The Daily Telegraph has had a go at Australia’s top 20 companies for not donating enough to charity. According to their analysis, the largest 20 Australian companies donated only 0.85 per cent of their profits to charity in 2009-10, with ANZ donating only 0.21 per cent. This is less than the 1 per cent deemed adequate by “social experts”.
I propose a different target: 0 per cent. Those profits belong to the shareholders and ideally, should be in their hands to decide if and how they will donate. These companies have an area of expertise and that is making profit by providing goods and services that people want. They should focus on that.
If these companies are interested in being a good corporate citizen, I’d prefer that they spent their time looking at their own operations and impacts rather than buying public standing through their charitable giving. I am sure that Woodside is better at preventing oil spills than selecting a suitable charity to help the homeless (or as often is the case in Perth, selecting the local theatre or music company to fund).
Having said that, in the same way that Milton Friedman did not want to condemn the cloaking of self-interested activities as “corporate responsibility”, I am not going to condemn any company that does give to charity. Charitable giving may buy customer support and reputation, which have value in themselves. Staff may prefer working for such an organisation. However, the meeting of arbitrary targets set by self-appointed social experts is simply a transfer from shareholders. I would prefer that those shareholders be left to make that decision for themselves.