Some Corporations Give Until It Hurts Others
December 22, 1998
Is it the legitimate business of corporate executives to give away shareholders' money, critics question? Are there sometimes hidden agendas in corporate philanthropy? Should a company which is losing money make multi-million dollar donations? Why do companies contribute money to anti-business groups? Analysts say these are legitimate questions which shareholders have a right to ask.
- For example, Boeing is eliminating 48,000 jobs this year and chalked up a $178 million loss last year -- yet it gave away $51.3 million in 1997.
- PNC Bank gave $97,000 to ACORN -- an activist group that lobbies for higher taxes and stricter enforcement of banking regulations.
- According to "Patterns of Corporate Philanthropy," published annually by the Capital Research Center, companies donate three times as much to liberal, pro- government organizations as to conservative, pro-market public affairs groups.
- Critics charge that some large corporations support groups which promote greater government regulation, knowing the controls will swamp their smaller competitors.
Some analysts wise to the ways of corporate philanthropy contend that what's good for a corporate chief who seeks plaudits for social responsibility isn't necessarily good for his shareholders.
Sources: Marriane Jennings (Arizona State University) and Craig Cantoni (Capstone Consulting Group), "An Uncharitable Look at Corporate Philanthropy," Wall Street Journal, December 22. 1998.
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