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Private U.S. corporations donated approximately $6 billion to nonprofit organizations in 1994. Corporations may donate money both directly to charities and indirectly through a corporate-sponsored foundation. Tax and financial advantages, as well as differences in corporate image, arise due to policy differences in the treatment of certain gifts. This paper presents a new model of corporate giving, and examines the financial implications of both direct and corporate foundation donations. Important considerations are corporate and foundation tax rates, the occurrence of donations to non-U.S. (or other non-tax-deductible) charities, the sale of assets to fund corporate foundations, and the effects of contributions over time. Comparative statics from a two-period model provide theoretical motivations for making certain types of gifts in certain ways. The results show that tax deductibility, tax rates, amounts of gifts made …