The other day I was watching a local news program and one of stories concerned a major donation to a social services program by a big corporation. I'm not talking about chump change either; the donation was for over $25 million. For the people the program serves, this was like (excuse the term) manna from heaven.
The news anchors talked effusively about the corporation's generosity. They made comments like, "They saw a community need and stepped up to the plate big time!" A company exec being interviewed for the story soaked up all the praise and baited the reporter to add more.
Does this mean that this corporation (and all like it) have discovered their soul? That's what they want you to believe! They want you and I to think such donations represent altruism to its greatest extent. Sadly, helping others is not the real motivation behind corporate giving -- reducing the tax bill is!
Every charitable donation is a means of reducing the amount of taxes a corporation must pay into public coffers. Along with other tax loopholes, this is how many of this nation's wealthiest corporations have gotten away with paying zero income taxes or even receiving refunds. They strategically give to pet causes -- often religious ones -- and these acts DEFUND public services.
This is the main point delivered by Murtaza Hussain in a guest column on Glen Greenwald's Salon blog.
The private social safety net, provided by corporate donors as compensation for the public one which their tax avoidance helps shred, is a poor substitute for democratically accountable public spending. Besides being poorer, free of public oversight, and geared primarily towards public relations efforts, the private safety net is a rug that can and will be pulled out from under its beneficiaries at the slightest notice. Goldman Sachs, which generously gave $320M in charitable contributions in 2010 and $500M in 2009, drastically cut its charitable budget to $78M a year in 2011 in response to reduced profits while making minimal cuts to employee bonuses and other compensation.The upshot is that corporate donations are NOT gifts that keep on giving -- in reality, they are gifts that keep on taking!
“Doing God’s work”, as Goldman CEO Lloyd Blankfein famously described the companies activities is apparently an elective commitment based on market conditions. Whereas as a strong public safety net is managed democratically by its beneficiaries, corporate charity can and will disappear the moment it is deemed necessary which exemplifies clearly why it is no substitute for government spending.
When one important sector of the economy is allowed legally to welch out of their responsibility to the whole, one of two things occurs: A) Others must pick up the share of taxes the corporations don't have to pay or B) Public services become degraded. As we have seen over the past decade, that latter option is playing out in spades across the nation.
As the Taoist sages -- along with a fellow named Jesus -- made clear, giving when you expect more back isn't about charity; it's about naked self-interest. That's the true motivation behind corporate giving. They toss peanuts our way in order to lavish themselves with greater corporate profits -- profits they then use to undermine democracy!