Are corporate charitable contributions public information?

[kmiklas]

Dear All,

1. Are corporate charitable contributions public information?

Example: Apple (Nasdaq:AAPL) gives $1M to "The Johnny Appleseed Foundation," a 501c3 charitable organization dedicated to planting apple seeds across the country.

a. Is APPL required to report this information?
b. Where would this information be?
c. Is this required as part of any SEC filing?

2. Along the same lines, are charitable organizations required to disclose and name their benefactors? In the above example, is The Johnny Appleseed Foundation required to disclose AAPL as a benefactor on any official document?

Please note that I'm only looking for charitable, and not political, contributions. As I understand it, they fall under different statutes.

Thanks for your help, and have a profitable day!

Sincerely, Keith

 

[pyradius]

I suppose this information is a bit old, but as of 1999 the answer would be no, according to this: http://www.jstor.org/stable/40687874?seq=1#page_scan_tab_contents

 

[Sig]

Dear All,

1. Are corporate charitable contributions public information?

Example: Apple (Nasdaq:AAPL) gives $1M to "The Johnny Appleseed Foundation," a 501c3 charitable organization dedicated to planting apple seeds across the country.

a. Is APPL required to report this information?
b. Where would this information be?
c. Is this required as part of any SEC filing?

2. Along the same lines, are charitable organizations required to disclose and name their benefactors? In the above example, is The Johnny Appleseed Foundation required to disclose AAPL as a benefactor on any official document?

Please note that I'm only looking for charitable, and not political, contributions. As I understand it, they fall under different statutes.

Thanks for your help, and have a profitable day!

Sincerely, Keith

A 501(c)(3) is most certainly not required to list their donors in any way.

A public corporation does have to provide their financials, and if you understand how to read them you could easily see how much they'd donated to tax exempt organizations in aggregate. There's nothing that I'm aware of that would require they break down individual donations though.

 

[kmiklas]

I did some research, and found an answer. It's not an easy one, but it will give me what I need. Interested party (the "Party") is entitled to view corporate ("Company") tax records, per the following conditions and process. Reference below. Not sure if this is just in the state of Texas; I'm still researching the issue:

1. Party must be a common shareholder; just one share is sufficient.
2. Party must submit their request physically in writing. That is, via postal mail.
3. Party must state their reason for examination of returns. Company may deny access if reason is not legally acceptable.
4. Company is under no obligation to mail, email, or provide material in any way. Party must physically visit the office, during regular office hours, where tax records can be examined on site. Copies are permitted.

A. Fundamental Shareholder Right
The shareholder’s right to examine the books and records of the corporation “is a privilege … incident to his ownership of stock.” Johnson Ranch Royalty Co. v. Hickey, 31 S.W.2d 150, 153 (Tex. App.—Amarillo 1930, writ ref’d). The right to inspect corporate books and records exists so that the shareholder may “ascertain whether the affairs of the corporation are properly conducted and that he may vote intelligently on questions of corporate policy and management.” Id. “The predisposition of the law is in favor of allowing reasonable inspections of corporate books and records.” Citizens Association for Sound Energy v. Boltz, 886 S.W.2d 283, 291 (Tex. App.—Amarillo 1994, writ denied), cert. denied 516 U.S. 1029 (1995). [1]

1. http://www.shareholderoppression.com/texas-inspection-rights.html

 

[Sig]

I did some research, and found an answer. It's not an easy one, but it will give me what I need. Interested party (the "Party") is entitled to view corporate ("Company") tax records, per the following conditions and process. Reference below. Not sure if this is just in the state of Texas; I'm still researching the issue:

1. Party must be a common shareholder; just one share is sufficient.
2. Party must submit their request physically in writing. That is, via postal mail.
3. Party must state their reason for examination of returns. Company may deny access if reason is not legally acceptable.
4. Company is under no obligation to mail, email, or provide material in any way. Party must physically visit the office, during regular office hours, where tax records can be examined on site. Copies are permitted.




1. http://www.shareholderoppression.com/texas-inspection-rights.html

Actually that page states that "The “right to inspect the books and records of a corporation, is not an absolute right, regardless of the stockholders' motive.” Guaranty Old Line Life Co. v. McCallum, 97 S.W.2d 966, 967 (Tex. Civ. App.—Dallas 1936, no writ). In Guthrie v. Harkness, 199 U.S. 148 (1905) the United States Supreme Court noted that courts will not compel the inspection of the bank's books under all circumstances."
I'm going to say good luck to you walking writing a letter to any public company and asking to see their tax returns and all their books, not going to happen. The proof is in the fact that you don't see analysts, competitors, and shareholder activists ever getting a copy of a company's tax returns, something they'd certainly all do if it were as simple as writing a letter. In any event, let us know how it goes for you. I'd love to be proven wrong with an actual experience.

 

[kmiklas]

I'm going to say good luck to you walking writing a letter to any public company and asking to see their tax returns and all their books, not going to happen. The proof is in the fact that you don't see analysts, competitors, and shareholder activists ever getting a copy of a company's tax returns, something they'd certainly all do if it were as simple as writing a letter. In any event, let us know how it goes for you. I'd love to be proven wrong with an actual experience.

Agreed. No way that I can do this without a lawyer behind me. I have calls out to two firms now for a legal opinion. Perhaps if I hire a firm that specializes in shareholder interest to write the letter, I'll have a better shot.

Of course, the problem here is co$t. I have no idea what the price of such a letter would be.

To add a bit of context, I'm researching for The OVerus Organization. Part of the rating system includes examination of corporate contributions. An accurate rating cannot be made without reliable information; e.g., corporate tax returns.
http://www.overus.org/ratings.html

 

[kmiklas]

Update: I waited a few days, and neither of the law firms that I contacted returned my call. I then asked an accounting buddy, and got the real deal.

He said that there's no way in hell that I'm getting this information. I'm asking for a check ledger, and that's top-secret. It's much like doctor-patient privilege; that information is highly classified. Only a select few; the sanctum sanctorum have access to that info: execs, board members, and the CFO's office.

As for the right to review the tax records as a shareholder, that's also bunk. They will give people like me a "client copy" that been sanitized. Example, there might be one line item: "$120,000 charitable donations." That's it... no named beneficiaries, no breakdown... nothing.

Surprisingly, it's quite difficult to get the information he needs even as the accountant of record. He really has to hound clients to get what he needs--and he's paid and under contract to act in the interest of the client! For a guy of the street, like me, who buys one share... Ha! He laughed and sneered right in my face, and said that I would get worse treatment at the corporate office.

Don't get me wrong, I love the guy. He gave me the truth.

Anyway, I'm not sure what to do now. I'm open to suggestions.

 

[Sig]

Update: I waited a few days, and neither of the law firms that I contacted returned my call. I then asked an accounting buddy, and got the real deal.

He said that there's no way in hell that I'm getting this information. I'm asking for a check ledger, and that's top-secret. It's much like doctor-patient privilege; that information is highly classified. Only a select few; the sanctum sanctorum have access to that info: execs, board members, and the CFO's office.

As for the right to review the tax records as a shareholder, that's also bunk. They will give people like me a "client copy" that been sanitized. Example, there might be one line item: "$120,000 charitable donations." That's it... no named beneficiaries, no breakdown... nothing.

Surprisingly, it's quite difficult to get the information he needs even as the accountant of record. He really has to hound clients to get what he needs--and he's paid and under contract to act in the interest of the client! For a guy of the street, like me, who buys one share... Ha! He laughed and sneered right in my face, and said that I would get worse treatment at the corporate office.

Don't get me wrong, I love the guy. He gave me the truth.

Anyway, I'm not sure what to do now. I'm open to suggestions.

I'm not surprised to hear that, it lines up with my expectation. Have you tried contacting the company division that handles donations, explaining what you're doing, and asking them if they have a system in place to help you? I'm guessing the bigger companies may already have a letter from their accountant verifying their donations breakout without requiring them to share their books or anything. If you can't find the appropriate person using Google/LinkedIn I'd suggest the Investor Relations department as a good entry point.

 

[kmiklas]

I'm not surprised to hear that, it lines up with my expectation. Have you tried contacting the company division that handles donations, explaining what you're doing, and asking them if they have a system in place to help you? I'm guessing the bigger companies may already have a letter from their accountant verifying their donations breakout without requiring them to share their books or anything. If you can't find the appropriate person using Google/LinkedIn I'd suggest the Investor Relations department as a good entry point.

Thanks, Sig. I will give it a shot.

I suspect that they will give me very little; or, the information that I _really_ need will be conveniently omitted/buried. Once I explain that I'm rating companies against Christian ideology based on their charitable contributions, I'll get nothing. Example: assume that a company is donating to, say Planned Parenthood. Why would they send me that information, only to receive an "F" rating, and perhaps bring public heat upon the firm?

I really can't trust any information that a company sends me. It's not a credible source. I need a disinterested 3rd party. The IRS would be the ultimate--but that's just a pipedream.

 

[Sig]

Thanks, Sig. I will give it a shot.

I suspect that they will give me very little; or, the information that I _really_ need will be conveniently omitted/buried. Once I explain that I'm rating companies against Christian ideology based on their charitable contributions, I'll get nothing. Example: assume that a company is donating to, say Planned Parenthood. Why would they send me that information, only to receive an "F" rating, and perhaps bring public heat upon the firm?

I really can't trust any information that a company sends me. It's not a credible source. I need a disinterested 3rd party. The IRS would be the ultimate--but that's just a pipedream.

If you're trying to find "negative" donations then yes, you're probably out of luck. I was thinking more of something like the environmental sphere where a company would want to showcase who and how much they'd donated to. Sorry I don't live in a world where it's considered bad to give to a non-profit of any kind so the thought never crossed my mind.