Subject: In Reference to S7-26-97
 
Date:    11/13/97 9:36 AM
     
     
NATIONAL  NEIGHBORHOOD  COALITION
     
1875 CONNECTICUT AVENUE, NW, SUITE 710, WASHINGTON, DC 20009-5728 
(202) 986-2096    FAX #: (202) 986-2539    HN0283@handsnet.com
     
     
November 12, 1997
     
Jonathan G. Katz
U.S. Securities and Exchange Commission 
450 Fifth Street, N.W.
Washington, D.C.  20549         RE: File No. S7-26-97
                                                        H.R.944 & H.R.945
     
     
Dear Mr. Katz,
     
The NNC opposes H.R.945 which would permit shareholders to vote on the 
designation of entities to receive charitable donations from 
corporations.  While we question the intent underlying H.R. 944 which 
requires corporations to disclose the beneficiaries of charitable 
contributions each year, we see no problem with requiring such 
disclosures. . 
     
The NNC has been a voice for neighborhood organizations serving lower 
income distressed communities since the early 1980s.  In that time, we 
have been strong proponents of strengthening the neighborhood non-profit 
sector as a way to empower communities suffering from physical, economic 
and political disinvestment.  We are disturbed by the potential of these 
bills, taken together,  to introduce a new level of politicization to the 
already difficult process of getting worthy community empowerment 
initiatives funded in distressed neighborhoods.  
     
Stockholder Input In Charitable Giving
     
H.R. 944 would require corporations to disclose to shareholders the 
beneficiaries of charitable gifts.  Foundations are already required to 
disclose their charitable contributions and extending this same 
requirement to public corporations is reasonable. 
     
We are much more concerned about the provisions of H.R. 945 which permit 
shareholders to "participate [on the proportional basis to the shares 
owned]  through a proxy, consent or authorization in the designation of 
recipients of the issuers charitable contributions."  While the bill 
appears to be an attempt at democratically dispersing decisions about 
corporate giving to thousands of corporate investors, small shareholders 
would have little or no ability to influence these decisions.  And, by 
virtue of the sheer numbers of shareholders and charitable 
organizations,  the process for giving smaller stockholders proportional 
input in such designation process would be burdensome and unworkable. 
On the other hand, corporate entities which typically hold large blocks 
of funds would in fact wield  a great deal of influence in shaping 
charitable decisions.  
     
This provision would invite large corporate entities, which have veto 
power over each others charitable giving, to reach consensus as to which 
charities are appropriate donees and which are to be blacklisted.  This 
could result in an inappropriate consolidation of influence and an 
unhealthy lack of diversity among charitable beneficiaries.  
     
     
Under any scenario, H.R. 945  would be cumbersome and costly to 
implement.  There are 600,000 charities in the USA and a fair 
designation process would have to provide shareholders an opportunity to 
make an informed choice between them.  The costs of carrying out this 
type of process would far outweigh any ostensible benefit to 
shareholders. 
     
Because the process envisioned by H.R.945 would be impossible to govern, 
invite concentration of funding decisions in large corporate entities 
under the guise of accountability, and generally introduce an 
unacceptable level of political motivation into the charitable donations 
process, we oppose this bill. 
     
     
Sincerely, 
     
     
     
Deborah Austin
Acting Executive Director