Tuesday, November 25, 2008

More Bad News Re: Corporate Donations

The Wall Street Journal today reports more bad news with respect to the rate of corporate giving:

The pipeline from corporate America to the nation's charities is starting to dry up, as losses in the stock market mount and the U.S. recession deepens. With many large organizations depending on corporate largesse, their futures are suddenly uncertain.  Billionaires and large banks are pulling back on commitments or scaling back pledges. Some generous givers, such as Bear Stearns Cos., Lehman Brothers Holdings Inc. and Merrill Lynch & Co., have folded or been bought. The pain is spreading to other big institutional donors and trickling down to New York's famously lavish charity-gala scene, which is suffering lower turnouts and fund-raising hauls.

Even the Bill & Melinda Gates Foundation reports that it will slow down its grant-making:

On Monday, the Bill & Melinda Gates Foundation said it would slow the pace of grants next year -- a sign that even the titans of philanthropy are rattled by current economic conditions. Large donors signaling tighter times include David Koch, an executive vice president of Koch Industries Inc., an energy and manufacturing company and the largest private corporation in the U.S.; Sheldon Adelson, the Las Vegas casino mogul; and Maurice "Hank" Greenberg, the former chief executive of AIG Inc., the large insurer.  The chilled giving atmosphere arrives just ahead of the holiday season, when charities tend to reap the most donations. Lower donation totals threaten a range of organizations, from antipoverty groups to community-based meal providers and major cultural institutions.

I tend to think there is an inverse relationship between corporate giving and unrelated business.  As giving decreases, unrelated business increases.  Should we therefore expect a rash of deficiency notices relating to charities underreporting unrelated business income?



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