In Australia, the charity and not‐for‐profit sector makes up a $55 billion industry owing to Australian tax payers’ generous values and billions of dollars in tax concessions. There are a plethora of registered charities for Australians to choose from when electing to ‘dig deep’ — in 2016 there were more than 54 000 registered charities.

Many corporations that subscribe to the quadruple bottom line of being accountable for their financial, environmental and social performance, and staff wellbeing want to give something back and so make donations to one or more of these registered charities. McDonald’s sponsoring of Ronald McDonald Houses is a well‐documented example of a business donating to a worthy charitable cause. Ronald McDonald Houses are ‘attached to major women’s or children’s hospitals and provide a home away from home for seriously ill children and their families’. Notwithstanding attacks on the fast‐food chain for contributing to unhealthy eating habits and obesity, it does provide a good example of how a business can help a worthwhile cause.

But how do you decide upon what is a worthwhile charity? Given that it is such a huge industry in Australia and elsewhere in the developed world, aspersions are sometimes cast and questions raised about how much money actually gets through to the needy once salaries, administrative costs and government commissions have been deducted. For this reason, the alternative presented by Richard Branson’s Branson Centre for Entrepreneurship is an attractive one. Taking as its springboard the misery caused by unemployment, the charity provides seeding loans to small businesses in townships in developing countries. While this is not a brand new idea — the Nobel prize‐winning Grameen bank was founded in 1976 to give microloans to impoverished Bangladeshis, effectively founding a business on corporate social responsibility (CSR) principles — Branson says:

For too many years we’ve been trying to solve the world’s issues by pouring trillions of dollars into aid. While this has been (and still is) absolutely necessary to ensure we stop human suffering in times of emergency, we all need to start looking beyond the emergencies, to stop constantly trying to save the world and instead look at reinventing how we live in the world. It can no longer be about putting sticking plasters on issues and hoping they will go away; it has to be about creating opportunities for people so that they can build the lives they deserve. And who better to create opportunities than entrepreneurs? Every time I visit our Branson Centre of Entrepreneurship in South Africa I leave feeling that I just emerged from the epicentre of hope in the world.

One might think that these loans would never be paid back, but perhaps somewhat surprisingly 95 per cent of them are.

QUESTION

Can a case be made for companies to continue donating to charities as part of their CSR obligations? Or should they only help clean up the environment and provide seeding loans to budding young entrepreneurs in developing countries or outlying communities?