An uncharitable take on Bank of America

From the St. Louis Federal Reserve

Word comes today that Bank of America is backing out of its support of the Celebrity Series – which will now have to find replacement donors for (or do without) $600,000 of its $7 million operating budget. In effect, Geoff Edgers of The Boston Globe reports, without replacement funds, this means the Celebrity Series will be unable to host a major international dance company next year.

The news, of course, is wrenching enough, but the essentially corporate attitude of Edgers (and, by extension, the Globe) is positively galling. We get prose like this from Edgers:

"It is a blow, and we have to tighten our belts," said Martha H. Jones , president and executive director of the Celebrity Series . . . “We talked to them all along about when we would be able to stand on our own two feet.”

[Robert E. Gallery , Massachusetts president for Bank of America] said it makes sense for the 68-year-old Celebrity Series to become more self-sufficient, and that he believes Jones is moving toward that goal . . .

So the Celebrity Series is apparently some kind of dysfunctional panhandler, unable to stand on its own two feet, to which the too-generous-for-its-own-good Bank of America has finally had to administer some tough love. Really, this reads like Mr. and Mrs. Bumble discussing orphans in Oliver Twist.

What’s funny is that while dwelling on the predicament of the Celebrity Series, Edgers omits entirely the financial context of Bank of America, which has grown so large that it’s bumping against the very limits of continued domestic growth, and will soon have to re-name itself Bank of the Earth. Bank of America’s profits last year brushed $16.5 billion (a level it came close to breaking at the end of last quarter, and will surely smash through by end of year); of this, it distributed about $130 million to charity (about 13% of which went to the arts). If you’re counting, that’s less than 1% of its profit (and for the arts, a little more than one tenth of one percent). The company has announced a “goal” of $200 million of charitable giving in 2006 – but with anticipated profits of over $20 billion, they’ll still be holding within that 1% limit.

Now, I suppose we shouldn’t expect Bank of America to part with more than 1% of its profit – or should we? Why is that option never even discussed? We know that corporate profits are growing faster than any other part of the American economy (see chart above), even as the corporate tax burden is falling – why shouldn’t we expect more from the corporate sector than steady-state giving, much less reduced giving? Isn't this just the age-old bigotry against the public and charitable sectors, dressed up in "soft neocon" corporate attitude?

Sigh. Just another example of why “arts reporting” seems to be an oxymoron in this town.