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Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
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Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review May 8, 2006 / 10 Iyar, 5766

Executive discretion

By Rabbi Dr. Asher Meir


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Can top level management unilaterally give away money to corporate dollars to charity?


http://www.JewishWorldReview.com | Q: Our non-profit organization recently obtained a donation from a publicly owned corporation. The approval was given directly by the CEO, without going through any kind of committee. Can we keep the money?


A: The issue of corporate donations is a vexing dilemma in business ethics. Some groups, including some "corporate social responsibility" (CSR) investors, view the extent of charitable donations as an indicator of how ethical and socially responsible a company is. Other analysts consider such donations a breach of ethics, since management is giving away shareholder money without a clear mandate to do so. Rabbi Aaron Levine is his book Case Studies in Jewish Business Ethics, expresses a skeptical attitude towards such "manager's pet" donations for this very reason. Milton Friedman in a famous article asks why management should give away money to charity instead of distributing it to shareholders who are perfectly capable of giving it away themselves.


The confusion surrounding this issue is well illustrated by a recent meeting I had with the leader of an internationally known think tank. One of the first things this director told me was that his organization was highly skeptical about the entire field of "corporate social responsibility". Like Friedman, he felt that the main responsibility of corporations was to do a good job in the economic enterprises they undertake, and for which they were founded. A few minutes later this same individual complained that in the past his organization had regularly obtained important donations from major corporations on the say-so of leading executives sympathetic to the values of his think-tank, but that lately corporate donations had been delegated to lower functionaries who always want to know "What's in it for our firm?" Of course this attitude is the only one justified if we eschew the idea of corporate social responsibility!


In previous columns I have elaborated my own position: That such donations are justified when the company is in a unique position to provide aid. Perhaps the company gives money whose effectiveness is augmented by special expertise the company possesses, or by a special degree of oversight it can apply. Or perhaps the company is uniquely obligated to give aid because of some past transgression or because of neighborly obligations. This situation answers in large measure Milton Friedman's objection (as his article implicitly acknowledges).


The ideal situation for a public company is to have a transparent policy with explicit criteria for donations. This approach minimizes the worst risk: that management decisions are based neither on benefit to the firm nor on benefit to the society but rather on benefit to the managers themselves. (Such donations were one small part of the overall pattern of corruption that characterized the Enron Corporation.) It also enables shareholders decide if they truly desire to donate some of their profits in this way (as CSR shareholders certainly do).


In your case, the company has no such policy, and the money has already been given. I would recommend the following course of action: Ask yourself if you honestly feel that a donation to your organization fits in with the general management ideals of the donating corporation, as these would be expressed if they were to formulate an explicit donation policy. Your judgment should be based both on the relationship between your non-profit and the line of business of the giving firm, as well as on the amount. Many corporations would find it advantageous to give a modest sum to promote educational initiatives in the local community, but would not logically give any money to a religious organization or give any large sums to charity.


Of course the answer to this question will be partially dependent on your own actions. If you have the ability to publicize the donation in a way that will provide significant good will to the donor, then the chances are greater that the answer will be positive. Your answer should take into account any publicity you would be willing to provide.


If the answer is yes, it would be best to ask the manager who approved the donation to get acknowledgement from some more neutral figure. This would ideally be by the board, but realistically the board cannot get involved if the figure is relatively small. Probably there is some kind of community liaison or spokesperson who as part of his or her job is authorized to approve small contributions to local charities; it would be good for all involved if this person writes a letter expressing their awareness of the donation and affirming that it meets the company's general criteria. Make clear any potential you have for creating goodwill for the donor.


If the answer is no, or if the subsequent acknowledgement is not forthcoming or seems forced, you should give back the money. Clearly enunciate your desire not to accept donations that are not in accordance with the company's usual criteria.


Just as the donating company should not be dealing with these situations on an ad hoc basis but rather have a thought-out policy, the same applies to non-profits. Your organization should formulate a general policy for accepting donations from corporations which incorporates some of the ideas we have just discussed. This will avoid awkwardness in future situations. After all, you don't want to offend the generous manager who approved the donation; it is much easier to say "Our organization has a policy of not accepting such donations" than it is to say, "I don't think your donation is kosher". Charitable organizations are no less bound to have ethics policies than business firms are!


There is a remarkable parallel to this analysis in the Shulchan Aruch, the authoritative Code of Jewish Law. In chapter 248 of the second volume (Yoreh Deah), the Shulchan Aruch states that in general a guardian for minor orphans shouldn't give charity from their assets. The reason is that being minors, their judgment is not sufficiently developed for them to decide on charitable gifts. When they are grown up, the money will still be there, and they will be able to decide what to do with it. This is similar to the status of shareholders. The difficulty of reaching a consensus of shareholders is a disability not unlike that of minors, and like minors, there is no compelling reason for the "guardian" or manager to give charity since ultimately the money will reach the shareholder, in the form of dividends or proceeds, and then he will be free to use the money for charity according to his judgment.


However, there are two exceptions to this rule. One is that it is permissible for the guardian to give charity if this is for the benefit of the youngsters, by giving them a good name. This corresponds to giving charity on behalf of a firm when it will promote good will and advance their business objectives. The other rule is that it is permissible to give for urgent needs which these youngsters are particularly obligated in. The example of the Shulchan Aruch is if they have poor relatives in urgent straits. Of course the needs of poor individuals are the responsibility of the entire community, but close relatives have a higher degree of obligation. This corresponds to giving charity to the local community and for needs which the company is uniquely situated to help with.

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JWR contributor Rabbi Dr. Asher Meir, formerly of the Council of Economic Advisers in the Reagan administration, is Research Director of the Business Ethics Center of Jerusalem, Jerusalem College of Technology. To comment or pose a question, please click here.


Previously:

Loans to Family Members
How much worker supervision is too much?
Should I turn in a colleague for inappropriate acts?
Priority in charitable giving
Trolls and ogres
How many hours of work is too many?
Can I promote my product by having it unobtrusively written into a story?
He's not heavy he's my brother
All's fair in war?, II
All's fair in war?
Girth vs. worth
Is it proper to tax bequests?
Ethics of Being Overweight
Penalized for working swiftly
When is it a bluff?
'Rate and switch'
My paycheck is late!
Should schools cater to an elite?
All's fair in love?
Comfort and Competition
Do I need the caller's permission to put a call on the speakerphone?
Overtime for lost time
Is it unethical to play suppliers against each other to get the lowest bid possible?
Do family members have precedence in charity allotments?
What the world of business can teach us about our annual process of repentance and renewal
Are religious leaders subject to criticism?
Vindictive Vendor: How can I punish an abusive competitor?
Blogging Ethics: Is the blogger responsible for defamatory posts?







© 2005, The Jewish Ethicist is produced by the JCT Center for Business Ethics