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London (CNN Business)One after the other, Frances three richest familiesopened their checkbooksand pledged a combined $565 million to rebuild the fire-ravagedNotre Damecathedral in Paris.
The first mega donation, for 100 million ($113 million), was announced by luxury group Kering and the Pinault family. It was followed by 200 million ($226 million) from Bernard Arnault, the worlds third richest man, and his company, LVMH. That was matched hours later by the Bettencourt Meyers family, which controls LOreal.
The donations should go a long way torestoring Notre Dame. But theyve also sparked a debate about wealth, taxes and the particular brand of philanthropy practiced by Frances richest families.
Attention shifted quickly this week from the generosity of the pledges to whether the donors would claim generous tax benefits available in France.
Under French law, individuals can deduct 66% of a charitable gift on their taxes, while businesses can claim back 60%.
For every corporate gift of 100 million ($112 million), thats 60 million ($68 million) the state doesnt receive in tax, explained Anne-Claire Pache, a professor who specializes in philanthropy at Frances ESSEC Business School.
Critics argue the donations meant to repair Notre Dame would be better spent on social programs to help the poor in a country where rising inequality has contributed to the outbreak of recent street protests.
How to rebuild a Gothic masterpiece like Notre Dame, by people who have done it before
While Arnault and Pinault run a publicity campaign playing the donation race, we forget that the greatest part of these donations will be the responsibility of all the French people through tax cuts, Julia Cag, an economics professor at Sciences Po,saidon Twitter.
The Pinault family, which controls luxury brands including Gucci and Yves Saint Laurent, said Wednesday that it would not claim the tax deduction. Louis Vuitton and Christian Dior boss Arnault has suggested the same.
Pettiness and jealousy are outweighing the common good, Arnault said Thursday at a meeting of
shareholders. In other countries, the company would be congratulated, he added.
declined to comment on whether the Bettencourt Meyers family would seek a deduction.
Big donations to prestige projects in Europe have long been important to French luxury brands.
French heritage as they compete for market share, according to Oliver Chen, a retail and luxury analyst at Cowen, an investment bank.
Two buildings in Versailles that were personal favorites of Marie Antoinette reopened to the public last year following restorations that werefundedby LVMHs Maison Dior. The Pinault family is set tolaunchits personal collection of contemporary art in the landmark Bourse de Commerce building this fall.
Its a demonstration of doing well and doing good, Chen said. It makes sense for the business, too.
LVMHs Dior financed the renovation of the Queens House at Versailles, which reopened in 2018.
Still, the contributions to Notre Dame were unprecedented, according to Pache. She noted the scale and speed of the donations signaled a rare cultural emergency.
Adrian Palmer, a professor who studies marketing and reputation at the University of Readings Henley Business School, said the companies
will face pressure to explain how their donations will be used.
It needs a little bit more nuance, Palmer said. How is this money going to be used for the good of the country?
reflects an intense debate in France over rising wealth inequality and taxation.
The families behind LVMH, Kering and LOreal are worth an estimated $181 billion, according to theBloomberg Billionaires Index, and the pledges to Notre Dame amount to less than 1% of their fortunes.
French President Emmanuel Macron has been under siege for months from gilets jaunes oryellow vest proteststhat were sparked by anger about rising gas prices and taxes.
They have since grown into a wider challenge to Macrons authority.
A group of women participate in Frances yellow vest protests in January.
Since the protests began, the president has said he wouldraise the minimum wageand scrapped a tax hike on pensions, though hes resisted calls to reinstate a wealth tax. He was set to make a policy address on Monday before the fire at Notre Dame broke out.
Some in France want Macron to go much further.
One candidate in the countrys 2017 presidential contest, Jean-Luc Mlenchon, had proposed a100% tax on incomeabove 400,000 ($425,000). France already has some of the highest rates of income tax in the world.
Many wealthy individuals have taken their money elsewhere. In 2018, about 3,000 rich individuals left the country or began to live there for less than half the year, according to a study from research group New World Wealth.
For billionaire philanthropists, such an environment requires delicacy. Charitable donations could be read by the public as another show of opulence.
At the moment, all eyes are on the companies, who just spent big money, Palmer said.
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