Five Reasons Corporate Philanthropy Remains a Mystery

When I set out to write about the nation’s most important corporate philanthropies, I knew I would have to do some research. But I had no idea that what appeared to be a relatively painless writing assignment would turn out to demand the skills of an investigative reporter. At times, the more I looked, the more confused I got. I felt like an archaeologist on a dig, finding the odd bone or relic, but emerging with lots of unanswered questions. Here are five reasons why.

“Corporate philanthropy” is a pretty expansive term. Many corporations feel free to include almost anything in their philanthropy totals in addition to cash grants: loans, equity stakes, in-kind contributions of products and services, volunteer hours and employee donations. Even a veteran New York Times reporter had a hard time unpacking what JPMorgan Chase’s $30 billion pledge in 2020 to “close the racial wealth gap and advance economic inclusion” actually meant. As it turns out, its additional commitment of actual philanthropic dollars — not loans, investments and other offerings it could profit from — totaled in the millions, not the billions.
Corporate foundation 990s are often several years old. If a corporation has a foundation, and if it reports in a timely fashion to the IRS through its 990s, it may be possible to get at least a somewhat accurate picture of its grants and grantees. But those are two big “ifs.” It is not unusual for the most recent publicly available federal tax reports to be several years old. If a return is from 2019, that means it won’t reveal giving during the pandemic, after the murder of George Floyd and throughout Russia’s full-scale war on Ukraine. Even worse, sometimes it’s difficult to determine whether a corporation still has a foundation at all. For example, the Google Foundation’s last federal tax return covered the 2018 tax year, and there are no returns for Google.org, what Google refers to as its philanthropic arm.
Companies don’t need to use foundations at all. When a company chooses to do its grantmaking without using a foundation, as now appears to be the case with Google, it becomes impossible to keep tabs on such giving beyond what the company chooses to announce. Grants channeled through donor-advised funds or philanthropic LLCs are essentially untraceable.
Company websites are rarely great sources. Corporate websites do shed some light on corporate philanthropy. But these sites are often long on hype and short on facts. It seems like every big business creates some “innovative” program to help society every other week. But amid the thousands of words, hard numbers are often hard to find. If only all corporations were as direct as Intel Corporation, which uses one simple chart — no videos or fancy graphics — to explain in detail how it spends its philanthropic dollars.
It’s easy to double count. Was that $20 million grant to improve health equity part of that $1 billion the company pledged three years ago to reduce disparities in health care? Or something different? Very few corporations make it easy to match up individual monetary commitments with the countless philanthropic and CSR programs they launch with the apparent frequency of captains of some kind of merchant fleet.

High-profile corporate giants — under fire from both left and right — may feel they have good reasons to cloak their giving in vagueness or outright secrecy. But this lack of transparency means there is no way for the public to verify the philanthropic claims of some of the wealthiest and most powerful actors in U.S. society. All we have is the company’s word, and in many cases, no list of grantees to check with to confirm.

But philanthropy isn’t a hobby for businesses. It’s part of the corporate playbook. Charitable giving affords corporations healthy tax breaks — they can deduct gifts of up to 10 % of their pretax income from their tax bill. Perhaps even more importantly, corporate philanthropy enhances a company’s reputation, which is particularly valuable when, say, it has been fined for cheating consumers or faces environmental protests for investing billions in fossil fuels.

Corporate giving can also help burnish firms’ reputations with lawmakers and regulators, a valuable option when companies want to complete a merger or expand their footprint in new technologies like AI. And maybe most worrisome, corporate grant dollars can be used to fund misleading research, influence public policy and affect electoral outcomes. Key stakeholders — including employees, shareholders and consumers — have an interest in knowing where such funds are going.

With so much at stake, this lack of transparency is not just an annoyance to reporters like me. When the philanthropic claims of large, publicly held companies engaged in tax-deductible giving are difficult if not impossible to verify, that’s a disservice to all of us.

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