Why The Most Profitable Companies Are Stingy

A few weeks ago, I chaperoned my son’s preschool field trip to the Maryland Science Center. As we entered the lobby, the kids were drawn to the artificial geyser, which shoots fountains of hot water into the air. But I focused on the donor plaques that festooned the lobby and the many signs pointing to the museum’s corporate benefactors: the Lockheed Martin gallery, the Legg Mason Pavilion. Even the information desk has a corporate sponsor.

Go to virtually any museum -- and many hospitals, universities, and civic centers -- these days, and you will find a prominent example of corporate philanthropy. If you were to judge it simply by the weight of public branding, you would think that the corporate community in the United States has stepped up to support charities in a significant way.

They haven’t. Over the past 30 years, corporate contributions to charities in the U.S., as measured by percentage of pretax profits, have fallen precipitously, from a high of 2.1 percent at its peak in 1986 to just around 0.8 percent in 2012.

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