William H. Birtcil
Vice President, Government Affairs
The Pillsbury Company
200 South 6th Street, M.S. 39K5
Minneapolis, MN   55402

December 15, 1997

Mr. Jonathan G. Katz
Secretary
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

RE: File No. S7-26-97

Dear Mr. Katz:

This submission is in response to the Commission's request for comments on matters related to charitable giving by public companies and the specific proposals outlined in H.R. 944 and H.R. 945.  The Pillsbury Company has serious reservations that this legislation would provide meaningful improvements to the ways in which public companies represent shareholder interests and respond to community needs in the areas of charitable giving.

H.R. 944 would require a public company to disclose to its shareholders the charities to which it made contributions during the past year, and the amount of each contribution.  In 1996, The Pillsbury Company's parent, Grand Metropolitan plc, had 102,869 shareholders. During that time, Pillsbury made over 750 charitable contributions.  Requiring Grand Metropolitan to notify all shareholders of Pillsbury's charitable giving would require significant additional expense to all shareholders, many of whom may prefer to avoid the unnecessary expense.  For example, with approximately 50 lines to a page,  it would require an additional 15 pages of paper to notify our 102,869 shareholders of our contributions (and the majority of our shareholders are U.K. citizens, not U.S. citizens).  The mailing costs alone (this means excluding the cost of the paper, the administrative burden in managing the information, and the printing costs) would be approximately $75,000.  It would be far less costly to require public companies to include a statement in the annual mailings that the information is available from the company for a nominal reproduction charge.

H.R. 945 would require public companies to conduct annual elections on what charities to support and the amount of each contribution.  It is assumed that the recommendations would come from the shareholders, and it is further assumed that most shareholders would recommend charities in their communities.   In addition to the administrative burden and costs discussed above, there would be the added burden of ensuring that each shareholder's recommendation would be for a legitimate charitable organization as defined in IRS regulations.  It is further assumed that the cost of investigating each recommendation would be borne by the public company.   Pillsbury estimates that the costs of meeting the requirements of H.R. 944 and H.R. 945 would exceed $250,000 per year

The Pillsbury Company hires professional staff to identify credible and effective charitable organizations, and to ensure that each dollar donated is used for its intended purpose.   The Pillsbury Company has a long and well-known reputation as one of America's leading public corporations in the area of charitable giving and volunteer programs.  Further, the company has won numerous awards for the extensive, and innovative, ways in which it has addressed the many pressing social and economic issues facing our nation.   Although we all should be concerned about the misuse of vital charitable dollars, these proposals would be difficult to administer, and could hurt the very programs they are designed to help.  We believe there are more cost effective ways to address problems with public company charitable giving than the proposals outlined in this legislation.

Respectfully submitted,

William H. Birtcil