Large companies are focusing more on in-kind donations, which fit their own business objectives, according to a report by Deloitte, the business advisory firm.

More than just giving says that while corporate responsibility is still essentially philanthropic, it is becoming increasingly strategic. Factors which are being taken into account include the need to improve employee retention, attracting new markets and enhancing reputation.

Bob Thust, head of corporate responsibility at Deloitte, commented: “The underlying trend is very much that corporates want to get more involved  through the provision of skills and expertise as well as through traditional forms of philanthropy.

“The bottom line is that there is considerable opportunity for longer-term and more strategic partnerships between corporate and third sector organisations which deliver significant impact and benefit on both sides of the relationship.”

The research, conducted in support of the Government’sYear of Corporate Philanthropy, examines trends and spending across six sectors within the FTSE 100. These are technology, media and telecommunications, professional and legal services, consumer and retail business, energy, infrastructure and utilities, pharmaceuticals and financial services.

One example in the report is an unnamed supermarket chain that focused its corporate responsibility (CR) programme on projects to source the freshest food, to train its employees to the highest standards and to promote gardening and cooking in schools.

CR programmes are increasingly used to develop relationships with government, suppliers and customers in key markets, the report finds. For example, companies in the energy, infrastructure and utilities sector often invest in improving sanitation, reducing risks to employees and climate change projects. The report says: “Global reputation management is at the heart of this work but improving relations with foreign governments and communities is also a key objective.”

There is also a strong link between CR activity and specific industry challenges. For example, airlines have invested heavily in carbon reduction schemes in response to the pressure from customers to offset the negative impact of their business.

 The report recommends that corporates become even more strategic by:

• creating subtle links between business objectives and community investment work to help the expansion into new markets
• energising staff through a sustained campaign to promote volunteering and giving
• concentrating on what they do best in terms of offering expertise to communities.

 As well as in-kind donations, the UK’s largest companies collectively make cash donations of more than £1.4bn a year. However, the report quotes research among 450 senior business leaders, published by The Social Investment Consultancy, which suggests this figure may drop by one third by the end of the year.

The report states: “The blend of cash and in-kind benefits is likely to become more diverse as economic conditions remain volatile.”

This trend could put even greater pressure on philanthropists. The top 100 donors already give around £2.49bn per year, far outstripping corporate donations.

Download a copy of the full report More than just giving: Analysis of corporate responsibility across UK firms