Corporate Giving – How Can We Give When There Is a Debt Crisis?

The national debt today for the United States is more than $14 trillion-a number we cannot begin to get our mind around to even imagine what it looks like.  As a business, you understand that a “debt” is an amount owed to a person or an organization for funds borrowed.  Today many individuals, families, small businesses, large corporations, and our nation are in a “debt crisis.”  Yet there are still those who continue to ask for funds, and there are those who are continuing to give.

Businesses have always been advised to invest with a margin of safety.  This means you are looking for opportunities which can provide high returns while also minimizing the risk of the investment.  Warren Buffett advises purchasing “Forever” stocks.  You buy now, hold them forever, and collect dividends for decades.  He certainly has been successful with this philosophy.

However, while corporate downsizing and restructuring have captured most of the news; many companies have quietly increased their philanthropic giving.  Ever since 1991, there has been a continuation of this upward trend.  Fortunately for many individuals and charities with a variety of needs, giving has become part of the corporate culture.  Corporations today support a wide range of causes-including education, health care, and community development.

The result:  companies that give to charities are more profitable.  Much of this growth comes from the free positive press and advertising that they receive that has improved their company’s image.  Research shows that retail companies, banks, and companies that produce popular, manufactured goods for every $1 they add to their charitable giving budget; they can expect sales to grow by an average of $6 for that initial $1 invested.

Maybe these are the “Forever” stocks that Buffett was talking about-investing in the world today, continuing to be supportive to a cause for the long haul,  collecting the dividends of helping those in need, making the world a safer and healthier place, setting a good example for the next generation, and knowing that your investment will last for decades.