The Australian: Charity begins at work for new breed of philanthropic firms

@DamonKitney
The Australian Business Review 12:00AM October 9, 2017

When JB Hi-Fi chief executive Richard Murray decided earlier this year not to implement the Fair Work Commission-mandated Sunday and public holiday penalty rate cuts across his workforce, he declared that “people were his most important asset”.

And Murray meant it.

“I think CEOs need to stand for more than just financial results,’’ he says in an interview with The Australian.

“Being a CEO is complex and leading an organisation is complex. But I think sometimes people don’t want to stand up for what may be perceived as a softer side. I know the financial results are important, but us being an active member of the community within our remit is also very important.’’

Today Murray isn’t talking about penalty rates. Rather he’s talking about what he calls one of his greatest achievements in being the CEO of a retailer that has managed to deliver the goods for its shareholders over a decade and a half, irrespective of the retail environment.

Murray runs the most engaged workplace giving program in Australia, known as “Helping Hands”, and now has nearly 80 per cent of JB staff giving to charities from each and every pay packet.

Each week more than 6000 JB Hi-Fi staff, including the executive, donate to nine charity partners including Oxfam, the Fred Hollows Foundation, Redkite, Song Room and animal welfare charities.

Donations are matched dollar-for-dollar by the business.

Murray genuinely believes it has made a tangible difference to his bottom line. So much so, that he has commissioned research to prove it.

The Australian Charities Fund, a not-for-profit social enterprise and the architect, driver and thought leader of Workplace Giving (WPG, also known as pre-tax payroll giving) in Australia, is working with JB Hi-Fi to prove the substantive business case for WPG.

It also wants to establish what metrics can be shown as bottom-line benefits for employers to embrace workplace giving as a fundamental part of their overall community contribution.

Murray is the chair of ACF’s Employer Leadership Group.

“The business case for us and business leaders is that we are all trying to engage with our employees in an authentic and meaningful way,’’ he says.

“Millennials have very high expectations of themselves, the community and employers.

“Because WPG is so transparent, efficient and is ultimately their choice, it ticks a lot of those boxes that gel with how they are thinking about their role in the community.’’

ACF chief executive Jenny Geddes says the first stage of the research project, which was also supported by online classifieds giant Seek, found that WPG led to more engaged staff.

The study also found that young Australians, largely millennials, wanted to work for ethical companies and those organisations that would have a positive impact on the world.

“The time is really right for this because there is a younger group of leaders coming through. Philanthropy is a very private thing and still is. People don’t want the publicity for it. But when it is a giving program that involves all your staff, you have to be part of it and be proud of it,’’ Geddes says.

Since 2002, WPG has raised more than a $250m of new funding for charities. But Geddes says the latest information available from the Australian Taxation Office shows that fewer than 200,000 working Australians regularly contribute to charity from their pay.

As a result, ACF and a group of business leaders including Murray have set the bold goal of getting a million Australians donating through the workplace by 2020, which would create an additional $250m each year for the community.
Geddes says the latest numbers show the average participation rate from employers in the network was 25.05 per cent, compared to the national average of less than 5 per cent participation.

The top 10 companies in the program are JB Hi-Fi, Seek, Collins Foods Group, Pacific Equity Partners, Atlassian, Event Hospitality & Entertainment, Flight Centre, BHP Billiton, Corrs Chambers Westgarth and PricewaterhouseCoopers.
“Not enough companies know about this,’’ says PEP founder and managing director Tim Sims.

“There is a perception among some that it is a distraction. That is not supported by the data and the experience of those that have supplied it.

“It is extremely productive for the company and the community.”

Sims says that at the PEP-owned Collins Food Group, more than 50 per cent of the employees are engaged in WPG, in a business that has a natural 40 per cent staff turnover rate.

He says the private equity sector led by the Australian Private Equity and Venture Capital Association Limited (AVCAL) is encouraging its members to take up WPG as a way of increasing value and giving to the community.

UBS Australia Foundation executive officer Caroline Stewart says 65 per cent of the firm’s employees contribute to its workplace giving program.

“We encourage employees to donate to their choice of Australian charities, rather than prescribing a set list. Employees really appreciate the opportunity to choose the causes they feel passionately about,” she says.

The sceptics claim companies like JB Hi-Fi have the luxury of promoting workplace giving because of their strong financial performance. But Richard Murray has the opposite view.

“If you had a business that was underperforming and a new leader wanting to drive cultural change, the really bold call is for a CEO to say we have some tough decisions internally, but we are going to stand for more than the short-term pain. And we are going to see through all that,” he says.

“Ironically, maybe when a company is underperforming, launching a workplace giving program is a really bold visionary move by a leadership team that says, ‘Hey, this is the organisation we want to be and that includes a high level of engagement with our employees and the community’.’’

US coffee chain Starbucks had racked up more than $150m of losses in Australia when the rights to the chain were purchased by the wealthy Withers family (of 7-Eleven fame) in September 2014.

It took some time, but local CEO Chris Garlick was determined to introduce a workplace giving program. The so-called Green Apron Giving program was launched in August 2016.

“We asked our staff to donate at least $1 per week and the company matches it. We have 51 per cent of the organisation participating in the program,’’ he says.

“There was almost an expectation from our staff — how to build equity in our brand … I am really surprised that other companies don’t get to the same level of participation.’’