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Jens 'n' Frens
Idle thoughts of a relatively libertarian Republican in Cambridge, MA, and whomever he invites. Mostly political.
"A strong conviction that something must be done is the parent of many bad measures."
-- Daniel Webster
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Friday, July 11, 2003 :::
Since the early '80s, Berkshire Hathaway has had a shareholder-designated charity contribution plan, whereby each class A shareholder is allowed to designate a charity, and Berkshire Hathaway sends a check. I believe the amount was $18 per share last year, or about one four-thousandth of the price of a share, so it's not a lot, but it's an interesting way to allow shareholders to donate to charities in a way that doesn't provide them with any tax liability, and allows Berkshire to write off the contributions (you'll note that if Berkshire paid out a dividend of $18 and the shareholder signed it over to a charity, the shareholder still wouldn't have a net tax effect, but Berkshire wouldn't be allowed to write it off).
In recent years, this has come under attack, mostly by pro-lifers who object to the fact that a lot of the funds (much of plurality-shareholder Warren Buffett's portion) goes to Planned Parenthood, and by shareholders concerned about the impact of a potential boycott. I think there was a shareholder-sponsored resolution to scrap it at the 2002 annual meeting (it might have been a year earlier). Apparently, they're discontinuing the program. The original press release is available in PDF.
Berkshire Hathaway has terminated its shareholder-designatedcontributions program, which has distributed approximately $197 million since it was begun in1981. This program has allowed holders of Berkshire’s A shares to designate a per-share sumfor the company to contribute to as many as three charities, the only requirement being that thedesignee have 501(c)(3) status. The program thus allowed a wide diversity of donations, someof them controversial but all outside the control of Berkshire.
In recent years, about 3,500 charities have been designated annually, with schools thefavorite (about 800 different institutions have benefited), followed by more than 400 churches and synagogues.
I'm a little bit disappointed (even though this slightly benefits me, since my class B shares lose nothing except a small annual leak of funds to charities designated by others). But I don't think anyone -- the boycotters or the board of directors -- has behaved irrationally. An email forwarded to me by one of my housemates seems to imply that Berkshire had a "planned parenthood contribution" program, ignoring that there were a lot of other charities receiving funds (many of which -- churches and synagogues -- could be considered on their side). But that's just the simplification of politics, and it's entirely possible that the contributions to Planned Parenthood exceeded the combined contributions to pro-life causes.
::: posted by Steven at 1:03 AM
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