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Saturday, May 24, 2014

A look at corporate charitable contributions

U.S. corporations donated 6.7% of the total amount given away by the U.S. public in 2011. In terms of billions of dollars, the total amount of funds allocated by companies for charitable causes was $14.55 billion versus $217.79 billion for the American public. Goldman Sachs donated $241.3 million in 2011 and its net income was $4.44 billion, which makes its total donations 5.5% of total income. However, in terms of total revenue for that year or $34.82 billion, the actual percentage becomes many times smaller.

When viewed from a wider lens, the amount is only a very small fraction of what companies earn each year. To illustrate, Apple Inc.'s 2013 annual net income was $37.04 billion, or more than 154% more than the total corporate donations for the year; this fraction becomes many times smaller or less than .5% when corporate donations are divided by the top 10 largest U.S. businesses by net income. That is not to say, no charity is better, and that charitable tax benefits are a bad idea. It is to say the motivation or intent of U.S. corporate charitable donations are not necessarily benevolent.

The infographic below details some of the donations made by large U.S. companies in the past:

Corporate Charity