A recent study found that British insurers are donating money to charities for altruistic reasons, yet their charitable partners are sceptical about their motives.
According to a new survey conducted by specialist charity insurer Ecclesiastical, 65% of charities and voluntary organisations, the overwhelming majority, believe that the primary motivation for financial services businesses to partner charities is to improve their corporate image. Only 1.4% of charities questioned said they believed financial services businesses were motivated by a genuine desire to make a positive difference.
The survey also asked charities to rank the insurance sector’s degree of generosity to charities compared with other industries. The majority of respondents (40%) said insurers were ‘average’ while the next largest group (23.2%) said insurers were ‘below average’.
The figures were revealed by Michael Tripp, Ecclesiastical’s Group Chief Executive, who was speaking at the British Insurance Summit this week in London. Mr Tripp said:
“This is certainly a healthy dose of reality for insurers and financial services businesses. While we are keen to emphasise our worthy reasons for partnering charities, it’s clear the charities themselves are far from convinced and are sceptical about our claims. We may genuinely want to give something back to society, but from the charities’ perspective, we’re often doing this to improve our image and customer perception. That’s a deeply worrying state of affairs.”
Asked which type of financial services businesses they blamed for the recession, charities named banks as the main culprits with building societies ranked second most culpable. Insurance companies attracted the least blame out of the financial services organisations.
The study also found that 95% of charities believe the recession is forcing charities to evolve rapidly in order to survive.
“Charities are changing – and so is the insurance sector’s relationship with them,” Mr Tripp told his audience. “The UK’s charities are engaged in a struggle for survival and, over the next five years, they’re going to evolve rapidly. The challenge for the insurance sector is for our relationship with them to evolve too.”
Mr Tripp described how new thinking in areas such as social enterprise and shared value was changing the charity and voluntary sector and argued that financial services businesses had to grasp these concepts and integrate them into their business models.
In his speech, Mr Tripp outlined how the recession, which was triggered by the behaviour of the financial services sector, was reducing funding for charities, thus leading to a wave of mergers, consolidations and closures. With the relationship between financial services businesses and their charitable partners already strained, the risk, he argued, is that a greater gulf will open up as the charities evolve rapidly in order to survive. 26% of charities are currently considering merging or consolidating with another charity, while 6% are considering downsizing or closure, he said.
Businesses also need to be prepared to donate more than just money, Mr Tripp explained. 47% of charities surveyed said they wanted financial services businesses to donate a mixture of money and volunteer time/skills while 36% said that professional advice and support was also valuable. Mr Tripp said: “What we need to do is move away from the old charity-and-donor relationship to something based on true partnership. That’s the kind of relationship that’s going to prevail and prosper in these difficult times.”
In a study conducted by Ecclesiastical last year, 53% of charities said that they felt financial services organisations had a moral duty to offer more donations and support following their role in sparking the economic recession.
Independent research company FWD surveyed 142 UK charities and voluntary organisations on behalf of Ecclesiastical during August 2011.
During August of 2011, research company FWD surveyed 142 UK charities and voluntary organisations on behalf of Ecclesiastical.
