Not that this was said in this particular case so directly. This is just a general thought.
How is funding so tight that cutting the 1% of money going to these people is going to make all the difference? It's not even a total 1% gain, there will be some lost productivity making it somewhat difficult to measure.
If you truly tried everything, couldn't the CEO or other executives take a tiny cut? Not that I expect them to, I'm just saying if they truly did everything within their power to prevent it, like is often said.
I mean, sometimes I give a significant amount of my salary, like 10% as donations / tips / handouts and expect nothing back. These aren't even people I did something bad to, like forgot to pick up when I said I would, or felt guilty for spilling food on their carpet.
Surely in situation where I messed up and caused a problem for someone, I would do whatever it takes to make it right. I wouldn't just say "Well, that's what you get in this system of inviting friends over. I'm not technically required to do anything. I guess there's nothing I can do (including picking up the mess I caused or paying to have it cleaned)"
I've seen similar large donations from people who truly struggle to pay for rent and food even be similarly generous. Sometimes people will live on limited food or delay getting an apartment if it means helping out an acquaintance.
If you make millions of dollars, you don't need to worry about these basics. You'd think it'd be easier to take a personal hit which probably will have actually 0 impact on your life (literally no change-- keep on golfing, vacations, etc), rather than supposedly living with the guilt, as is frequently said, of people struggling to survive because you wanted to save 1% of your company's money for a few months (before realizing you need to hire and retrain people from scratch.)