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I’m not a big fan of corporate philanthropy in general. Everything about the model is wrong; Instead of paying taxes, the heads of the company, who are not elected by anyone and are not accountable to the public, decide where the money goes. Often, it’s just a corporate PR strategy to assuage community anger.
But still, I read a special section of the San Francisco Business Times this week about how wonderful our local oligarchs are at sharing the wealth. Introduction from publisher Maryam Haas:
Our region has struggled with generous corporate citizens and a dedicated workforce providing the necessary cash, economic and political influence.
Then, as it always does (and the information is often useful), BT published a list of the top philanthropists in the Bay Area, ranked by how much they give to charity.
It’s absolutely fantastic.
Let’s start with donor number two, Google. The company gave $57.7 million to Bay Area charities in 2021. Sounds like a lot of money.
Except that Google’s revenue that year was $257 billion, while its profit was $91 billion.
So as a percentage of the profits, Google donates… a very small number and my calculator couldn’t handle it. We are talking about 0.06 percent, a rate so low that it cannot be measured by any standard economic model.
Genentech hasn’t reported earnings, but its 2021 revenue was $24.6 billion. For local charities: $10.21 million. That is 0.04 percent.
Cisco Systems: $13 billion profit, $28 million in charity. 0.2 percent
Intel: $22 billion in profits, $9.3 million in local charities. 0.04 percent
Oracle: $4 billion profit, $2.96 in domestic charity, 0.05 percent.
Yelp, $34 million profit, $221,000 to local charity, that’s 0.0003 percent.
The list goes on and on.
Some of the biggest local players, such as Twitter, Airbnb, Uber and Lyft, are not on the top 100 list, meaning they contribute less than $28,000 to charity. In 2021
Wow.
Let’s imagine that these companies all give five percent of their profits (which is a very small number) to individuals and organizations in need. The six major companies I listed give nearly $12 billion to local charities.
Or assume you pay a reasonable corporate tax rate of 40 percent. That’s about $60 billion in revenue for public needs (enough to address the homeless and affordable housing crisis in the state of California, for example).
These are not “generous corporate citizens.” They give basically nothing to the communities that made their fortunes.
This is why “corporate philanthropy” is a colossal failure.
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