The number of corporate foundations in England and Wales has risen to 140, up from 126 in 2006, a report from consultancy Corporate Governance says.

The financial services sector leads the way in terms of number of foundations and income, according The Foundations of Business: The Growth of Corporate Foundations in England and Wales. However, most new foundations have been established by a sector that did not feature in Corporate Governance’s study in 2006: clothing retailers.

Amanda Jordan OBE, co-founding director of Corporate Citizenship said in the foreword: “Stakeholders expect companies to not just talk about responsibility, but demonstrate through their actions that being good corporate citizens is part of everyday activity.  All this might lead us to expect that corporate foundations – the separate, ‘outsourced’ partner of the company – would be fast going out of fashion. Critics have alleged that they can be a PR-fuelled distraction from the real need to make businesses more responsible.”

The report says that corporate foundations provide value to society and businesses in a number of ways. They act as a public commitment and a forum for innovation as well as an opportunity to provide staff with inspiration and personal development opportunities, often through volunteering. 

The Foundations of Business continues: “Corporate foundations permit the founding company to ‘ring fence’ and protect its community contributions.  They enable a degree of independence and autonomy, though as our findings reveal, real independence is rare in reality, with senior staff of the founding business  taking trustee roles and lower level staff volunteering in funded programmes.”

Although the average income of corporate foundations has fallen from £1.75m in 2005 to £1.68m in 2010, with a further fall to £1.46m in 2011 likely, average spending has increased by around 14% over the same period, from £1.42m in 2005 to £1.62m in 2011. Donations have also increased, from £1.34m in 2005 to £1.86m in 2011.

The Foundations of Business: The Growth of Corporate Foundations in England and Wales is available to download free of charge.