The evaluation of corporate contributions' by Levy and Shatto (L-S) (1978) is the first article on corporate philanthropy to be published in Public Choice, although other theoretical papers related to the general topic have appeared. Since corporate philanthropy involves the use of private resources for activities which frequently result in collective benefits, it is an interesting topic for study. In their paper, L-S present empirical tests of three 'hypotheses explaining the aggregate level of corporate giving...' (p. 28). L-S do not derive hypotheses from existing theory but, instead, choose to test 'rationales expressed by businessmen for corporate philanthropy...' (p. 20). L-S present their results without reference to any existing empirical analysis on corporate philanthropy. A contrast of their work with existing research will qualify L-S's contributions to the corporate philanthropy literature. Several of these assertions will also be questioned in this response.
In their introduction, L-S assert that 'as individual philanthropy has increased over the years, so has corporate giving . . .' (p. 21). Since they give no citation for either of these observations or the data which follows, one must accept or reject them on face value. Later in the paper, when they mention individual philanthropy again, they do cite a study by Feldstein and Taylor (1976); however, that study deals with the price elasticity of individual contributions and offers no evidence as to the change in individual giving over time. Interestingly, the article which follows L-S in Public Choice provides evidence that for the period 1950-1970 'real charitable contributions per itemized tax return have remained unchanged despite increases (on average) in disposable income, marginal tax rates, and in educational attainment..." (Abrams and Schitz, 1978: 29).
To substantiate their claim that corporate giving has increased over time, L-S cite the change in the nominal dollar magnitude of corporate philanthropy from 1946 to the 'present' (which we assume to be 1972). No reason is given for selecting 1946, but it is an interesting starting point, since an earlier article (Johnson, 1966: 489) noted that 1946 was one of the few Public Choice 35 (1980) 129-136. A II rights reserved.