The public good?

One of the things I was once called on to do was review a report on companies and their charitable giving. A lot of what they consider charity is not what we would classically consider charity -- going to the Latin root of the word caritas, giving to the needy from Christian love. A lot of it is DEI-based (legal discrimination, in other words), encouraging grievances and tribalism; some goes for education, doing the same; and a lot goes for climate change and other green causes that will never make a difference in anything and never improve lives of anyone except for people in those industries. 

But that's only part of the problem, as I see it. 

When America made stuff: Too busy inventing to hector people 

The main practical problem is that while these companies are making themselves feel better and handing out awards to one another for their good deeds, they're making their products and/or services more expensive. You know the money isn't coming off what the officers get paid. So the company that's pledging 15% to fight climate change or 3% to promote equity or 12% to fund abortions for transwomen or 7% to fight normalcy is just making their stuff pricier. It would be like you insisting your boss pay you 20% more, which you promise you will send to Leap for the Cure! to save victims of Jumping Frenchmen of Maine disorder. Your boss might do that... or might sack you and hire someone who doesn't insist on the extra 20%. 

But isn't it a tax write-off? One may ask, and I thank you, One, for that thought. The answer is: Yes and no. U.S. companies may deduct up to 10% of pre-tax income in a given year, so yes. But the real value is in the publicity. The Harvard Business Review noted a couple of decades ago that "Tobacco giant Philip Morris, for example, spent $75 million on its charitable contributions in 1999 and then launched a $100 million advertising campaign to publicize them." 

Of course, these bighearted types will try to use their good intentions as cover when the chips are down -- like the walking tumor Harvey Weinstein trying to hide behind his support of gun control when the walls were closing in, or the so-called effective altruism touted by the now-disgraced Sam Bankman-Fried. 

One way or another, I believe that companies are using money that could be used as profits for investors (stimulating economic growth) or to lower prices (ditto), and giving that dough away to largely useless causes, then congratulating themselves and expecting parades in their honor. 

Even if they just paid the taxes and skipped the write-off, they would in theory make the tax burden on you and me less heavy. But instead, the cost of their beneficence is passed on to the consumer.

If everything is being made more expensive so companies can give money to a lot of charities or less worthy causes, then the rest of us have less spending power with our money. And as we know, a lot of "good" causes turn out to be only good for their officers' wallets. 

On the whole I suspect corporate giving does more harm than good. I'd like to see a genuine economist like Thomas Sowell do the math on this, and I'd bet a burger than I'm right. 

But it hardly matters. Companies don't really care if anyone is helped. The real importance is the puffery from Doing Public Good, even if it does the public bad.