More Coercive 'Charity'

One issue that pops up every so often (and has popped up now with the Tsunami disaster) is businesses giving charity.

This tends to be approved of by the general public, although the general consensus is that businesses have ulterior motives for giving such charity. I believe that businesses have no business giving unless they have the ulterior motive of believing that the advertising value of the charity will give them more money than they are giving away*.

Why?

For basically the same reason that I am against the government giving 'charity'...it's not their money!

It is the investors' money and should not be used in a so-called 'charitable' way without the permission of the people whose money it actually is. It's easy for boards to vote away the money that isn't theirs...but there is nothing virtuous about stealing money from others to make yourself look good.

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My father, though, had an interesting idea. Let's assume that the people on a given company's board are people who want to give money to a particular cause (in this case, tsunami victims) yet are moral enough to recognize that the money is not theirs. What can they do?

Let's say the board wants to give $5 million and their company has 50 million outstanding shares. What they can do is offer a special dividend of 10 cents per share. Each investor then can choose individually whether or not to donate the money.

Stockholders for whom every penny counts can save or reinvest the money. Stockholders who believe that the tsunami victims are getting enough money, but the fight against cancer or AIDS is getting shortchanged can donate their money elsewhere. And stockholders who agree with the board that money needs to go to tsunami victims will be able to choose to give charity.

*with only a minor exception: if a business is completely privately owned and all owners agree that they wish to give charity, then they are agreeing as individuals and giving their own private money