What began as a $6 million endeavor in 1996 is coming to a (partial) close. Atticus Capital is shuttering two of its three hedge funds and is returning $3 billion to shareholders. The move is strictly a personal one, according to CEO Timothy Barakett in a letter to investors. Atticus is slicing its flagship fund and a smaller one, but is keeping its European Fund, which has $1.2 billion under management.

Prevailing market conditions led Barakett to begin liquidating many of the Atticus Global portfolio's holdings, an effort he expects to be complete by the end of September. Investors can expect to receive around 95% of their money in early October, with the rest being disbursed after the fund's final audit later in the year.

Forbes columnists M. Todd Henderson and Anup Malani make a compelling case for corporate philanthropy:

There is a tax efficiency to corporate giving. Both Pfizer and its shareholders lower their taxable income when the company donates Diflucan to Africa. If Pfizer instead maximized its profits, paid corporate income tax and then let shareholders make charitable donations to treat AIDS-related diseases out of their dividend checks, the money available for charity would be reduced, given the current 35% corporate income tax.

That's certainly true. The tax code is, I would argue, one of the few compelling arguments for charitable giving on the part of public companies. Without the tax benefits, I would argue that companies should stick to their income-earning knitting, delivering strong returns to shareholders who can then use the money to support the causes important to them.

Until 2003, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) had an innovative giving program that I think was a model of good corporate governance: the company designated a chunk of earnings for philanthropy each year, and then allowed each shareholder to designate a charity for their prorated share.

I'm just concerned about companies donating money to causes that are objectionable to some of their shareholders. For instance, Wal-Mart (NYSE: WMT) is a leading supporter of the Salvation Army, which has a long track record of discriminatory treatment of the gay community.

The government should amend the tax code to make it more efficient for companies to give their shareholders a say in corporate philanthropy.

Wal-Mart Stores, Inc. (NYSE: WMT) has done a lot to improve its image in recent months, but this latest bit of news might not help. In 2007, the Bentonville, Arkansas company increased its charitable giving 8% to $296.2 million. The company's giving grew 10% in 2006 compared with 19% in 2005, a spike inspired by Hurricane Katrina.

I'm sure Wal-Mart critics -- whom I frequently agree with -- will criticize the slowing growth, but I disagree. The problem with corporate philanthropy is that it's the shareholders' money. It would be far better, I think, if companies did little in the way of charitable giving, and focused on providing shareholders with strong returns, letting them decide what to do with their money.

Too often, philanthropy by public companies focuses on the pet causes of executives. To Wal-Mart's credit, the USA Today reports that "Most donations were made locally by the more than 4,000 Wal-Mart and Sam's Club stores to charities they pick. Wal-Mart said U.S. donations went to organizations including the National Teacher of the Year program, hospital aid group Children's Miracle Network, The Salvation Army, United Way and food bank America's Second Harvest."

Google (NASDAQ: GOOG) has announced details of its philanthropic plan (Google.org) to combat climate change, poverty, and what the company called "emerging threats." In a press release, Google said that "Today's announcement includes more than $25 million in new grants and investments to initial partners. The resources come from a commitment by Google's founders to devote approximately 1 percent of the company's equity plus 1 percent of annual profits to philanthropy, as well as employee time."

While Google's founders should certainly be commended for their commitment to issues of social justice and making the world a better place, the donations do raise interesting questions about the purpose and goals of public companies.

Remember, Google's top executives are, in effect, using the capital of the company's shareholders to execute their own philanthropic aims. The "1% of equity and 1% of profits" doctrine certainly runs counter to Milton Friedman's assertion that the social responsibility of a corporation is to increase its profits.

As an investor, I'd rather see companies focus on generating profits, and then letting the shareholders -- the rightful owners of the company's income and equity -- decide what to do with it.

But as long as Google's stock is a strong performer, no one's likely to complain. Plus, you'll make very few friends arguing that corporate philanthropy at public companies is inappropriate.

Since launching Salesforce.com (NYSE: CRM) in the late 1990s, Marc Benioff has built a multi-billion dollar operation, which is still growing at a break-neck pace. Interestingly enough, Benioff thinks that a big key to success has been his company's philanthropic efforts – that has helped with employee morale, community involvement and even customer loyalty.

To this end, Benioff used the 1-1-1 model. When Salesforce.com was founded, 1% of the stock went into a foundation. After that, 1% of the profits were put into the foundation and employees have spent 1% of their time on philanthropic activities.

Last year, Benioff wrote a book on the topic, called The Business of Changing the World. He interviews a variety of companies, such as Cisco (NASDAQ: CSCO), UPS (NYSE: UPS), Dell (NASDAQ: DELL), Intel (NASDAQ: INTC) and Timberland.

So what can your business do?

While there are many idealistic people in this world, few actually do things to implement their opinions and ideas in a pragmatic way. John Montgomery, the founder and CEO of Bridgeway Funds is certainly not one of these people. From reading an excellent Barron's article (subscription required), I've learned more about compassion and philanthropy in an investing leader than I have from any other article this month. In addition to learning about compassion, I learned a very interesting remedy to emotional inefficiency that exists in nearly every investor.

Every year, Montgomery's company gives half of its profits to charity. While many companies do have "philanthropy" departments, very few give significant amounts of money compared to the company's profits. I've also found that many companies simply do this for tax advantages -- this is not the case with Bridgeway. Each of the company's 24 employees could select a charity to receive at least $20,000.

Montgomery also limits his compensation to seven-times that of his lowest employee. For those not familiar with the disgusting executive pay situation in this country, the average CEO makes 531 times the pay of his lowest employee. While many, including myself, just complain about this fact, Montgomery is actually doing something about it: "Executive compensation is way out of whack in this country, so we have our own system to reduce any possible animosity in the firm."

While Wal-Mart Stores Inc. (NYSE: WMT) is a high-profile target of critics of corporate greed, the Walton family has, without great media attention, done very little for charity. But with the death Helen Walton, the widow of founder Sam Walton, that could change. With her stake in the company making her a billionaire several times over, the Walton Family Foundation could become one of the three biggest charities in the country, if Ms. Walton's shares go to it.

It remains to be seen what will happen, but Wal-Mart's PR executives have to be praying that the Waltons will finally become a major force in philanthropy. They'll be able to say "Look, the money that we're making paying low wages with poor benefits ends up going to charity anyway."

But until that happens, the stinginess of the Waltons is bad PR for the Wal-Mart company, although it's something they obviously have no control over. But if the Walton Family Foundation grows rapidly from Helen Walton's estate, I would expect them to make some public relations hay out of it.

As Michael Fowlkes points out, economist Milton Friedman recently passed away and his accomplishments have been lionized. But I disagree with Friedman's views on corporate philanthropy.

Specifically I think Friedman was wrong to argue that corporations have only one purpose -- to maximize shareholder value. Friedman thought that chief executive officers who talked about giving back to their communities were merely displaying one of their ''suicidal impulses.'' The notion that businesses should aim to avoid pollution, say, or donate resources to a neighborhood was ''pure and unadulterated socialism,'' Friedman wrote in 1970. Corporations, Friedman argued, had but one purpose: to increase profits as much as was humanly possible. If you're feeling generous, give the money to shareholders.

In Value Leadership, I argued that corporations have a vital interest in giving to their communities. Companies that contribute to the communities in which they operate display a commitment to others that makes potential employees and customers feel better about the companies. In particular, I found three key activities that match corporate donors and recipients in a mutually beneficial way:

"Worry about being better; bigger will take care of itself. Think one customer at a time and take care of each one the best way you can." -Gary C. Comer

Gary C. Comer, the founder of Lands' End, died from cancer at the age of 78 this October 2006. Mr. Comer was a man of true greatness exhibiting unmatched generosity and compassion for children. Comer, in partnership with his wife Frances, spearheaded increased quality and availability of cutting-edge health-care for the children of Chicago. The Comers dedicated themselves to giving from the proceeds of their own success. Their level of care and concern is truly unmatched anywhere.

Some of the Comers' selfless contributions include:

• Comer children's hospital at the University of Chicago
• Comer Pediatric Emergency Department
• Comer Center for Children and Specialty Care
• Gary Comer Youth Center
• Comer Pediatric Mobile Care Program

The Comers' have also given various donations, exceeding $150 million, to further education. Most of their philanthropic efforts have been focused directly on the south side of Chicago.

Gary C. Comer built his Lands' End legacy upon a love for sailing. In 1963, Comer and five partners incorporated under the name, Lands' End Yacht Stores. By 1965 they had begun to show profit and printed their first catalog. In 1978, Comer moved the phone operations and warehouse to Dodgeville Wisconsin. In 1986 Lands' End went public. Comer stepped down as president in 1990 and in 2002, Sears Holding Corporation (NASDAQ:SHLD) purchased Lands' End.

Lands' End is currently the second largest apparel-only mail order business and the worlds largest retail clothing website.

Today's New York Times [subscription required] reports that Google Inc. (NASDAQ: GOOG) has launched a for-profit foundation headed by Dr. Larry Brilliant -- an MD who helped eradicate smallpox in India. Google.org represents another front in the competition with Microsoft -- one I think it will win because of its superior goals and unique structure. Whether that's good for Google shareholders is another matter.

I've written about corporate philanthropy in my book Value Leadership -- which describes seven principles that have helped companies to achieve superior financial and stock market performance. As I wrote, Giving to Your Community is one of those principles -- and there is some controversy about whether companies should get involved with philanthropy at all. Stanford economist Milton Friedman famously argued that companies should stick to making money and let their enriched stockholders give as they choose. For most of his career, Warren Buffett seemed to share that philosophy.

I identified three reasons why companies participate in philanthropy -- which I see as concentric rings moving from inside a company to the wider world: