We spend a lot of time thinking about the business side of the companies we own. Some have factories and inventory and manufacture products we use every day. Others provide services, or technologies that make our lives easier or our work more productive. All these businesses have the greatest asset a company could hope for—talented people. We know the companies we own are desirable. But I was recently reminded of another reason many of the companies we own are some of the best in the world. DBS, a Singaporean bank we own in some portfolios, announced that they are donating over $700 million to communities where they do business. I was struck by how hopeful and grateful the members of these communities were at hearing the news. DBS wasn’t just giving back, they were making an investment in their community, and people loved them for it.
I decided to do some homework on the other companies we own and I was pleasantly surprised with the results. Not only are the companies successful with their businesses, but many also have a positive impact on their community. Of the top ten companies for corporate contributions in America for 2021, we own seven (company name and charitable contributions shown).
Pfizer ….. $3.2 billion
Merck ….. $1.8 billion
Walmart ….. $1.4 billion
Google ….. $1.2 billion
Microsoft ….. $1.1 billion
Eli Lilly ….. $600 million
Cisco ….. $300 million
Collectively, they gave over $9.4 billion to their communities. Of course, companies need to watch costs and spend wisely on new projects. But there is also a need to help others. Individually, many of us are fortunate to have the resources to positively impact our communities. But it is also nice to see companies working to make a difference. I am continually impressed when I see these activities going on, especially given the global challenges they must deal with.
Total giving in 2021 by corporations was $21 billion, up 23% from the prior year. Company stock appreciation and an increase in corporate earnings positively impacted the results. When companies win, the communities around them also benefit. Pfizer has made considerable contributions, sending much needed vaccines to emerging markets. Walmart is actively giving food to food pantries. Microsoft donates technology to non-profits. These and other companies we own also give in many other ways, including supporting impoverished communities around the world and those affected by natural disasters. The commitment they have to helping people is admirable, and it adds to our view that they are leaders in their respective industries.
We think often about the economy, inflation and interest rates, how local and foreign policy will affect the future, and whether current issues like student loan repayments and forgiveness could have an impact. And beyond the macro issues, there are always a lot of important things happening with the businesses we own. But I am thrilled by the fact these companies also make investing in their communities a priority.
~ Steve Davenport, CFA