overcome, rally employees around meaningful causes, and inspire other organisations to join you in making a difference.

To achieve these outcomes, it helps to choose an approach that aligns with your goals, resources and culture. Below, we have outlined a range of effective ways to structure your giving with purpose and confidence.

Six practical ways businesses can give

There is no single approach to corporate giving. The most effective programmes are tailored to your business’s size, culture and goals, and can contain a mix of models.

Here are some examples to get you started:

• Direct giving: Donating unrestricted funds directly to charities, either regularly or as one-off gifts. This gives charities the flexibility to use money where it is needed most, especially when circumstances change.
• Matched giving: Matching your employees’ donations, either pound-for-pound or up to a set limit. This can boost the impact of individual giving and shows employees that their causes matter to the business.
• Grantmaking: Running structured, longer-term funding programmes focused on specific issues such as education, health or the environment. This approach works well when you want to make a sustained difference aligned with your organisation’s purpose.
• Social investment: Providing charities with repayable finance on affordable terms. When loans are repaid, the money can be reused to support other organisations, helping charities grow while maintaining long-term sustainability.
• Volunteering: Giving employees paid time to volunteer, whether that’s one day a year or more. This can strengthen community links, build skills and boost morale – particularly when combined with financial support.
• In‑kind support: Donating products, services or professional expertise such as IT, legal advice or marketing support. This allows businesses to contribute what they are already good at, without relying solely on cash donations.

Why giving at least 1% of pre-tax profits matters

One simple way businesses can make their giving more meaningful is by committing to donate at least 1% of their pre-tax profits.

If all FTSE 100 companies and just a quarter of wider UK businesses gave at this level, they could collectively contribute an estimated £9.06 billion. That funding could support essential services like emergency relief, mental health care, education and community development, while also helping charities plan for the future.

In 2024, 11 FTSE 100 companies, including Sainsbury’s, Tesco, GSK and AstraZeneca, consistently met the 1% threshold over the past three years, showing that purposeful giving is achievable even in challenging conditions.

The strength of the 1% approach is its stability. Because the commitment is tied directly to profits, giving becomes part of core business planning, making it a more stable and resilient. It also offers a clear benchmark, enabling organisations to track progress, compare performance with peers and demonstrate growing ambition.

“At a time when charities face declining donor numbers, rising demand, and shrinking resources, a unified commitment from businesses to give just 1% of their pre-tax profits could help revitalise frontline services, sustain vital community support, and build long-term resilience in the sector."
- Philippa Cornish, CAF’s Client Relations Director.

How leading businesses are putting philanthropy into practice

Many organisations are already showing how corporate philanthropy can turn profit into positive change.

Vodafone Foundation

Vodafone Foundation, the charitable arm of the global telecoms brand, donated 2.56% of its pre‑tax profits to programmes in 21 countries that support emergency response efforts, digital skills for older people and STEM education for young people. Partnering with Save the Children and UNHCR extended its reach and helped it to scale initiatives like Instant Network Schools — a free digital learning programme that has already supported 378,000 children and 6,800 teachers in areas such as refugee camps.

Smiths Group Foundation

Smiths Group, a global engineering leader, launched their foundation in 2023 with a £10 million fund to align charitable giving with its company’s purpose of engineering a better future.

By involving their people in decision-making, it builds a strong sense of ownership and engagement while delivering impact across regions.

Spirax Sarco

Spirax Sarco has committed £15 million to global education initiatives by 2030, to improve diversity in engineering, tackle poverty through education and remove barriers to female learning. To achieve a long-term impact, they developed a tailored evaluation framework to consistently report on the difference they make and inform future giving plans.

Together, these examples show that when giving is aligned with business purpose and sustained over time, it can create meaningful benefits for communities and for the organisations themselves.