Question Should business/corporations give to charity? Or should they return the profits to shareholders, and let them decide what to do with it?

Accepted:
July 2, 2009

Comments

In principle, the decisions made by corporate managers are, as a matter of contract and law, supposed to reflect and be answerable to the will of the shareholders. I can't think of any compelling reason to think that corporations should give to charity. But let's be clear what's at issue here. Is it nice when they do so? Of course it is. Those who benefit from that charity (or those charities) to which a corporation might donate are certainly benefited. Do corporations have responsibilities, as a result of the benefits they gain from society? Sure they do--that's why they either pay taxes or else make other agreements with cities, states, and nations that are supposed to exact a fair exchange of the goods that are enjoyed by the corporation and the goods returned back to the community. But I can't see how or why in addition to paying their fair share (in jobs, or taxes, or whatever) in exchange for receiving the goods they receive from society, they also have some responsibility to give to charity.

Let me put the point very simply. Suppose you hire me to manage your money. Then someone else notices that I have access to all your money, and tells me that I should use some of that money to support charity. Maybe that would be OK with you, but it is hard to see that just because I control the use of a certain amount of money, I should use it to support charity. My responsibility is to you (my shareholder)--the fact that I control your money does not add some other responsibility as to how I should use that money, above and beyond the terms of my contract with you (and all, obviously, subsumed under and regulated by the laws of the land).

Question Should business/corporations give to charity? Or should they return the profits to shareholders, and let them decide what to do with it? Accepted:July 2, 2009

Question Should business/corporations give to charity? Or should they return the profits to shareholders, and let them decide what to do with it?

Accepted:
July 2, 2009