Is Corporate Philanthropy Unethical? No, But It’s Important to Ask the Question

I gather not very many readers sample the links on Ethics Alarms, which is a shame. They contain a lot of different approaches to ethical issues, from many philosophical approaches. Well, heck…I use them , which is really what they are here for. One of the more original thinkers represented among the various sites is Jason Christopher Cockrell, author of The Worst-Case Scenario. It appears that he has abandoned blogging, which is a shame, but his last post, at the end of 2010, was full of surprises. In it, he offered an argument against corporate charity, something I have never heard anyone criticize on any level, except to say that there isn’t enough of it.

The theory behind corporate philanthropy is that it is a win-win for everyone involved. The corporation enhances its public reputation and visibility, improving employee moral and making investors proud to hold stock. Society benefits from substantial contributions that support everything from cancer research to Sesame Street to regional theater. It is hard to imagine what the charitable landscape would look like without corporate philanthropy, but the thought of eliminating it is sufficient to give any professional fundraiser hives. I know—both I and my wife were development officers for many years.

Cockrell is having none of it. “There are many reasons to oppose corporate charity,” he begins. “It is deceptive, immoral, and border-line criminal. It hinders economic growth for the wealthy as well as the impoverished, and promotes a culture of ambiguity, pompous grandstanding, and anti-productivity.”

Tell us how you really feel, Jason!

Here is how he closes:

“Thus the executive who commandeers funds entrusted to him by others and uses them for his own purposes – even ostensibly charitable ones – is presented with an incentive structure which rewards grandstanding and hollow self-promotion, while the executive who commits the investors’ funds to their intended purpose is required to produce real benefits for the consumers in order to stay afloat. This leads us to a final and critical point which those of you who know me well may have realized was coming from the beginning: So-called corporate “charity” is not charity at all. It is avaricious crime which damages the people it claims to help and helps the people it claims to damage. Executives who presume to achieve moral superiority by being sacrificial with other people’s money are not generous; they are vicious. The particular charities which they happen to favor are deemed worthy of everyone else’s support. So if an executive happens to feel especially strongly about one kind of cancer because of a death in his family, others who suffer from a different cancer must see a loss in funding because the executive is quite happy to steal from the populace and redirect contributions to his favored cause. As a result, charity organizations focus less on creating real results which they can demonstrate to the average person and more on befriending the higher-ups. So-called corporate “charity” robs the investors who risked their money to support entrepreneurship, raises costs to consumers, lowers employee wages, corrupts charities, empowers executives to an even greater extent, and ultimately does exactly the opposite of its purported goal: getting money to charities to help people in need.”

Oh, I think he’s dead wrong. The important thing, however, is that he is challenging conventional ethical wisdom, using ethical analysis to look anew at a question that most of us would say was settled. Ethics is the study of right and wrong, and, unlike morality, it requires constant inquiry and acknowledgement of the continual evolution of values and ideas. Sometimes we examine conduct that has always been presumed to be virtuous, and conclude that society has been misguided, sometimes for centuries. Sometimes a single iconoclast points out that something we always assumed was right is really wrong, or vice-versa, and nobody remembers why we ever thought otherwise. Cockrell’s post is exactly what ethics is about–looking at conduct from all the angles, and making everyone else reconsider old assumptions about what is good.

You can read all of the post, and Jason’s reasoning, here. I’m not ready to give up corporate philanthropy. For one thing, I believe that without philanthropic influences within corporate cultures, companies would be more ruthless and less trustworthy than they already are.  I have to admit,  however, before Jason wrote his article I never considered that there were any arguments against the ethics of corporate charity at all.

Assuming that conduct, any conduct, is right based solely on tradition, habit, consensus or your proverbial gut is reckless and lazy, and ultimately undermines our quest for a more ethical culture. That, and not the unethical nature of corporate culture, is the most valuable lesson of Cockrell’s post.

9 thoughts on “Is Corporate Philanthropy Unethical? No, But It’s Important to Ask the Question

  1. Thanks to professional jagoff Michael Moore, we know that charity can be used as a weapon, so this isn’t too remarkable.

    On the other hand, there are the people who swear by Ayn Rand’s philosophy and think all charity is bad for THAT reason.

  2. So I guess the summary is: CEO’s should not be giving to charities, but instead should be paying those funds as additional dividends to stockholders so that THEY can donate that money to the charity of their choice.

    Since the underlying premise is expanding individual choice, I’d ordinarily say that I’m behind this 100% . . . and in principle, I am.

    But then there’s that tax code, where corporate dividends are taxed once on the corporation’s income tax, then taxed a second time on the tax returns of the shareholders. Granted, if a shareholder donates the money, it’s deductible to him or her, but if the corporation donates the money, it’s not taxed in the first place (which means the charity gets a larger donation).

    That’s our tax code: big, fat, complicated, and ALWAYS influencing behavior (for good or ill) because, well, that’s the whole reason it’s big, fat, and complicated.

    So if you want to declare corporate charity unethical, you’d first need to eliminate charitable deductions for corporations (or just eliminate corporate income tax).


  3. Well, who ever thought that crusty old Ethics Alarms would be swayed by soppy sentiment. Corporate philanthropy involves a wonderful paradox: If good-intentioned, then unethical. If crass, then ethical. Here’s why:

    The money doesn’t belong to the corporate deciders, it belongs to the stockholders. If the CEO is feeling charitable he can give away some of HIS money. But if he gives away the corporation’s money he’s no better than Robin Hood, robbing the stockholders to give to his favorite worthy cause.

    On the other hand, if the CEO decided that corporate giving is valuable publicity for the corporation–say, Philip Morris giving to the ballet–the motive is profit-driven and the act is completely ethical.

    This is a rare example of ethics and motive being crosswise.

  4. Every single charitable conttibutor — corporate, foundation, individual — makes their choices based on personal beliefs, guilt, what it will get them (in the afterlife or here), their favorite pastimes or concerns (art, literature, cats, dogs, an alma mater, etc. That’s the way it works. The “few bad apples” don’t have to ruin the whole barrel of the most generous nation in the world. Should we have “charity squads” along with “death squads?” And what so trustworthy agency would be responsible for making THOSE decisions? Pretty darn scary to me…

  5. I am the author of the Worst-Case Scenario, and I have returned to blogging as of today. I am flattered by your taking notice of my article and applaud you for the intellectual honesty with which you present a view you do not hold.

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