Apple's financial performance is unrivaled among American companies, but it's very far from being a leader in corporate giving, as measured by the ratios of giving to pre-tax profits and stock buybacks.
Here is a letter that Steve Clifford and I sent to the CEO Tim Cook of Apple corporation, whose percentage of charitable giving relative to its taxable income is astoundingly low as compared to other corporations noted below. Apple should increase its charitable giving.
April 24, 2023
Tim Cook, CEO
One Apple Park Way
Cupertino, CA 95014
Dear Tim Cook,
We are writing you regarding Apple’s charitable giving.
Your predecessor reportedly believed that he could do more for the world by making great products than by donating to charitable causes. Apple’s charitable giving has increased substantially since you became CEO, indicating that you don’t share this opinion.
Apple does not report to shareholders (or anyone else) total charitable giving. However, from various press releases, we understand that under your leadership, Apple has:
- Initiated an Employee Matching Giving program that has raised over $880 million since 2011 for almost 44,000 organizations. As this is a 50/50 matching program, we assume Apple contributed $440 million.
- Supported (RED) in its fight against AIDS. We read that in 2010 Apple donated $50 million to (RED) and $50 million to Stanford University Hospitals for the same cause.
- Launched, in January 2021, a Racial Equity and Justice Initiative in the United States with the goal of “building a more just, more equitable world.” Apple made an initial commitment of $100 million, and seven months later, added an additional $30 million.
- Pledged, in November 2019, $2.5 billion to confront California’s housing crisis. By July 2021, $1 billion of this pledge had been deployed. While these funds seem to have been invested in housing funds, they might not properly count as charity. Nonetheless, they are an important and needed action.
Given the philanthropic path you have chosen, we share two observations:
First, it is impossible to accurately calculate how much Apple has donated to charity. One of us is a shareholder, and we both would like to see Apple report its charitable giving in its annual report. Since you presumably are proud of what Apple has accomplished in this endeavor, you should be proud to disclose it.
Second, we urge Apple to become a leader in charitable giving. Apple is viewed by many as the iconic American company with its products, innovation, and brand loyalty. In addition, its financial performance is unrivaled. However, despite its progress since 2011, Apple is very far from being a leader in corporate giving, as measured by the ratios of giving to pre-tax profits and stock buybacks.
The ten most charitable companies among the largest 75 U.S. public companies ranked by market value, donated an average of 1.3% of pre-tax income to charity. * We estimate that Apple’s charitable giving in recent years was less than 0.1% of pre-tax profits. For every $100 in pre-tax profits, Apple donated 10 cents.
We estimate also that Apple donated 10 cents for every $100 spent on stock buybacks. Between 2017 and 2022 Apple spent $427 billion on stock buybacks, again roughly 1,000 times what is donated to charity. (To emphasize the enormity of this amount, a person living 427 billion seconds would have been born in 11.417 B.C.E, centuries before the invention of agriculture.)
As you know, the tax laws allow a corporation to deduct up to 10% of its taxable income for charitable contributions. We request a discussion of these suggestions with you or with any high-level Apple representative.
Former CEO and Author of The CEO Pay Machine
P.O. Box 19312
Washington, DC 20036
CC: Apple’s Board of Directors
Readers can email their reactions to Apple at firstname.lastname@example.org or call 408-996-1010.
|Market Cap||Charitable Giving|
|Goldman Sachs Group||69||2.5%|
|Johnson & Johnson||9||1.3%|
|Bank of America||27||0.6%|