GM and its impact on FIRST

[Beth Sweet]

Speaking strictly from a financial standpoint, a company (such as GM) typically would get tax benefits by supporting a qualifying charity (such as a 501c3 like FIRST) to a monetary extent (it's been a year since I took tax, I don't remember off the top of my head, I'll look it up if you really want me to). To that extent, GM was able to pay fewer US tax dollars by supporting FIRST's charitable actions. Sorta like, giving them the option of doing the general good things the government wants to do, or picking which good thing they want to do. Additionally, the losses that GM has been taking for the last few years will "earn" them money in the coming years. If my memory serves me correctly, a current NOL (loss) can be applied to income as far as 20 years back, and they will receive back taxes for profitable years. (If a company hasn't been profitable in that period, or the losses outweigh past gains, it also carries forward, but I won't get into that)

Now, all of that given as truth, the bankruptcy, because of the extent of government involvement, may make some of those typical financial benefits of charitable support null. Typically (and the likely reason that Fiat bought Chrysler), a bankruptcy does not invalidate the ability to use these losses and charitable deductions, but with the billions in government aid, the media has been making it sound like this won't be your typical Ch 11 (and since they're on the conference calls, I'll trust them).

So, the point of that whole thing is: it has been in GM's best financial interest to support charities such as FIRST in the past, depending on government restrictions on charitable contributions, it may or may not be in the future