H.R. 945 is problematic and raises a host of troubling issues. The feasibility, costs, and benefits associated with allowing shareholders a vote in the designation of charitable recipients seem questionable at best. The legislation also clashes with the very concept of philanthropy in this country. For example, take a company that has prepared its list of charitable recipients for the year, as usual, but now must get shareholder approval under H.R. 945. In addition to the regular list, the corporation has prepared information on each recipient's programs that are funded by its contributions so that shareholders will be able to adequately judge the merits of each.
Questions immediately begin to arise.
If it is as a slate, shareholders may wonder how the slate was determined and why other groups were not included, or they may not feel knowledgeable enough about certain organizations to know if they should be designated or not. These questions could create logistical and paperwork nightmares for corporations. First, there is no guarantee that the objective of giving individual shareholders a greater say in the process will be achieved. Their views on charitable giving may not be indicative of the opinion of the majority of individual shareholders. Second, under the current language of H.R. 945, the shareholder designation process is not even binding upon the corporation.