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Amancio Ortega is a 10% less generous than it seems

Days ago Amancio Ortega has donated 20 million at CARITAS. This generous act has aroused lit comments for and against.

In antemano confess mi position are clearly in favor. Firstly because the character deserves all my admiration, because the figure is impressive, the largest donation received by CARITAS, and because its fate seems to me one of the most suitable in the middle of the current crisis.

Amancio Ortega, who already has the world's second personal fortune as published this week BUSINESSWEEK, has been for decades a discreet character, unknown to the public even during the years of culture of the pitch. This personal impression is as admirable as his unquestionable business success, without going into the rumors about his dark beginnings, which until proven we need not prejudge.

What interests us is their business model, which grow steadily since its inception in 1975 has led to the world's largest business group in "clothing retailer", over 110.000 people, 1.600 stores 85 the countries 6 continents and across their 8 trademarks and attack that target different markets: Zara, PULL & BEAR, Massimo Dutti, Bershka, Stradivarius, OYSHO, Zara Home and Uterque. All under the umbrella of the group management style INDITEX.Este, this business model, been studied for years at Harvard and has led to numerous management analysis.

As Fernando Diaz-Plaja explained in "The Spanish and the Seven Deadly Sins", the greatest of them all is the envy. So some will always take every thing to attack anyone who excel in business and in life. To criticize his actions even more generous. The most common is : "Sure, and tax deducted ... ", without analyzing in depth a donation 20 millones, after deduction of such taxes pose to divest the donor 17 million or so if the donation is personal, the 18 million if the agreement is for one of its subsidiaries. The explanation is that according to the Law 49/2002 of 23 December is the deduction 25% case of natural persons subject to income tax as the maximum contribution rate would be about. 50% el ahorro resultante es aprox 2,5 millones. In case of legal entities subject to corporation tax deduction is 35% if legal persons, and as the tax rate would be about 30% el ahorro resultante es aprox. 2 mithe savings is approximately this is not standard but a donation is implemillionhrough a partnership agreement for a year by the Amancio Ortega Foundation offers CARITAS 20 million for food aid,. pharmacy, housing services and school supplies to needy individuals and families in Spanish territory.

As I am not an expert in economics may leave me some detail on this reasoning, but what I mean is that despite the tax advantage Amancio Ortega's gesture is very generous and criticism from the tax cut is a fallacy to discredit donors. Another criticism that has been put forward is that being INDITEX reluctant to conventional advertising, use this donation for promotional and advertising. Even if this were, in fiscal terms would be a case of patronage, the same law as quoted above includes promotional spending, foundations and taxed as a corporation tax reduced 10% would consider a generous contribution of net 18 million.

In summary, Critics might argue that the basis is approximately Amancio Ortega 10% less generous than it seems, but other disqualifications for his gesture would have no basis.

So far tax differences of donations and patronage via personal or business, Let nature regarding CSR. Donations and sponsorship are philanthropic, not to be confused with the concept of Corporate Social Responsibility.

Well, this news item on the Collaboration Agreement Amancio Ortega Foundation with Caritas, has led me to take a look on INDITEX Annual Reports, and noted with satisfaction the substantial improvement with regard to CSR between memory 2011 in comparison with the previous 2010. From the front entrance expresses first that we have a triple bottom line sustainability memory , President's letter then spends about a third of its message to assess improvements in CSR group during the 2011. Declares Paul Island:

<< Precisely in the environmental field, 2011 was the first year of the new strategic plan 'Sustainable Inditex 2011-2015', that continues and deepens the objectives of previous plans. Its main hub is the program of eco-efficient stores, whose models are reaching the highest ratings by external agencies demanding certification. This ambitious program aims to implement fashion spaces that incorporate measures to ensure maximum energy efficiency both rationalization of consumption and material use environmentally certified smart water recycling or cardboard and waste collection. ... Our participation in international platforms such as the Ethical Trading Initiative, or deepening of our agreement with the International Textile Garment and Leather Workers' Federation (ITGLWF), and our commitment to Global Compact, are revealed as learning tools in the application of best practices, and knowledge to anticipate and resolve any issues. >>

Joined Inditex in December 2011 Pilot Program of Integrated Reporting, organization comprised of a diverse group of entities related to the field of accountability in order to create a common framework for integrated reporting. With transparency as a fundamental principle in relation to society, Inditex continues since it published its first sustainability report in 2002 guidance criteria of the Global Reporting Initiative G3. Besides the main indicators of the G3, have included specific sector supplement textile and footwear, has participated in the drafting of Inditex.

Inditex , like all the IBEX 35 are making substantial progress in CSR declared in his memoirs of triple accounting. The challenge is to extend it to other listed companies and generalize the necessary customization to each segment of the SME.

Will Inditex with its CSR effort to improve the image that some employees transferred in the video below?


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