They give to leave a legacy. The charitable institutions are well aware they offer an opportunity to give something back to the community. What is exchanged is a feeling, says David Gillig, senior vice president and executive director of the Children s Hospital Foundation. People make a gift in exchange for a feeling. But companies often want more.
Charity is business, especially for public companies beholden to profit-hungry shareholders.
More and more companies include charity events as part of their marketing budgets, fund-raisers say. It is an important distinction. The Internal Revenue Service limits the promotional benefits a company can receive if a payout is listed as a charitable deduction. If the company is clearly gaining marketing and promotional advantage, then it is to be considered simply a marketing expense and taxed accordingly. Rather than quibble, companies simply consider the expenses of sponsoring dinners and events as marketing costs and regard it full return for the investment.