Date:    12/17/97  10:03 AM

Subject: file no.S7-26-97 / Barbara A. Grayson
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The ideas supporting the bills  -  full disclosure for H. R. 944 and democracy 
for H.R. 945  -  are widely advocated and often considered good in themselves, 
And while I do not wish to test these here, there are some difficulties with the
proposed legislation.
The democratic basis for H.R. 945 is clear but how much democracy results if a 
public company's stock is 50 to 60 percent owned by mutual funds and pension 
plans are particularly troublesome since the fund managers vote the shares not 
the beneficial interest holders.  In this case one set of representatives is 
substituted for another with no real decrease in the  gap between vote and 
decision.
In assessing the impact of the two bills ,  knowledge of the current 
distribution of charitable gifts would be helpful. The proposed legislation 
might result in widely recognized charities garnering an increasing share of 
corporate giving.  
What portion of public corporation giving is solicited by charitable 
organization?  Such a procedure does allow narrowly charities to vie for gifts 
bases on detailed proposals for the  use of funds.  H.R.945 may reduce the 
viability of this procedure with negative consequences for the diversity of 
charities and oversight by donors.
Are a significant portion of public corporation gifts now directed to religious,
ethnic, or race based charities?  Would H.R.945 result in a shift in that 
direction and toward a more sectarian outcome? In this regard it would be 
helpful to study the matching gift programs of public corporations to see how 
they currently handle gifts to such charitable organizations and modify the 
proposed legislation, if necessary.
It is not clear exactly what is meant by "'charitable contributions".  If a 
broad definition is to be used , it would include all gifts to charity not 
limited to those deductible under the United States (U.S.) Income tax.  Thus 
services provided charities through say loaned employees should be included as 
should any gifts to foreign charities by a domestic parent or a foreign 
subsidiary subsidiary corporation.  Foreign corporations whose shares are 
directly traded in the U.S. as well as those represented through American 
Depostory Receipts should also be covered.
If a necessary characteristic of a charitable  gift is not deductibility in the 
U.S. we still need to know what a "gift" to "charity" is.  Where foreign 
persons, property, or services are involved is foreign or U.S. law to be used to
decide the questions?  Where all persons and events are domestic is federal or 
state law to control?