Gift of the gab
30 April 2012
13 June 2014
22 May 2014
30 September 2014
BWB Briefing for Charities and Social Enterprises — Law Commission reports on charity law reform programme; and more
11 September 2014
9 July 2014
Giving time and money to charity is no longer enough. Firms need to learn how to shout about it too
To butcher a well-worn philosophical phrase about trees and forests, if a law firm gives money to charity but no one knows about it, does it still make an impact?
For the strangled non-profit sector, the £5m it received from the UK’s top 10 law firms last year may have staved off the Government’s swingeing cuts for a few more months, but it is a drop in the ocean when you consider that the largest 100 law firms in the UK made more than £4bn profit in 2009-10.
The corporate sector as a whole provides just 5.7 per cent of total annual voluntary sector income, yet in the legal profession top magic circle equity partners can earn between £1.4m and £2.5m each per year.
No wonder then that the haves want to make a big noise when they give to the have-nots. But what else is behind high-minded corporate responsibility if it is not simply to assuage wealth-guilt? This is, after all, lawyers and their profit-driven firms we are talking about. In short, what’s in it for them?
The counterargument revolves around pro bono work, to which the same top 10 UK law firms annually give £45m worth of their time. Put another way, they give eight times more graft than cold, hard cash.
Lawyers are supporting charities, the arts and cultural organisations, and the education sector increasingly through non-financial assistance such as in-kind donations, staff volunteering and pro-bono services, encouraged by their bosses to expand their skills to support their local communities.
Why is this? A comprehensive study from non-profit research service Factary has delved into the legal sector’s philanthropy and compiled a substantive analysis of donations by leading UK law firms.
It states that there are four main motives for running corporate responsibility programmes, or as it plainly puts it, “getting more bang for your charitable buck”.
These motives are: to align corporate responsibility work to head off industry criticism; to concentrate on doing what they do best for community benefit; to energise staff by promoting volunteering and giving opportunities; and to create subtle links between business objectives and community investment work, creating networks and relationships that support business development.
The report states: “The underlying motivation for corporate philanthropy has long been rooted in enhanced corporate reputation through marketing and brand management. However, recent reports have shown that improved employee recruitment and retention, the personal interests of company leadership and the use of corporate responsibility programmes to differentiate companies from their competitors are now additional motivating factors.”
According to the research, firms are being more focused in the kind of charities they support, selecting causes that can be beneficial to both the firm and the charity.
“While the charity can benefit from the core business skills, including professional, financial and logistical expertise of the firm, the firm benefits from good publicity and building brand awareness through association with an organisation, a deeper understanding of its own customer base and staff development benefits through volunteering and pro bono activities,” it states.
So, in layman’s terms, law firms have realised that throwing a few notes in a collection tin at the local supermarket neither satisfies the critics nor gets them many column inches. Therefore, they’ve had to get creative to discharge their charitable duties while letting us know about it to up their profile.
Donation vs declaration
“There’s no such thing as a selfless good deed.” Not the quote of a long-since deceased philosopher, but that of fictional sitcom character Phoebe from Friends. Yet it rings true for Slaughter and May, which obliterates its rivals in terms of the publicity generated via charitable donations.
The Factary research collates data gathered from the top 20 UK law firms’ websites, corporate responsibility reports and corporate foundation annual reports to come up with a list of the biggest-hearted firms.
Then, scouring all publicly recorded donations to UK non-profit organisations – a total of 312,894 – it compares how much public recognition they received.
In the donations table, Clifford Chance comes out top, with £1.6m cash and £17.8m in pro bono during 2011. (See table.)
Slaughters, which donated £352,000, tops the table for the number of publicly reported donations, with 278 mentions in the Factary Phi database, harvested from non-profit organisations’ annual reports about donations received.
Hogan Lovells, which donated practically the same as Slaughters (£350,000), received just 10 public thank yous. The two biggest charity spenders, Clifford Chance and Freshfields, got just 48 mentions each.
The report then compares the two charts and, although indicating it is not a precise science, concludes that DLA Piper (127 per cent) and Slaughters (109 per cent) achieved the highest levels of recognition per £1 donated.
Where does the money go?
Interestingly, both the number of publicly recorded donations and the total value of these peaked in 2008. The report ascribes the decline in 2009 to the tough trading conditions suffered in the previous 12 months after several years of substantial growth in revenues.
The three most popular areas for charitable giving in 2010 by value were education, young people and rights, which received 54 per cent of all cash donations in the public domain. Other areas included arts, health, welfare, international development, housing and employment, with preferences depending on whether the support is from firms’ charitable trusts or foundations, or staff fundraising activities.
Three-quarters of the £7m-plus of recorded donations since Factary started collecting data in 2005 was donated by trusts or foundations, with the remaining quarter coming from firms’ staff.
The report notes that other charity sectors – the environment, heritage and the elderly – are not reporting donations from UK law firms. Either they are keeping quiet or they are not penetrating the hearts, minds and wallets of the legal market.
What also emerges from the research are discrepancies between some firms’ stated charitable themes or activities (education and training, development, housing and employment, rights law and conflict, and international development) and what they actually donate to (health, young people and the arts).
So are they hiding the truth about where their money is going? The report suggests it is more likely that arts organisations are more public in their gratitude; historic donations overlap with current priorities; and employee-directed fundraising is not constrained by firms’ corporate responsibility policies.
Clearly, Slaughters’ savvy fundraising team and charitable trust bosses are dab hands at securing maximum publicity for the (relatively) small expenditure. If a tree falls in the Slaughters forest and no one is around to hear it, you will still know about it, especially if it helps build a new home for a hard-up beaver charity.
But what about Hogan Lovells or Clifford Chance, which seemingly wouldn’t be heard even if their executives funded next year’s Children In Need TV extravaganza?
The report makes several suggestions for law firms and to charities to improve the donation-publicity cycle. Firms are encouraged not to rely on the perception of generosity, and non-profits are encouraged to focus on pro bono and offer to publicise their donations.
Factary director Chris Carnie says: “If you compare how much law firms are donating against how often they are thanked in public what you find is that Slaughters, for example, gives £350,000 and is mentioned an awful lot. Whenever they make a gift they’re thanked in public, yet other firms that give similar [amounts] or a lot more are thanked a lot less. What we’re able to say is that, for whatever reasons, they’re getting more bang for their charitable buck.
“Part of it must be encouraging recipients to say thanks in public because part of the corporate responsibility objective is recognition. Some firms are achieving this better than others.
“The conclusion for law firms is that they should have a pat on the back for being strategic about their philanthropy,” Carnie adds. “It looks like the top law firms in the UK are thinking through what they want to achieve, whereas 10 years ago many were just responding to appeals in the post [Simmons & Simmons has the only charitable trust that accepts unsolicited applications].
“Some firms give more than others – that’s for them to decide. But particularly in the area of bang for their buck, there’s scope for firms to consider if they want to continue giving privately or make themselves more renowned for their donations.”
Good and proper
Mark Bennett, head of pro bono at Slaughters, says the firm does not have a policy of insisting on publicity for charitable donations.
He adds: “Quite the opposite, we’re generally pretty low-key. This [finding] must just be a coincidence with the organisations we give to.
“Getting recognition for our corporate responsibility is not a factor. The figures don’t take into account donations outside the charitable trust, or that partners give individually. We don’t publicise any of that.”
Bennett accepts that donating is not a one-way street, pointing to work done by the firm’s younger lawyers with partner schools that benefits both the students and the training of solicitors by dealing with those that come from “all sorts of backgrounds”.
Similarly, Slaughters sends volunteers into law centres in London boroughs not just to offer pro bono services and advice, but also to practise their “fleet of foot” with live cases in unfamiliar sectors.
Slaughters is one of those top 20 UK law firms whose charitable trust is not open to unsolicited applications. Bennett agrees that this makes law firms’ coffers less accessible for some cash-strapped organisations, but explains: “We changed our policy four or five years ago because we decided we’d concentrate our firepower on certain segments. If you do it that way, you get more bang for your buck. In other words, you’re able to be more help to your chosen non-profit because you develop a deeper relationship with them.
“Charities like committed funding over a period of time, rather than continuous fundraising. Of course, people should give as much to charity as they possibly can and everyone could always do more, but you have to look at it in the round. Law firms can provide more pro bono than hard cash and for a lot of charities they would have to go and seek out legal advice and maybe not be able to afford it. You have to look at the cash as a tiny proportion of the overall effort firms such as ours are putting in.”
So current trends would suggest that if you pass a lawyer in the street, stop rattling your tin and instead ask his advice – you may just get it for free. Just make sure that you tell your neighbour.
A closer relationship with charities
“Traditionally, we haven’t received donations or pro bono work from law firms, but we’re working towards a new strategy that will see us work together to find solutions to significant environmental issues,” says Tracey Pritchard, head of fundraising at Friends of the Earth.
Her comment expresses a growing desire among charities to tackle issues hand-in-hand with large organisations.
“Identifying environmental issues in the next 50 years will be an enormous task that we can’t achieve alone,” Pritchard says, adding that the charity has, in the past, had a low profile with law firms partly because of the nature of their work.
“We now recognise the need to partner with other sectors, not because of cash transactions, but because of linking the thinking of a law firm with the objectives of our charity. It’ll be a strategic partnership.”
While charities such as Friends of the Earth are cementing new relationships, others have long relied on corporate support. Angus Nelson, head of high-value giving at the Alzheimer’s Society, points to regional partnerships, including the support of DLA Piper in Leeds and Liverpool and a generous amount of pro bono work, as areas the charity relies on.
“One in three people over 65 will die with dementia, so the condition will touch most of our lives at some point,” Nelson adds. “The fantastic support of companies and law firms will help the Alzheimer’s Society champion the rights of people living with dementia and the millions who care for them.”
How to get your donation noticed
- Put a list of the firm’s charitable donations on the website or the charitable trust’s website.
- Liaise with the non-profit organisation to do the same.
- Organise a press release and photoshoot, and let the public know.
- Get your lawyers to talk about their pro bono work projects. Put it in the public domain.
- Be creative with donations and volunteering to attract more attention.
What’s in it for law firms?
“There are obvious benefits for a law firm in having a leading pro bono practice and there’s no point in pretending it doesn’t enhance a firm’s reputation – it certainly helps to build and strengthen our links with commercial clients,” says Paul Yates, head of London pro bono at Freshfields.
However, Yates notes that apart from the business incentive, there are other drivers for doing pro bono work.
“Another important factor is that we see it as part of our ethical obligation,” he says. “A lot of partners who have supported the growth of our pro bono practice feel it’s important to them on a personal level and see it as the right thing to do.”
Tom Dunn, pro bono director at Clifford Chance, agrees that moral obligation has made pro bono an intrinsic part of the firm’s strategy.
“We do this because as a law firm we believe it’s the right thing to do to enable our wider communities to benefit from the specialist skills many of our lawyers and business services teams have developed through their careers,” says Dunn. “We also do it because we know it matters to our stakeholders: our staff are keen to be involved, clients want to partner with us and incoming graduates expect it.”
As for charitable donation, there is more to it than meets the eye, says Yasmin Waljee, Hogan Lovells international pro bono manager.
“We aim to build long-term, strategic relationships with the not-for-profit and charitable organisations we support,” she says. “Donations are just one aspect of this and are not necessarily a full reflection of a firm’s considerable commitment.”
Publicity in itself is not a motivation for doing pro bono work, highlights Dunn.
“Pro bono and volunteering work bring huge benefits to the communities and individuals who receive our support, and to the firm – this is what matters to us, not good publicity,” he says.
“Apart from our corporate responsibility report, where we list our cash donation for the financial year, we don’t do anything else to report it,” notes Yates.
“To measure the profile a firm gains from its charitable donations misses the point,” argues Waljee. “We support charities because we as an organisation and our staff members as individuals are committed to the causes those charities represent, and feel our involvement, both financial and non-financial, will have real impact, rather than for the profile our association with that charity might bring.”
As Yates notes, individuals within firms have their own reasons for getting involved in pro bono work.
“We have a variety of charity clients, from large organisations to individuals, and this gives our lawyers the opportunity to have different experiences,” he says. “For example, there are lawyers who want to get involved in core everyday matters so big charities are often a better fit for them. Others are more interested in experiencing new areas of law and new challenges, so that can fit better with some of the smaller clients.”
Pro bono work is also a big deal for graduates, adds Yates.
“We’re asked a lot by graduates about our pro bono work,” he says. “They expect us to have a good pro bono practice and a vast proportion of graduates bring it up in interview. I also do an induction for trainees and during it I ask how many of them have looked into our firm’s pro bono work. Always, the vast majority are interested and have already researched our pro bono work.”
As for the wider question of recognition for charitable donations and pro bono work, Waljee says that work could be done in this area.
“There’s scope for a wider discussion about whether all the public service work done by the profession – especially in the area of pro bono support – is adequately recognised by government and society as a whole,” she notes.
Click on image below to view larger version