Corporate Philanthropy in Pakistan

Survey of public listed companies 2006

An Exploratory Survey on the Nature and Dimensions of Corporate Giving in Pakistan Pakistan Centre for Philanthropy Pakistan Centre for Philanthropy

Corporate Philanthropy in Pakistan

Survey of public listed companies 2006

An Exploratory Survey on the Nature and Dimensions of Corporate Giving in Pakistan This survey has been funded by the Aga Khan Foundation (Pakistan).

Aga Khan Foundation Pakistan Centre Pakistan for Philanthropy

Any reproduction of this report without prior permission of PCP and AKF (P) is discouraged.

Printed by Colorline Islamabad

Cover and design, desktop composition and production management: Asad Zia, Pakistan Centre for Philanthropy, Islamabad

Foreword

F o r e w a r d I

Acknowledgements

This survey, the second follow up of the data cleaning and verification exercise. report, 'Corporate Philanthropy in A token of appreciation is also due to Pakistan: the case of public listed Asad Zia Iqbal for the cover design and companies' is another milestone layout. Special thanks to Mr. Eazaz A. towards promoting qualitative and Dar, Senior Programme Manager for quantitative research in Pakistan. This coordinating, guiding and leading the report and the survey is a result of entire effort and whose meticulous collective efforts of many individuals editing and final analytical review was without whom Pakistan Centre for instrumental in refining and finalising Philanthropy (PCP) would not have been the report. able to bring out this publication. PCP acknowledges gratefully the support of PCP owes its gratitude to Securities and all the Board members and the Exchange Commission of Pakistan guidance extended by Dr. Shamsh (SECP), Karachi Stock Exchange (KSE) Kassim-Lakha, Chairman PCP, and Arif Habib Securities (AHS) for throughout the duration of this project. providing the financial data as The Centre also owes its gratitude to contained in this document. The Centre Mr. Mahomad Jaffer, Chairman also owes gratitude to all the Research Committee and members, companies who dutifully verified and Syed Babar Ali, Mr. Mueen Afzal, Mr. provided additional relevant Shoaib Sultan Khan, Mr. Badaruddin F. information for the purpose of this Vellani, Dr. Attiya Inayatullah, Mr. Asad survey. Finally, a special mention of the Umar, Mian Ahsan M. Saleem and Mr. Aga Khan Foundation (Pakistan) whose Zaffar A. Khan. financial support made it possible to bring out this report. The overview, collection of data, insightful analysis and results as documented in this survey are a meticulous contribution of Kashmala Shahnaz Wazir Ali Shahab Kakakhel, Junior Programme Executive Director Officer Research. This report is an evidence of her sharp analytical skills and professional dedication. Credit is also due to staff members, Asad Zia Iqbal for data collection, graphical illustration and input in analysis and Syed Tariq Ali for his contribution to the

A c k n o w l d g e m e n t s III

Executive Summary

Key Findings

PLCs participation in giving increased from 54% in 1 2005 to 60% in 2006 Total donations increased 10 times from Rs.228 2 Million (US$ 3.8 million) in 2000 (base year) to Rs. 2.3 Billion (US$ 38.3 million) in 2006 Contributions jumped from Rs. 1.6 billion in 2005 to 3 Rs. 2.3 billion in 2006; about 1.5 times increase

Top 25 giving companies contributed 73% of total 4 PLC giving in 2006 as compared to 68% in 2005

58% of top companies desired recognition. PCP's 5 instituted PCPA has led to more awareness and interest amongst the corporate sector

Corporate philanthropy is on the rise but remains 6 mostly unorganised and undocumented and there is potential for more Key Findings

PLCs continue to support causes related to health and 7 education

E x e c u t i v e s u m m a r y V

Contents

I. Foreword i II. Acknowledgments iii III Executive summary iv

1. Context Corporate Social Responsibility 1 Corporate Philanthropy 2 Emerging trends of top giving PLCs in Pakistan 3 Pakistan Corporate Philanthropy Awards (PCPA) 6

2. The survey Methodology 7 The sample 8 Data collection and measurement 9 Limitations 10

3. Rankings Unusual philanthropic pattern continues 11 Donations if taken as 1% of Profit Before Tax (PBT) 12 Comparison with previous years 14 Donations by top 25 giving PLCs 16 Philanthropic contributions by top companies; individual rankings 18 Sector-wise giving 21

4. Looking ahead Conclusion 24

1 Context

Corporate Social Responsibility

C o n t e x t 01 C O R P O R A T E P H I L A N T H R O P Y I N P A K I S T A N : S U R V E Y O F P U B L I C L I S T E D C O M P A N I E S

1 Corporate Social Responsibility”, accessed from http://strategis.ic.gc.ca/epic/sit e/csr- rse.nsf/en/h_rs00094ee.html, on September 14, 2007 2 Corporate Philanthropy Dr. Pamela Hartigan and Dr. Maximilian Martin(2004): Social Entrepreneurship: Understanding the New 3 Strategic Space for Social Emerging trends of top giving PLCs in Pakistan

4 Joe M. Ricks, Jr.(2002) :The Effects Of Strategic Corporate Philanthropy On Consumer Perception: An Experimental

C o n t e x t 03 C O R P O R A T E P H I L A N T H R O P Y I N P A K I S T A N : S U R V E Y O F P U B L I C L I S T E D C O M P A N I E S

Figure 1 Documentation of CSR Policies by PLCs in Pakistan

15%

40%

45%

Have a written CSR policy Do not have a written CSR policy In the process of making CSR policy 5 The Certification Programme seeks to bring transparency, accountability and good governance in the nonprofit sector in Pakistan. The first initiative of its kind in South Asia; it involves the evaluation of a nonprofit organisation on standardised parameters of internal governance, financial management and programme delivery. This voluntary assessment aims to enhance the NPOs' credibility and resultantly their access to funding. Through the allied activities of this programme, PCP promotes certified NPOs in an annual directory and on its website

C o n t e x t 05 C O R P O R A T E P H I L A N T H R O P Y I N P A K I S T A N : S U R V E Y O F P U B L I C L I S T E D C O M P A N I E S

Pakistan Corporate Philanthropy Awards (PCPA)

PCP's constant engagement with the criteria: volume of giving and donations corporate sector through its various as a percentage of profit before tax . programmes such as Research, Public PCPA emanated out of Corporate Private Partnerships (3Ps) in Education, Philanthropy in Pakistan: Survey of Public Philanthropy support services and Listed Companies for the years 2004 and Philanthropy Portal (2P) reveals that 2005 which has now become an annual companies do appreciate and are event. Similar awards will also be given desirous of recognition and incentives. for the year 2006 based on the rankings This statement has been confirmed by of this survey. It is hoped that these the fact that almost 60% of the top 20 awards will not only inculcate healthy giving companies were of the opinion competition among PLCs but will Government provision of greater contribute to a tradition of philanthropic incentives and recognition in the form of discourse and institutionalised CSR in awards to top givers, will encourage Pakistan. enterprises to become socially responsible members of society. 40% of the companies emphasised the importance of an enabling environment to foster high levels of philanthropy.

Therefore, in an effort to recognise and honour the philanthropic endeavours of PLCs as well as to encourage business sector philanthropy across a wider spectrum in the country, PCP initiated the 'Pakistan Corporate Philanthropy Awards' (PCPA), first of its kind in Pakistan. Top three performing companies for the years 2004 and 2005 were awarded, based on two

2 The Survey

Methodology 6 Cochrane and Wood, (1984): The impact of corporate behaviour on perceived

T h e s u r v e y 07

T h e s u r v e y 09 C O R P O R A T E P H I L A N T H R O P Y I N P A K I S T A N : S U R V E Y O F P U B L I C L I S T E D C O M P A N I E S

Limitations

3 Rankings

PLCs ranking are based on the following for the issue related to the varying sizes criteria: of PLCs. Since companies differ in size, lby total volume of donations turnover, level of profit, consequently the lby volume of donations as a donations also reflect a wider range. percentage of Profit Before Tax Therefore, as was done in the preceding (PBT) reports, to discount the size factor, 'donation as a percentage of PBT' as the Employing 'donations as a percentage second criteria has been employed for of profit before tax' as an indicator for the purpose of this survey as well. corporate commitment to giving factors

Unusual Philanthropic Pattern Continues

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Table 2 Number of PLCs involved in CP

YEAR 2006 2005 2004 2003 2002 2001 2000

329 299 283 287 282 268 263 NUMBER OF COMPANIES GIVING 546 551 552 568 565 551 500 TOTAL SAMPLE 60 54 51 50 49 48 52 PERCENTAGE OF SAMPLE INVOLVED IN CP

Table 2 presents a timeline profile of the aforesaid years gave beyond their the PLC sector engaged in giving budgets in order to participate in over a period of seven years. Despite relief efforts in the aftermath of the the fact that the number of earthquake. It should not come as a companies reduced from 551 in surprise if in the following years, the 2005 to 546 in 2006 due to same companies report decreased mergers or delisting etc, an giving. However, the upward pull on encouraging fact is that the total companies giving above the additional 30 companies entering 2005 level could also be attributed to the giving bracket, has led to a 6% corporations realising the indirect increase in the companies involved benefits of pro bono services and the in corporate giving i.e from 54% in role they need to play for the progress 2005 to 60% in 2006. The most of the social fabric of Pakistan; the plausible reason cited for the upward positive trend may be here to stay. change is that many companies in

Donations if taken as 1% of Profit Before Tax (PBT) Table 3 Donations if taken as 1% of Profit Before Tax (PBT) PKR Million

DONATIONS AS YEARS TOTAL PBT TOTAL DONATIONS PERCENTAGE 1% OF TOTAL PBT

2000 36,477 228 0.6 365 2001 88,166 277 0.3 882 2002 150,349 336 0.2 1,503 2003 172,626 496 0.3 1,726 2004 1,177,586 653 0.1 11,776 2005 484,001 1,608 0.3 4,840 2006 362,968 2,330 0.6 3,630 TOTAL 2,472,173 5,928 0.2 24,722

A cursory glance at Table 3 and such as earthquake - which kept Figure 2 depicting two divergent corporate philanthropy on the rise. trends i.e. steady rise in corporate Rise or fall of profits is subject to philanthropy despite fall in multiple extraneous factors such as companies' PBT after 2004 makes it financial and economic volatility of look deviating from standard markets, market capitalisation, proportional relationship between macroeconomic shocks, rise and fall the two. However, the encouraging of interest rates, latent international fact is that the rising trend in economic and financial influences. corporate philanthropy continues Secondly, a simplistic way of looking despite falling PBT. This apparent at cumulative figures over the years divergence can be attributed to without deeper sub-sectoral analysis various endogenous and exogenous of rise or fall of profits has the factors. potential of leading to untenable conclusions. Since such an in-depth A possible explanation is, that in the financial analysis is beyond the scope case of philanthropic giving, of this inquiry and the focus is to companies’ giving decisions are gauge the philanthropy, the mainly voluntary - relate more to heartening trend observed of a steady psyche, commitment, passion of the rise in corporate philanthropy is givers and unusual circumstances highlighted here.

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Figure 2 Donations if taken as 1% of PBT

14,000 11,776 12,000 ) n o i l

l 10,000 i M

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K 8,000 P (

s 6,000 4,840 n o

i 3,630 t

a 4,000 n 1,726 2,330 o 1,503 2,000 882 1,608 D 365 496 653 277 336 - 228 2000 2001 2002 2003 2004 2005 2006

Total Donations Donations as 1% of total PBT

Comparison With Previous Years

In order to understand the dynamics been segregated into categories of giving practices adopted by according to size of donations to companies in 2006, it is essential to estimate the change in range of cash analyse varying trends by drawing contributions by the PLCs. Table 4i comparisons with previous years. For shows the number of companies this purpose, the year 2006 will first giving, by spread of donations. Table be compared to the preceding year, 4ii illustrates the percentage change 2005 and then to 2000 which has with the preceding and the base years. been marked as the base year for this exercise. Further, donations have Table 4i PLCs by Spread of Donations (2000-2006)

Number of Companies by Year and Category

CATEGORY BY SIZE OF DONATION (PKR MILLION) 2000 2001 2002 2003 2004 2005 2006

MORE THAN OR EQUAL TO 5 MILLION 12 16 16 26 31 63 71 MORE THAN OR EQUAL TO 4 AND LESS THAN 5 MILLION 1 4 3 4 10 11 8 MORE THAN OR EQUAL TO 3 AND LESS THAN 4 MILLION 5 3 6 6 3 14 12 MORE THAN OR EQUAL TO 2 AND LESS THAN 3 MILLION 3 6 13 8 14 14 16 MORE THAN OR EQUAL TO 1 AND LESS THAN 2 MILLION 22 14 18 33 21 21 35 MORE THAN OR EQUAL TO 0.5 AND LESS THAN 1 MILLION 29 34 32 35 33 26 47 MORE THAN ZERO AND LESS THAN 0.5 MILLION 191 191 194 175 170 149 140 ZERO 237 283 283 281 270 253 217 TOTAL 500 551 565 568 552 551 546

Preceding Year (2005)

Table 4ii reveals encouraging trends is 60%, whereas the highest about philanthropic giving in 2006 percentage increase i.e. 81% has when compared to 2005. Even been recorded in the category of though the total number of PLCs in companies who gave between 2006 is less than 2005, the positive PKR 0.5 million to PKR 1 million. trends are as follows: The reason for this change could be the relatively smaller PLCs with lAs predicted by the survey low PBTs opting to make a carried out for 2005, the number difference with small contributions. of companies in the category of lCorporate philanthropy is on the PLCs that gave more than PKR 5 rise in Pakistan. This statement is million increased from 63 to 71; further supported by the finding this is a 12.6 percent increase. A that between the years 2005 and rise in the number of companies 2006, there has been a decrease in this category may be due to of 14.2% of companies with zero earthquake philanthropy. giving, meaning thereby that lFor the companies that gave companies moved into the giving between the range of PKR 0.5 category. million to PKR 3 million, the increase in terms of percentage

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PLCs by spread of donations 2006 showing percentage Table 4ii change with pervious year and base year. Number of Companies by Year and Category

CATEGORY BY SIZE OF DONATION (PKR MILLION)

% CHANGE WITH % CHANGE WITH PRECEDING YEAR BASE YEAR 2000

MORE THAN OR EQUAL TO 5 MILLION 12.6 491.6 MORE THAN OR EQUAL TO 4 AND LESS THAN 5 MILLION -27.2 700.0 MORE THAN OR EQUAL TO 3 AND LESS THAN 4 MILLION -14.2 140.0 MORE THAN OR EQUAL TO 2 AND LESS THAN 3 MILLION 14.2 433.3 MORE THAN OR EQUAL TO 1 AND LESS THAN 2 MILLION 66.6 59.1 MORE THAN OR EQUAL TO 0.5 AND LESS THAN 1 MILLION 80.7 62.1 MORE THAN ZERO AND LESS THAN 0.5 MILLION -6.0 -26.7 ZERO -14.2 -8.4

Base year (2000)

To observe how corporate manifold; the highest change of philanthropy has performed over a 700% in the category of PKR 4 span of seven years, a comparison million to PKR 5 million. with 2000 (base year) has been lPLCs giving PKR zero to PKR 0.5 tabulated. As expected, an increase million shows an obvious decrease of fairly high percentage changes is overall. This trend highlights the recorded. positive momentum corporate philanthropy has gained in lIn the range of PKR 2 million to Pakistan over a short period of more than PKR 5 million, as seven years by inclusion of new shown in table 4 ii the increase companies in giving bracket. between the two years is

Donations by top 25 giving PLCs

Tables 5 and 6 draw attention to the each year; from 61% of PLCs in 2003 to fact that over the last few years, the 73% in 2006. This positive movement major contribution to total giving has has been captured by the line graph in been made by the top 25 PLCs only. Figure 4 which shows the trend for the This is illustrated in the pie chart years 2000 to 2006. labelled Figure 3. In fact, the share of involvement is increasing substantially Table 5 Donations by Top 25 Giving PLCs

YEAR 2000 2001 2002 2003 2004 2005 2006

158.4 201.4 235.9 344.3 482.3 1087.4 1709.5 TOTAL DONATIONS BY TOP 25 PLCS (PKR MILLION) 6.3 8.1 9.4 13.8 18.3 43.5 68.4 AVERAGE DONATIONS BY TOP 25 PLCS (PKR MILLION) 32 37 42 61 70 68 73 CONTRIBUTION OF TOP 25 PLCS (AS A % OF TOTAL GIVING) 68 63 58 39 30 32 27 OTHERS (AS A % OF TOTAL GIVING)

Table 6 PLCs Giving Rs. 5 Million or More

CATEGORY 2006

MORE THAN OR EQUAL TO 100 MILLION 2 MORE THAN OR EQUAL TO 50 AND LESS THAN 100 MILLION 6 MORE THAN OR EQUAL TO 10 AND LESS THAN 50 MILLION 34 MORE THAN OR EQUAL TO 5 AND LESS THAN 10 MILLION 29

Figure 3 Percentage Contribution of Top 25 Giving PLCs (2006)

34%27% 73%

Contribution of top 25 giving companies as a % of total giving Others

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Figure 4 Donations of Top 25 Giving PLCs by Volume

)

n 1709.53 o 1800

i

l

l

i 1600

M

1400 1087.4 R 1200

K

P 1000

( 800 g 482.3

n

i 600 344.3

v

i 235.9 400 158.4 201.4

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43.5 68.3812 f 200 13.8 18.3 8.1 9.4

o 6.3 0

e 2000 2001 2002 2003 2004 2005 2006

m

u

l

o V Years Total Donations by Top 25 PLCs (PKR Million) Average Donations by top 25 PLCs (PKR Million)

Philanthropic Contributions by Top Companies; Individual Rankings

For the purpose of ranking corporate contributed to earthquake rehabilitation. donations by PLCs, two criteria have Pakistan Petroleum Limited (PPL) stands been used: the volume of donations and 2nd followed by Pakistan the donations as a percentage of Profit Telecommunication Company Limited Before Tax (PBT). Table 7 which (PTCL) ranking 3rd. It will be interesting represents the ranking for total volume to see how the figures change in the next of donations, shows that Oil and Gas survey when earthquake philanthropy is Development Company Limited likely to be reflected at considerably (OGDCL) is by far the highest giving PLC reduced levels. for the year 2006. Out of its total giving of PKR 643 million, PKR 500 million was Table 7 Top 25 PLCs by Volume of Donations (2006)

PKR Million

RANK COMPANY PROFIT BEFORE TAX DONATIONS

1 OIL & GAS DEVELOPMENT COMPANY LIMITED 65911.33 642.99

2 PAKISTAN PETROLEUM LIMITED 20189.53 280.4

3 PAKISTAN TELECOMMUNICATION COMPANY LIMITED 30974.05 95.04

4 UNILEVER PAKISTAN LIMITED 2497.54 64.9

5 PAKISTAN STATE OIL LIMITED 11654.1 63

6 NESTLE MILK LIMITED 2005.46 54.05

7 SHELL PAKISTAN LIMITED 4599.49 54

8 KOT ADDU POWER COMPANY LIMITED 8596.51 53.58

9 MILLAT TRACTORS LIMITED 1074.6 36.46

10 ENGRO CHEMICAL PAKISTAN LIMITED 3.44 35.42

11 INDUS MOTORS LIMITED 4072.78 34.67

12 BESTWAY CEMENT LIMITED 1730.47 30.95

13 FAUJI FERTILIZER COMPANY LIMITED 6985.14 28.45

14 SUI NORTHERN GAS PIPELINES LIMITED 5119.06 26.44

15 JAHANGIR SIDDIQUI AND COMPANY LIMITED 1092.56 25.13

16 PICIC COMMERCIAL BANK LIMITED 1279.21 25.1

17 J. D. W. SUGAR MILLS LIMITED 424.51 21.7

18 PAKISTAN REFINERY LIMITED 2063.38 21.19

19 MARI GAS COMPANY LIMITED 602.64 20.52

20 MAPLE LEAF CEMENT LIMITED 1634.81 19.96

21 HABIB METROPOLITAN BANK LIMITED 3,142.80 19.35

22 LAKSON TOBACCO COMPANY LIMITED 2.38 16.98

23 NISHAT (CHUNIAN) LIMITED 340.80 15.13

24 BANK AL-HABIB LIMITED 2689.38 14.75

25 GLAXOSMITHKLINE 2631.87 14.14

Table 8 ranks companies by aggregate outrank smaller companies that give less donations as percentage of PBT. This in absolute terms but more in terms of exercise has been carried out in order to percentage of PBT. The criteria of discount the fact that large companies donations as a percentage of PBT with large donation figures tend to represents the devotion of PLCs to

__ All figures rounded to one decimal place whereas, rankings were made on the basis of actual donations

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charitable giving. Table 8 ranks the top circumstances such as the earthquake 25 givers. Some companies show high emergency. The top three positions for levels of donations despite declaring low this category are occupied by Sitara profits. The reasons for such trends may Energy Limited, Salman Noman range from strong personal commitment Enterprises Limited and Gul Ahmed to social welfare to unusual Textile Mills Limited, respectively.

Table 8 Top 25 PLCs by Volume of Donations as % of PBT (2006) PKR Million

RANK COMPANY PBT DONATIONS % OF PBT

1 SITARA ENERGY LIMITED 7.35 3.58 48.71%

2 SALMAN NOMAN ENTERPRISES LIMITED 1.75 0.34 19.43%

3 GUL AHMED TEXTILE MILLS LIMITED 12.38 2.02 16.32%

4 SALLY TEXTILE MILLS LIMITED 13.30 2.02 15.19%

5 KOHAT TEXTILE MILLS LIMITED 4.47 0.64 14.32%

6 MODARABA AL - MALI 28.48 3.82 13.41%

7 SHAHEEN COTTON MILLS LIMITED 3.18 0.41 12.89%

8 CHERAT PAPERSACK LIMITED 9.91 1.00 10.09%

9 ADOS PAKISTAN 12.75 1.22 9.57%

10 PAK GULF LEASING 8.02 0.75 9.35%

11 ISLAND TEXTILE MILLS LIMITED 28.40 2.44 8.59%

12 ALLAWASAYA TEXTILE & FINISHING MILLS LIMITED 7.46 0.62 8.31%

13 KOHINOOR SPINNING MILLS LIMITED 36.56 3.02 8.26%

14 SHADMAN COTTON MILLS LIMITED 9.67 0.78 8.07%

15 NATIONAL SILK AND RAYON MILLS LIMITED 0.64 0.05 7.81%

16 KARAM CERAMICS 65.70 4.99 7.60%

17 NETSOL TECHNOLOGIES LIMITED 115.62 8.51 7.36%

18 SUHAIL JUTE MILLS LIMITED 4.97 0.36 7.24%

19 GULISTAN SPINNING MILLS LIMITED 22.47 1.61 7.17%

20 NADEEM TEXTILE MILLS LIMITED 6.98 0.49 7.02%

21 DEWAN HATTAR CEMENT LIMITED 186.01 12.24 6.58%

22 JOHNSON & PHILLIPS (PAKISTAN) LIMITED 6.92 0.40 5.78%

23 DADEX ETERNIT 11.41 0.65 5.70%

24 FAZAL TEXTILE MILLS LIMITED 51.46 2.85 5.54%

25 TATA TEXTILE MILLS LIMITED 67.33 3.62 5.38%

__ All figures rounded to one decimal place whereas, rankings were made on the basis of actual donations Sector-wise giving

To gauge philanthropic contributions in may vary greatly That is, if one sector each sector, ranking has also been has more companies than another, computed on the basis of the 33 KSE collectively, these companies will be standard sub sectors. Table 9 illustrates donating more as opposed to a sector the average donation by sub-sector per with fewer companies; consequently not company. The reason for averaging establishing meaningful results. Oil and donations per company is to understand gas Exploration ranks on top followed a steady pattern of philanthropic by oil & gas marketing and fertilizers activities in the entire sector as sectors. individual contributions and the number of companies within a particular sector

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Table 9 Sub-Sectors by Average Volume of Donations (2006)

Number of Companies by Category PKR Million

AVG. DONATIONS AVG. NO. RANKING BY SECTOR BY SUB-SECTOR OF COMPANIES (PER FIRM) AVG. DONATIONS

OIL & GAS EXP. COS. 4 239.1 1

OIL & GAS MKT. COS. 7 22.7 2

FERTILIZER 4 17.8 3

REFINERY 4 14.8 4

TECH. & COMM. 9 14.1 5

TOBACCO 4 10.5 6

POWER GENERATION & DISTRIBUTION 12 9.7 7

AUTO ASSEMBLER 12 9.4 8

FOOD & PERSONAL CARE PRODUCTS 20 8.4 9

CEMENT 20 7.3 10

COMMERCIAL BANKS 20 4.6 11

PHARMACEUTICAL 8 4.1 12

GLASS & CERAMICS 7 3.4 13

INV. BANKS/INV. COS./SEC. COS. 22 3.1 14

SYNTHETIC & RAYON 16 2.9 15

JUTE 5 2.5 16

ENGINEERING 10 2.3 17

TRANSPORT 3 2.1 18

CHEMICAL 21 2.1 19

TEXTILE COMPOSITE 49 2.1 20

AUTO PARTS & ACCESSORIES 10 1.8 21

SUGAR & ALLIED 36 1.7 22

CABLE & ELECTRIC GOODS 7 1.7 23

MISCELLANEOUS 22 1.7 24

TEXTILE SPINNING 98 0.8 25

PAPER & BOARD 9 0.8 26

LEASING 19 0.7 27

INSURANCE 31 0.7 28

WOOLLEN 2 0.6 29

TEXTILE WEAVING 12 0.4 30

VANASPATI & ALLIED 7 0.3 31

LEATHER & TANNERIES 5 0.3 32

MODARABAS 30 0.2 33

__ All figures rounded to one decimal place whereas, rankings were made on the basis of actual donations. 4 Looking Ahead

Around the world, as part of CSR the point of impact, i.e. local initiatives, companies are moving from organisations providing insights into local innovations in strategy and measurement issues. to advancements in communication techniques and employee involvement. It Over the past few years, companies have seems companies are transforming been called upon time and again to almost all aspects of their corporate respond to natural disasters, pulling at giving programs, integrating philanthropy the corporate reserves. The corporate into their businesses. Corporations world has generously stepped up, even at recognise that they have the unique the year end of corporate budgets. So in resources of people, product, volunteers addition to financial contribution, this as well as unsurpassed reach to local and group is filling a niche by bringing global community reach. These together a set of skills in their staff and resources have been put to use in employee volunteerism, distribution individual corporate philanthropy channels, resources of product that can programmes. However, a new level of not be delivered by any other group corporate collaborative philanthropy has including the government. This is a the potential to dramatically change the perfect example of collaboration amongst world in ways that individual companies companies at its best. could not do alone. Corporate collaborative philanthropy is a way in Pakistani companies are not lagging which organisations can pool individual behind. The will to promote a positive resources for the betterment of societal change is increasingly communities which they operate in. It embedding into local business strategies, takes into account the views, concerns spurred by a series of national tragedies and advice of those who have a stake in and a new generation of motivated the success or failure of the business in professionals. Many companies have relation to social and environmental embarked on a significant strategic and impacts on communities. This type of operational review of their giving collaboration serves programmes best at programmes. Companies are realising

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now that longer term can be achieved by needs strong and determined leadership moving from individual to corporate and the right team that can assist in the philanthropy and onto corporate delivery, monitoring, evaluation and collaborative philanthropy where even reporting of community investment more energy, skills and resources can be programmes. harnessed to make a larger impact.

However, a successful collaborative effort

Conclusion

Over the past decade, the face of unable to fulfill their role, enterprises may corporate philanthropy in Pakistan has consider it makes good business sense to changed significantly. Corporate giving play a part in filling the gap through now needs both to “do good” and to voluntary CSR initiatives. Some of the make the company “look good”10. In corporate players themselves seem to order to accomplish these dual goals, have become increasingly aware of the most corporate community relations need to promote and cultivate giving and departments restrict efforts to issues that corporate philanthropy among both leverage their firm's distinctive businesses. Such developments have strengths and meet their communities' been observed through this survey which needs. The reasons for a business to has confirmed an increase in overall move beyond traditional giving and corporate giving and encouraging trends undertake a CSR initiative are many and in Pakistan. varied but, where businesses do, they do so because it makes economic sense and Much can and should be done to through such an activity they can enhance encourage new and additional charitable “value” and most often, also enhance giving by companies and to stimulate the their position in the market. Given the creation and growth of organised giving dynamics of business today, corporate vehicles - such as corporate and philanthropy cannot then be seen as a independent foundations, corporate rigid engagement, but rather such giving programs, donor advised funds engagement needs to be seen in a and charitable bequests. In addition, the different context than the engagement in legal framework needs to be revised to environmental, social or economic issues stimulate giving. The government may do by governments. so by developing legislation which not only supports, but also actively While the line between government and encourages philanthropy at a micro as business activity is not always a definitive well as a macro level. Nevertheless, even one, it is important to realise that in the absence of a favourable legal governments have a clear role in society, environment, corporate donors and

10 Joan Steinberg(2001): Breaking through the provision of certain services, NGOs could work together, learn from the Corporate Philanthropy such as health and education. At times the experience of other countries code: how to leverage your in- however, where governments fail or are whenever possible and explore new house pro bono work through your company's charitable models of philanthropy and build a visionary approach relevant to Pakistan today.

The efforts of Pakistan Centre for Philanthropy to sensitize, incentivise and promote philanthropy particularly corporate giving through its constant engagement and research may be a drop in the ocean but findings of this survey confirm positive and encouraging improvements. It is hoped that the annual surveys conducted by PCP for compiling corporate donations will provide the motivation to inspire more philanthropy to meet the critical needs of our citizens and ensure a high quality of life in the years to come.

Being most resource rich and considered as the engine of growth and development, a heavy responsibility rests with the corporate sector to lead the effort. The survey confirms that philanthropic giving is strong in Pakistan, but that there is clearly untapped potential for doing more and doing better.

There is reason for hope. However, combining an assortment of philanthropic initiatives into a nationwide coordinated development strategy for the moment remains to be seen.

L o o k i n g A h e a d 25 About the Centre

The Pakistan Centre for Philanthropy government to identify credible partners (PCP) is an independent nonprofit support for social development. Certification also organisation licensed under section 42 of provides NPOs a fast track to tax the Companies Ordinance 1984. Located exemption. in Islamabad, it is led by a Board of Directors comprising eminent citizens and Research Studies aim to explore factors leaders from business and civil society that affect/have the potential to affect the organizations. quantum of philanthropy resources that may be made available for development. PCP was established in August 2001 as a Recent studies include ‘Creating an direct outcome of the Conference on Enabling Legal Framework for Nonprofit Indigenous Philanthropy held in October Organizations’, ‘Philanthropy and 2000 in Islamabad. The Conference, Leadership: A Study on the Giving attended by the President of Pakistan and Practices of High Networth Individuals’, His Highness the Aga Khan, ‘Philanthropy by Pakistani Diaspora in the recommended the setting up of a USA’ and ‘Corporate Philanthropy in “permanent institutional vehicle to Pakistan: The Case of Public Listed promote philanthropy for social Companies’. investment”. Information Dissemination and the Rather than engaging in direct General Promotion of philanthropy, PCP seeks to help others in Philanthropy their philanthropic efforts through is an essential underpinning function that meaningful support services: involves PCP in promoting knowledge and philanthropy best practice across Corporate Philanthropy for boundaries; generating informed Education; a flagship initiative discussion; catalyzing interaction; and implemented through Public Private voicing issues concerning the growth and Partnerships mobilises corporate development of civil society to address the philanthropy for improving rural area challenge of poverty. schools. The tripartite partnership includes government, private sector and civil The Philanthropy Portal (2P) is a virtual society organisations to manage inputs platform to link grant-makers and certified and produce outputs beyond the nonprofit organisations to promote magnitude of those that are possible effective collaborative philanthropy. 2P will through a singular effort. operate as a reservoir of information and assist donors and NPOs in making Certification of Nonprofit informed decisions and help build Organisations sets standards in critical functional relationships between the two. areas of internal governance, financial management and programme delivery for For more information visit www.pcp.org.pk NPOs so that they can enhance their credibility and transparency. Certified organisations are then promoted through PCP's website to enable donors and the Pakistan Centre for Philanthropy 1A, St.14, F-8/3, Islamabad Tel. (9251) 2855903-4, 2855078-9 Fax. (9251) 2855069 [email protected], www.pcp.org.pk