AbbVie’s year of donating $350 million from its 2018 tax break gains is ending close to home. The pharma pledged $40 million Thursday to rebuild a North Chicago middle school near its headquarters.
The Neal Math & Science Academy will get a complete revamp. The existing facility, which has fallen into disrepair, will be expanded and completely rebuilt into a “21st-century learning space,” AbbVie said. Plans are being drawn now with construction set to begin in the summer of 2020 and finished in time for its first class of students in the fall of 2021. The name of the school won’t be changed.
The $350 million donation push was announced last year after U.S. tax reform slashed AbbVie’s tax rate to 9%, the biggest break in the pharma industry. The company laid out $100 million to Ronald McDonald House Charities, which offers lodging for families with hospitalized children, and another $100 million for disaster relief in Puerto Rico, split equally between Habitat for Humanity and Direct Relief.
The Neal school donation is its final award of the one-time $350 million pledge, but like AbbVie’s other donations, it’s not really an ending, said Melissa Walsh, VP of corporate responsibility and global philanthropy at AbbVie. AbbVie will continue to support the grantees it has awarded over the past year as well as other ongoing charitable partner commitments.
“The announcement of $350 million was really the easy part,” Walsh said. “We’re now dedicated to making sure that we are continuing to stay close to the partners to make sure that they’re hitting the milestones that they need to be and that they’ve committed to meeting for the families and the students receiving benefits.”
The charitable donations make up a small 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. It also used $2.5 billion to fund U.S. capital projects, increase compensation for nonexecutives and fund pensions.
AbbVie’s name won’t feature prominently in the school, but that was never the intention anyway. The company has established an ongoing relationship with the school district since it opened its doors in North Chicago in 2013. Employees have pitched in to renovate every public school library in the city with resource centers, new career pathways facilities and more, Walsh said.
“Getting naming rights to a building is not something that excites us. The programming and the work this building will ignite for the students is what has driven us to make this commitment,” she said. “I think if we have a plaque in a hallway that might be just fine, but we’re not anticipating or looking for naming rights of a room or a hallway, to say the least.”