December 12, 1997
Mr. Jonathan G. Katz
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: File No. S7-26-97
Dear Mr. Katz:
Adolph Coors Company is pleased to offer its comments in connection with the Commission’s study of two bills introduced by Representative Paul Gillmor (H.R. 944 and H.R. 945). Both bills would amend the Securities and Exchange Act of 1934 ("the Act"), ostensibly to make corporate donors more responsive to shareholders.
We have looked closely at the applicability and workability of both H.R. 944 and H.R. 945 and have concluded each bill would impose costly administrative burdens, overwhelm shareholders with information, and still not provide a workable system to increase accountability on public companies. Moreover, both bills in our view would threaten charitable giving activities as we know them today. Therefore, we respectfully urge the Commission to report back to Congress its opposition to both proposals.
Coors is the third largest domestic brewing company with a long history of community involvement and charitable contributions. Giving back to the communities in which we are engaged is for us an integral part of our business. Since all of our charitable contributions are selected carefully to match real community needs with appropriate corporate resources, one could only conclude that our charitable giving program already is wholly designed and executed to promote the long-term interests of our company shareholders.
It annually approves a charitable contribution budget based on approximately 2% of our pre-tax profits from the previous year. This year we received over 20,000 requests and funded nearly 2,000 projects and programs. In addition the company matches 50 cents on the dollar for employees who contribute to the United Way campaign. In 1997, the United Way received approximately $440,000 from Coors and its employees. It is unclear to us how our corporate "match" donation program would be impacted under H.R. 945.
In addition, Coors has tied non-profit fundraising into several of its major consumer promotions. For example, a Coors promotion this year raised nearly $7 million from consumers for the St. Jude Children’s Hospital to fight catastrophic childhood diseases while another raised awareness and funding for the John Wayne Cancer Institute. In this
specialized area, we believe the Gillmor requirements would have a devastating impact on these marketing and sales strategies, and the very worthy charitable endeavors they fund.
Charitable giving has become even more important over the last few years as Congress and the Federal Government give the state and local governments more autonomy and responsibility in areas such as welfare. Even though devolution in its many forms will produce benefits in selected programs, by itself it will not address the root causes of many problems plaguing American society. The need for charitable giving and giving back to the community through private sector initiatives was recently reinforced by President Clinton, General Colin Powell, President George Bush and others at their Philadelphia kickoff emphasizing the need for volunteerism and charitable giving. We cannot imagine the task of calculating the economic costs from increased taxation at the local, state and federal levels stemming from the demise of charitable giving as a result of Representative Gillmor’s bills.
With all due respect to the Congressman and his desire for greater corporate accountability, we are confident the Internal Revenue Service, not to mention relevant agencies from the State of Colorado, already have enough controls in place to provide proper regulatory oversight as suggested in this area, and furthermore, to ensure that the legitimate interests of shareholders are sufficiently well represented.
For stockholders who are interested in knowing about Coors’ charitable giving, we do release annually a report describing our charitable involvement. It has been our experience, however, that the level of interest in this area among shareholders is in fact negligible. Nevertheless, to the extent that any shareholder finds it useful, we will continue to provide this information. This approach, alone -- which we know to be followed by many if not most other corporations -- in our view adequately addresses whatever concerns about contributions may arise from stockholders and other members of the public.
Finally, I would like to emphasize one unique area to Coors which the prospective legislation could have on community giving. One of the most active and valued aspects of our corporate philanthropy programs has been a sort of "rapid response" strategy to meeting the needs of the community suffering from natural disasters.
When serious flooding left residents in Fort Collins homeless, when wildfires swept through Yellowstone National Park or when a Denver police officer was killed in the line of duty, Coors was there to offer appropriate assistance. This assistance has taken many forms, from cash donations to deliveries of drinking water and other essential supplies.
Although both bills allow the SEC to exempt from the requirements gifts or personal property (e.g., items produced by the company), it does not appear the language is specific enough and may inhibit our ability to react to natural disasters and other tragedies.
Beyond the parochial concerns of our company or stockholders and the many worthy non-profit organizations with which we partner, we must emphasize that the greatest potential problem arising from these proposals is the very real prospect that they could perversely reduce the overall level of corporate giving across the United States. That, to us, suggests that the changes being advanced under these legislative measures would unfortunately end up creating many more serious problems than they purport to solve.
For these reasons, Coors respectfully requests that the Commission recommend to Congress these proposals are neither feasible nor beneficial. Thank you for your consideration of Coors’ views.
Patricia J. Smith
M E M O R A N D U M
December 10, 1997
SEC Comments on Charitable Giving
Attached for your review are "draft" comments to the Securities and Exchange Commission who have asked for comments on Representative Gillmor’s legislative package (H.R. 944 and 945) to make corporate charitable giving more responsive to stockholders.
The deadline for comments to the SEC is this coming Monday, December 15, 1997. Therefore I would appreciate it if you could provide me with any suggested changes (via fax or e-mail at brenda firstname.lastname@example.org) by COB Friday, December 12. I will finalize the document and e-mail on behalf of Tesa to the SEC directly.
Thank you in advance for your assistance.