Danger to charities as BA cuts donations

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Airline alliances in turmoil

British Airways, which last week reported a 98 per cent fall in half-year profits, is cutting its charity donations and refusing fresh commitments.

The airline gave £782,000 in cash in the last financial year, making it one of the most generous corporate donors in the UK. But the chief executive, Rod Eddington, has decided it cannot continue to be as generous in the wake of the sharp downturn in business since the US attacks.

The group has decided not to take on any new charitable commitments, but will stand by its obligations. That means cash contributions to charities next year will fall to around £500,000, and perhaps less.

BA also donates a further £4m in services to charities, providing facilities and staff given time off. Though the company has not said how this will be affected, it is likely some of these commitments will be pared back.

BA is one of the largest charitable donators in FTSE 100, giving the equivalent of 3.2 per cent of its profits last year. Only Royal & SunAlliance, Northern Rock and J Sainsbury gave a higher percentage of their profits.

But BA has suffered a sharp reverse. Though it was able to report a half-year profit of £5m, this was largely due to the sale of its low-cost airline, Go, and analysts are expecting losses of some £750m for the year. Though no other FTSE 100 companies contacted by The Independent on Sunday admitted they are reducing charitable giving, there is a fear cutbacks are likely as they draw in their horns for a recession.

Several firms said their charitable donations depended on their profitability and if that was hit, so would be the gifts to good causes. "Most companies set their budgets on an annual basis so most charities will not have seen the effects of any charge of heart yet," said a spokesman for the National Council of Voluntary Organisations.

Charities received £315m last year from businesses, of which almost half came from just 25 main donors. These days, investors are increasingly focusing on how socially responsible companies are, and giving to good causes is one of the areas checked.

Alliances under threat, page 3