A donation is a gift given by individuals or groups, typically for charitable purposes. It may take various forms, including cash offering, services, new or used goods including clothing, toys, food, and vehicles. Sometimes, there is news that the old man contributed all his property to charity. He says, “I just try to give something back to the community where I feel comfortable. I want to spend this money for those who are really sick and in need”. He will be applauded because he expresses his gratitude about his society by donating. Unlike the donation by individuals, that of corporate seems to inevitable in name of social responsibility. Nowadays, almost all people regard the corporation that is socially responsible as a lasting one. In response to public concerns, many business companies transfer part of their profits into social programs as well as individuals.
The donations are not just losses for businesses because they can take a tax deduction. A donation reduces corporation tax. They can deduct it within the limit of 5% of corporation income for three years. In case of a donation of individual, people take a deduction within the limit of 15% of income tax. Recently, The Ministry Of Strategy and Finance (MOSF) announced the 2013 amended tax bill. The key point of it is that the method of a tax privilege is changed from the inclusion in deductible expenses to the tax credit in case of an individual donation. This change does not apply to a corporate donation. At that time, it was sensational that this change can interfere with the development of a donation culture because a large giver does not take a deduction corresponding to the amount of donation. There are some concerning opinion that a government missed the importance of private donations.
According to the report of the Giving Korea, the symposium of donation culture, many Korean corporations keep donating but are concentrated in a social welfare service, a community development, and educational scholarships because the important reason of corporate donation is the will of its CEO to promote image improvement. As a result, the corporate donation about culture & arts has been not that much because it is hard to verity its results. Generally, proceeding culture art events is far from relieving low-income class. According to the 2013 amended tax bill. There are additional laws to increase donation about culture & arts. If a corporation invests in constructing library, museum, gallery, and auditorium, it is recognized as the creation of job and then qualifies the investment tax amount deduction. In addition, the limit amount of inclusion of entertainment expense in deductible expense unifies a 10% of limited amount.
Unlike the developed countries, the history of the donation culture is about 15 years. In America, the scale of contribution is the same as two percent of GDP. However, less than 1 percent of GDP is the same as the donations in Korea but the market of donation has a potential to be grown up at least twice than now. As a polarization accelerates, mistrust against corporations and big business is deepening as shown by the “Occupy Wall Street Movement.” It is true that many corporations are blinded by profits. However, as long as the tradition of giving back wealth to society is alive, the culture of respect for those who created their wealth justly will not be shaken. “Noblesse oblige” is the major bedrock of American capitalism.