AbbVie continues to pay it forward from its U.S. tax reform gains, this week donating $100 million to Ronald McDonald House Charities. The largest single donation in either organization’s history is just part of AbbVie’s bigger commitment to donate $350 million to charities this year using gains from the tax legislation that lowered its corporate rate.
AbbVie has so far distributed $200 million of the total, using the first two donations for disaster relief in Puerto Rico with $50 million each to Habitat for Humanity and Direct Relief.
The hefty donations, however, make up only a fraction of the tax boon for AbbVie investors. The company set up a $10 billion stock buyback plan in February, like other Big Pharmas that yielded big tax savings from last year's Republican tax plan.
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When AbbVie announced that its tax rate would drop earlier this year, CEO Rick Gonzalez said the company planned to use its gains to fund $350 million in charitable donations in “three areas that align with AbbVie’s philanthropic pillars of building strong communities, sustainable health care systems and education." The company said it'll also use its tax savings to fund investments around the world, including $2.5 billion in U.S. capital projects, increased compensation for nonexecutive employees and pension funding.
Melissa Walsh, VP of corporate responsibility and global philanthropy at AbbVie, oversees the new giving, having shepherded AbbVie’s philanthropic efforts for almost five years.
“When we were thinking about how to best deploy the $350 million, we wanted to make a commitment to make fewer larger grants to organizations to really ensure we were driving the most impact for the most people, as opposed to doing a lot of small grants,” she said in an interview.
The beneficiaries fall into one of three targeted categories—disaster relief, helping families with children who have serious illnesses, and community building. With $150 million still to give, Walsh said there will be several more donation announcements in the family support and community categories.
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The $350 million was earmarked by AbbVie as a one-time gift, but Walsh said that, as the company makes its philanthropy plans for 2019, the new partnerships begun this year will continue to be developed. “[W]hat that will look like will develop over time,” she said.
AbbVie is not the only pharma company that promised to use some of its tax gains for charitable giving—Pfizer pledged $200 million to its Pfizer Foundation and Merck & Co. donated an undisclosed sum to its own foundation—but none has announced single large payouts to outside beneficiaries as AbbVie has done. But the spotlight is not what AbbVie is looking for, Walsh said.
“The work that we support philanthropically is about very truly, and in a very focused way, giving back to the underserved. What’s not important to us is having our logo all over things,” she said. “We are very focused on the work getting done and know that the work the partners on the ground are getting done will speak for itself.”