Dear Mr. Harris: Thank you for your letter of September fifteenth, which I read with great interest. I say this because the question you raise--that of corporate contributions to non-profit enterprises outside the necessarily limited scope of "local charities"--had become a matter of considerable national importance.1
You state that "if the Administration had a philosophy on this question it would greatly help the stockholders, Officers, and Directors of many thousands of corporations to make up their own minds on what course they should pursue."
This matter has not been discussed sufficiently on an official level to establish what could be termed an Administration philosophy. However, speaking personally, I do have certain convictions, which were apparently shared by the Congress in its enactment of the pertinent legislation.2 Moreover, these views have seemingly been supported by specific tax legislation in many states. Just recently, a New Jersey Court upheld, in the widest terms, the validity of what might be considered an important test case of such a State statute.3
Simply and briefly, my belief is as follows:
America is unique among all nations of the world in the variety, scope, and size of its non-Governmental support of worthwhile non-profit enterprises.
When personal inheritance and income tax rates rose to a point where reliance could no longer be placed on private individual contributions to finance the increased requirements of such activities, a choice among courses of action seemed necessary. Either many of these enterprises would have to die, which was unthinkable to our American mind; or, impersonal State and Federal giving would have to take up the burden, which is a concept I have never favored, as you know; or, some other source of private funds would have to be found.
Obviously, it was for this last purpose that Congress granted corporations the 5% tax-exempt deduction from income, and I am unaware of any language in the law which explicitly or implicitly restricts such contributions to "local" activities or enterprises. The nationally endorsed campaigns such as the Red Cross, the U.S.O., the Crusade for Freedom, and many others, plus such important and worthwhile causes as the advancement of medicine, education, etc., can and should properly be considered eligible for such assistance.4
As you doubtless know, the national statistics show that corporate giving is around one-fifth of what it might be.
In these extraordinary days, when this country's world leadership is not only challenged by its enemies but sometimes questioned by its friends, one of the great issues at stake is whether or not we can prove to the world at large that the private conscience and will of this country can provide greater welfare than the regimented norms and percentages of more statist-minded governments.
Countless private American citizens are doing their utmost. By joining in the effort, it seems to me that American corporations will properly and legally be assisting in the propagation of our American faith. Sincerely
