Wednesday, 31 January 2007

TESCO AND ITV are failing their staff and their staff’s favourite charities according to a new ‘ethical bonuses’ survey. Alongside food conglomerates Associated British Foods and SABMiller, the companies offer virtually no incentives to help good causes. Tesco even manages to reduce the effectiveness of staff’s regular giving.

‘Ethical bonuses’ come in two forms: topping up employees’ donations to charity and giving paid time off for volunteering. Many companies surveyed in the Ethical Bonus Index 2007 matched regular donations and covered their staff’s Payroll Giving administration costs (around four per cent). Tesco however offers no incentives for regular giving and even fails to cover the administration costs of its Payroll Giving scheme – so staff have to pay them. Only fundraising events for the company’s own charity are supported with a 100 per cent top-up.

Intelligentgiving.com researcher Neill Ghosh said: “As far as ethical bonuses are concerned, Tesco is in the Dark Ages, way below average. Its fixation on one-off donations to its own high-profile charity looks more like great PR than a serious incentive to staff to help charities. And Tesco employees who want to give regularly should avoid their company’s payroll giving scheme and give by direct debit instead – otherwise they lose a percentage in administration costs.”

Aviva (aka Norwich Union) leads the field with a comprehensive and generous ethical bonus package of top-up donations and paid volunteering time.

Intelligentgiving.com’s Ethical Bonus Index 2007 (PDF, 44k) shows two employers taking a lead on top-up donations: Northern Rock (2nd) and Royal Bank of Scotland (23rd=). They effectively triple donations their employees make. Ghosh said: “These top-ups are exceptional, and the ramifications are huge: if every RBS employee gave £10 a month to charity, then the company would top up annual donations by £25.2m – a figure that would, for example, pay for mental health care charity MIND.”

Meanwhile the BBC (33rd=) and Aviva offer an exceptional six days’ paid volunteering per year. Ghosh said: “Again, these are extraordinarily generous allowances. If the 55,900 staff between them took up this option, then a team of 100 people could work for charity for 13 years.”

Ghosh said: “’Ethical bonuses’ are the new kid on the benefits block. The concept, long entrenched in the US, is finally becoming mainstream here, but there’s still a very wide range in performance.”

The Ethical Bonus Index covers 67 of the country’s highest-profile employers – taken from the FTSE 100 plus a handful of other well-known names companies including PricewaterhouseCoopers, Virgin and Orange. It covers over 1.5 million employees and paints a picture of a major trend in corporate responsibility.

A further 46 companies were contacted, from AstraZeneca to Unilever, but they couldn’t or wouldn’t reveal their policies despite numerous calls for information.

Several companies have a long way to go to catch up with the average. Those in the retail and manufacturing sectors especially come close to the bottom of the Index, offering no solid incentives to staff to give to charity or to volunteer. Sainsbury’s is the exception among the supermarkets, offering to match donations earned by employees from sponsored events - not surprising considering the long philanthropic tradition of the Sainsbury family.

Ghosh said: “But the trend is clearly one of increased generosity and formalisation of policies. Companies realize that giving ethical bonuses improves morale and costs relatively little – and the schemes, encouraged by government grants, are becoming popular. Many companies we spoke to were in the process of finalising their policies – and we predict that all big companies will have ethical bonus schemes in place by this time next year.”

Ends

> Our article, Get the boss to help your charity
> Our Ethical Bonus Index 2007 (PDF, 44k)