View all Articles

Smarter Corporate Philanthropy

Culture Philanthropy

GM would help itself and the public by reorienting its charitable dollars to STEM education and away from fashionable green causes and the arts.

The purpose of corporate philanthropy has been a subject of debate for several decades. Milton Friedman and others have said that corporate philanthropy should serve shareholders and employees, in which case it should be aligned with basic corporate purposes. After all, they argue, those funds belong to the shareholders, not to the public or to the executives deciding how to allocate charitable dollars. But in the real world, corporate philanthropy is often used for other purposes — to express the charitable interests of executives, for example, or to win goodwill in the local community, or to shield the corporation from criticism by organized advocacy groups. These are issues that have been raised anew by General Motors’ recent announcement that it plans to change the way it allocates $30 million in charitable donations every year.

In what some described as a blow to local nonprofits in Detroit, Jackie Parker, director of GM global philanthropy and corporate giving, explained:

What we’re more interested in funding is programs so that we can measure societal impact and have a deliverable back to our shareholders and the folks that are interested, investors, potential consumers, potential employees, and show them what difference General Motors is making in the community.

Though Parker and her colleagues have yet to announce which groups will lose funding, it appears from the announcement that they will be small nonprofit operations, especially those associated with the arts. Juanita Moore, president of the Charles H. Wright Museum of African American History, noted at a recent panel that she was worried about what would happen to her institution if GM changed its philanthropic strategy.

How is GM’s money likely to be spent? According to the Detroit News:

Read the entire piece here at National Review Online


James Piereson is president of the William E. Simon Foundation and a senior fellow at the Manhattan Institute. Ms. Riley is a senior fellow at the Independent Women’s Forum.

This piece originally appeared in National Review Online