Only one in four UK businesses donate to charity despite 63% of younger workers (aged 16-24) saying they are more loyal towards their employer if they give to charity, according to new research.

More than half (54%) of employees say that working for an employer that supports charities increases their sense of pride in working there and encourages their loyalty to the company (51%). Furthermore, 47% said it increases their willingness to go the extra mile for their employer, CAF found.

The trend is even more stark among younger generations of employees looking to work for a company with social purpose.

More than three-fifths (63%) of 16–24-year-olds said their company’s charitable giving increased both their sense of pride as an employee and their loyalty to the organisation. More than half of 25–34-year-olds said the same (57% and 54% respectively). For 45–54-year-olds, the percentage drops to just below half (47% and 48% respectively). For over 55s, only around a third of those surveyed saw a positive link.

Despite the next generation of business leaders being more socially conscious, the majority (75%) of businesses don’t give anything to charity, whether in the form of cash, in-kind donations or employee volunteering hours, according to data compiled by CAF.

While plenty of businesses may encourage customer or employee fundraising, CAF’s research looked specifically at whether businesses contribute their own profits to charities.

Philippa Cornish, Head of Corporate Clients at the Charities Aid Foundation (CAF) said: “We are seeing a growing movement towards ‘responsible business’ and charitable giving should be considered a crucial pillar of these strategies. Giving to charities is good for business. It offers businesses the opportunity to demonstrate their commitment to their communities as well as their staff.

To attract and retain new generations of workers, corporate giving is not just a nice to have. It’s become an important consideration about whether you want to work for somebody or not, and businesses should remember this, particularly when competition for talent is high.”

The Skipton Group, which commits 1% of its pre-tax profits to charity, has recently designed a giving programme as a way to live their values and do tangible good in areas that are important to both the business and their members.

Michaela Wright, Head of Sustainability at the Skipton Group, said: “We are working to tackle significant challenges aligned to housing and money. Our colleagues and members helped to choose which charities to support, ensuring that we’re focusing on meaningful impact across areas that are important to them.

Our charitable giving aims to help our members and wider society overcome barriers preventing people from having a home, accessing financial advice and education, and increasing awareness and action to support making our homes warmer and more energy efficient.”

CAF’s tips for businesses wanting to engage employees with their corporate giving:

• Commit to matched giving – this can be done via supporting colleague fundraisers by matching the money raised with a company donation, or by matching your employees’ regular giving, via a payroll giving programme
• Make sure employees can feed into your corporate giving strategy, for example by voting for the charities the company supports.
• Communicate with employees regularly about what the company is doing to support charities, how and why.
• Enable employees to be good corporate citizens in the places where they live and work by offering employee volunteer hours as part of your corporate giving strategy and incentivise their individual efforts through matching donations.

*Research from the Charities Aid Foundation (CAF)