November 12, 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: Thank you for requesting comment on proposed legislation HR944 and HR945. We believe that both these proposals, especially HR945, will have a negative impact and will ultimately result in increased burden to the government to support the neediest in our society. Hasbro, Inc., a worldwide leader in the design, manufacture and marketing of toys, games, puzzles and infant care products, is a public company whose shares are listed on the American Stock Exchange. The Hasbro Children's Foundation is an independent entity which is funded by an annual allocation of the Hasbro, Inc. Board of Directors. We are a national foundation, focusing on direct services to children in the areas of health, education and social services. We are staffed by experts in the field, holding advanced degrees (MBA, Ph.D., and MPH), and are led by a Board of Trustees consisting of nationally known experts in a variety of children's issues, such as child abuse prevention, poverty, homelessness, pediatric health care, education and others. The Hasbro Children's Foundation funds model programs that provide direct service to disadvantaged children, and works with those organizations to adapt and replicate successful solutions to new communities. Our concerns regarding HR945 are as follows: Shareholders do not have the experience, perspective and relevant information to effectively make contribution decisions. Our foundation receives over 4,000 requests each year, far more than we can fund. Our 20 professionals, staff and Trustees have dedicated their careers to understanding children's issues. Together, we can apply over 300 years of experience to ensure that the dollars we grant yield the greatest benefit to those in need. In reaching funding decisions, we do far more than simply read requests. We review each potential grantee for a wide range of criteria: eligibility as a 501(c)(3), quality of programming and the magnitude of need in the community, ability of the organization to articulate clear goals and realistic strategies to achieve them, identification of distinct measures of success or failure, presence of varied sources of support that will ensure the continuity of the program beyond our funding period, fiscal viability. To augment our own experience, we consult with experts around the world to determine best practices. Our staff and Board make site visits to meet the people responsible for the programs and we observe operations. This hands-on involvement, analysis and careful consideration by experts is what makes our grantmaking most effective, enabling us to use each dollar to make the greatest impact by reaching the most children and families in need. It is neither realistic nor reasonable to expect shareholders to conduct a comparably thorough and informed decision making process. Exempting local charities and educational institutions frustrates philanthropic strategies to develop and propagate "best practices" nationally. National foundations have a unique ability to find excellent solutions to common problems and help organizations adapt them for other communities. There is no Forbes or Business Week to identify best practices in the non-profit world. As recipients of requests, Foundations become the clearinghouse for such information. Limiting funding exemption to local charities looks to effectively abolish the tremendous benefit of sharing innovative and successful practices with multiple communities. In addition, many needy areas are reliant on national charities, such as the Red Cross or the Salvation Army. Importantly, the proposed legislation would work against funding where charity is most needed: for example, the rural poor of Appalachia have no "local" corporations to fund their urgently needed programs. Lastly, exemption of educational institutions seems arbitrary as crucial education for families in poverty (i.e., family literacy, parenting, violence prevention) takes place outside these institutions in community centers, legion halls, homes and churches. If philanthropy is discouraged from funding the neediest, then the need for support will increasingly fall to the government. Our concerns regarding HR944 are as follows: Reporting legislation will cause additional administrative expenses, thereby reducing the dollars available for charitable purposes. The additional resources needed for document production, mailings and other administration will certainly reduce the charitable funds distributed. Most foundations currently produce an informal report of this type and provide the information freely. Why not, in a field of committed community citizens, encourage foundations to report rather than legislate? HR944 and 945 are unnecessary infringements on corporate democracy. Shareholders in public corporations routinely put forward proposals for a vote. Any shareholder who desires disclosure of contributions or voting on contributions can bring the issue to the company's annual meeting. If a majority of shareholders desire it, the proposal will pass. This proposed legislation seeks to impose on all public companies and shareholders a process they are fully capable of adopting on their own -- but have not. Charitable giving is, thankfully, part of the "ordinary course of business" of U.S. publicly-held corporations. Just as it would be inappropriate to legislate that corporations specifically disclose their advertising or capital expenditures, much less permit shareholders, rather than boards of directors and management, to decide such expenditures, so too is it inappropriate to narrowly focus on charitable giving and give corporations the message that such expenditures are subject to special scrutiny. The result will almost certainly be to discourage charitable giving, again putting increased burden on government. Thank you again for your consideration of our response to your request for comment. If you have any questions or would like additional information, please phone me directly at 212-645-2400. Sincerely, Jane S. Englebardt Executive Director Hasbro Children's Foundation 32 West 23 Street New York, New York 10010 Phone: 212-645-2400 Fax: 212-645-6815 E-mail: hcf@compuserve.com cc: Alan G. Hassenfeld, Chairman and CEO, Hasbro, Inc. Ellen Block, Chairman, Hasbro Children's Foundation