Date:    11/21/97  2:05 PM

Subject: S7-26-97 / United Way

November 11, 1997
     
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,
     
We appreciate the opportunity to comment on the proposed legislation introduced 
by Congressman Paul Gillmor (H.R. 944 and H.R. 945) which is currently under 
review by the Securities and Exchange Commission.  Based on our longstanding 
experience as a leader in charitable fundraising and corporate giving, as well 
as in addressing human needs, we have a number of concerns about the impact of 
these legislative proposals on the nonprofit sector. 
     
The United Way/Crusade of Mercy (UW/CM) raises over $91 million annually which 
supports programs in 450 local health and human care agencies serving more than 
2.5 million people in the Chicago metropolitan area.  More than 3,000 volunteers
participate in our annual fundraising campaign which involves thousands of 
corporate, civic and government organizations in Chicago and the suburbs. 
Hundreds of additional volunteers participate in United Way's extensive citizen 
review process to assess community needs and determine how to distribute funds 
so that donors know their money is helping to meet the most pressing community 
issues and reaching the people most in need.
     
Locally, corporate contributions represent a significant portion of UW/CM's 
annual fundraising effort.  In 1996, the $27.9 million in corporate 
contributions received by UW/CM from more than 2,000 businesses accounted for 
over 30% of our total fundraising campaign.  These corporations are a vital and 
integral part of our local charitable sector, and it is important to ensure that
companies can, and will, continue to play a significant role in   philanthropic 
efforts in our community.  However, we believe that this legislation may well 
have just the opposite effect.
     
The disclosure provision of H.R. 944, while not appearing overly burdensome, has
the potential to result in a reduction in charitable giving, as it could 
represent additional costs to companies.  Additionally, the provision appears to
be unnecessary, given the fact that most corporations already actively seek 
public recognition for their charitable endeavors.   
     
     
     
     
The shareholder participation provision in H.R. 945 is of more serious concern. 
Its implementation could well prove to be a costly and administratively 
cumbersome burden to companies.  And, if costs grow prohibitively high, 
companies may well choose to greatly reduce, or even eliminate, their charitable
giving programs.  For example, corporations would be responsible to develop 
mechanisms for shareholder participation,  verify the nonprofit eligibility of 
shareholder designated organizations, and potentially process thousands of 
donations.  If companies were to divert staff and financial resources to these 
efforts, the costs they would incur could, in many cases, outweigh the value of 
the donations.  On the other hand, the public benefits in this proposal are far 
from clear.  Shareholders' interests are optimized when the board and management
make decisions that improve the company's bottom-line and take into account both
the short- and long-term interests of the company.   As most companies 
recognize, a charitable contributions program is an integral part of its 
business strategy which adds important value to their shareholders, employees, 
customers and communities.
     
In this era of government downsizing and devolution, both the charitable and 
private sectors are being asked to do more to provide essential services to 
people in need in our local communities.  If we are to collectively succeed in 
meeting these new challenges, the charitable sector will need more, not less 
support, from our corporate partners.  We therefore believe it is essential for 
government initiatives and policies to encourage, not discourage, charitable 
giving.  However, the financial and administrative burdens stemming from 
implementing the shareholder participation provisions of H.R. 945, will likely 
result in discouraging many companies from continuing their charitable giving 
programs. 
     
Thank you for the opportunity to comment, and for your consideration of our 
views on this important matter.  Clearly, this is a complex issue, which can 
result in unintended and far reaching consequences for the SEC, corporations and
the charitable sector.  In closing, we urge you to fully explore all aspects of 
the proposed legislation, and to provide further opportunities for both the 
charitable and corporate sectors to provide additional input prior to finalizing
your report to Congress. 
     
If you have questions, need further information, or if we can be of additional 
assistance to you please feel free to contact me at (312) 906-2200, or my 
director of Government Affairs, Steve Bishop, at (312) 580-2807.  Thank you.
     
     
Sincerely,
     
     
     
John L. Borling
President & CEO
United Way/Crusade of Mercy
Chicago, Illinois