Date:    11/18/97  12:14 PM

Subject: File No. S7-26-97 / Professor Jill E. Fisch

I am responding to your request for comments on the proposed 
legislation on corporate charitable giving.  You should be aware that 
New York Law School held a symposium on this topic last fall.  The 
papers and panel discussion from that program, at which I moderated a
panel, will be published shortly in volume 41 of the N.Y. Law School Law 
Review.  The faculty organizer of the program also published a piece 
proposing disclosure of corporate charitable giving.  See  Faith 
Stevelman Kahn, Pandora's Box: Managerial Discretion and the Problem
of Corporate Philanthropy, 44  UCLA L. Rev. 579  (1997).
     
Although increased disclosure would allow the market to evaluate 
corporate philanthropy more effectively, there are some major problems 
with the implementation of the proposed legislation.  In particular, many 
corporations engage in nominal philanthropy that has an underlying 
business objective, such as the advertising and goodwill provided by 
being an Olympic sponsor.  Moreover, corporate spending may have 
components of both business expense and charitable donation,
rendering the disclosure of the amount of the donation somewhat 
complicated.   I discuss some of these issues in my forthcoming article in 
the NY Law School symposium.
     
In addition, because one of the major concerns associated with
corporate philanthropy is the potential for management self-dealing, any 
proposed disclosure would be made more effective if it included a 
requirement that management disclose any personal relationships with
the beneficiaries of the charitable giving as well as any personal benefits 
received.  This might include directorships as well as freebies such as
US Open tickets and so forth.  Absent such disclosure, shareholders will
be limited in their ability effectively to monitor corporate giving policies.
     
Finally, although direct shareholder designation of charitable 
beneficiaries is an appealingly democratic process (and has operated 
effectively at Berkshire Hathaway), the proposal ignores the considerable 
business benefit a corporation can obtain through effectively managing 
its philanthropic policies.  It seems counterproductive to tell 
corporations that they cannot enhance their profitability through charity 
but must draw a line and treat charitable decisions as extraneous to 
business operations.  In light of the SEC's professed desire to retain 
management's traditional prerogative over business operations in other 
areas (such as shareholder proposals), support of legislation that would 
remove charitable giving decisions from management appears inconsistent.
     
I hope these comments are helpful.
     
Respectfully submitted,
     
Professor Jill E. Fisch
Fordham Law School
140 West 62nd St.
New York, NY  10023
(212) 636-6865
Fax (212) 636-6899