At a time when regulators have forced companies to come clean with investors on many fronts, at least one area has largely escaped scrutiny donations to charities.
Public companies get billions of dollars in tax breaks for charitable contributions, but the Securities and Exchange Commission does not require that the donations be disclosed to shareholders. And filings to the Internal Revenue Service are confidential.
A Business Journal review of corporate contributions found that many large companies in Los Angeles either don't keep track of their donations or are unwilling to disclose what they give.
Of the 300 largest public and private companies, just a dozen responded to inquiries from the Business Journal. Only the 990 forms that corporate foundations are required to file with the IRS were used in constructing the Business Journal's list; millions of dollars in donations given through other means were excluded.
"About half of all corporate philanthropy is not disclosed to the public," said Rick Cohen, executive director of the National Committee for Responsive Philanthropy, a non-profit watchdog group in Washington. "Many corporations give through their foundations, and then there are other gifts from the president's office or the marketing department that either are too controversial or inconsequential to report."
But change may be coming.
Last week, the Senate Finance Committee held hearings on proposals to reform non-profits. The IRS, several state attorneys general and a few watchdog groups are questioning how corporations and non-profits account for their tax-exempt dollars. Last year, the IRS increased the amount of resources it devotes to examining non-profits.
"Enhancing accountability of the nonprofit sector depends on the availability of data," William Josephson, New York's assistant attorney general in the charities bureau, said in Congressional testimony last year. He claimed that 25 percent of Form 990s filed by non-profits are incomplete, inconsistent or even false. "We will not be able to take full advantage of available information without fundamental changes in the way it is collected, processed, and disseminated."
Corporate foundations, which rely on a single donor for their money, can be savvy about getting the biggest bang for their buck from philanthropy.
Amgen Foundation Inc., the second-largest corporate foundation in Los Angeles with $111.5 million in assets, last year arranged a partnership with the Public Broadcasting System in which the Amgen Inc.-controlled entity donated $1 million to be a sponsor of an upcoming four-part series on the health care system.
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