Corporation Donations

August 25, 1953

Report Outline
Corporation Gifts to Charity and Education
Legal and Tax Aspects of Business Giving
Corporation Support of Higher Education
Special Focus

Corporation Gifts to Charity and Education

Movement to Promote Business Giving to Colleges

Arecent Decision by a New Jersey state court, dispelling doubts as to the right of an industrial corporation to donate a share of its profits to an educational institution, has given new impetus to the rapidly spreading movement to persuade business to come to the aid of hard-pressed colleges and universities. The movement, initiated less than five years ago, already has won the active support of several hundred colleges in all sections of the country and of prominent business leaders. Faced by sharply increased costs not matched by a compensating rise in endowment income or gifts from individuals, institutions of higher education not supported by taxes are seeking contributions from corporations as an alternative to government aid.

Corporations at present are giving away annually an aggregate amount estimated to exceed $300 million, but only about one-fifth of this goes to education. A survey conducted by the Russell Sage Foundation in 1951 showed that community chests and other welfare agencies are the chief beneficiaries. They receive more than two-fifths of the sum of all corporation donations, and gifts for health purposes account for more than one-fourth of the total. Groups and individuals now seeking increased business support of educational institutions want to achieve that objective, not at the expense of other recipients of gifts from corporations, but through a substantial expansion of the total amount of corporation benefactions.

Initiation of Corporation Giving in First Would War

Business did not begin to play an important philanthropic role until comparatively recent times. Most corporation officials formerly recognized no obligation in that regard. Their legal responsibility was to stockholders, and their practical concern was so to conduct business operations as to show a maximum profit for the stockholder owners. Giving to worthy causes was a matter for individuals acting in their private capacity. A change came about with growth of the idea that corporations and other business concerns and the communities In which they operated had mutual interests and obligations. At the same time, formation of community chests and the development of comprehensive and highly organized methods of fund-raising made it almost inevitable that business establishments should become contributors to city-wide and nation-wide campaigns.

ISSUE TRACKER for Related Reports
Charities and Philanthropy
Commercial Law