Opinion: Why Companies Should Give to Charity

Every dollar spent on charity by the average corporation could increase its profits by $2 to $3, which is just one reason Gene Epstein, economics editor of Barron’s magazine, argues in favor of the practice in a Wall Street Journal column.

In the sample of 251 corporate donors tracked by a professor at New York University, he writes, the average dollar value of charitable giving came to only 0.1 percent of average sales revenue.

What these same firms spent on advertising alone was more than 50 times greater, Mr. Epstein notes. For the rate of return on the charitable dollar to do as well, he writes, it needed to return only one-fiftieth as much—far less than the 200 percent or 300 percent he found to be the case.

Also read the Chronicle’s most recent report on corporate giving, with information on the top companies from last year’s Fortune 500.

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