Corporate pandering to the left

Star Parker

8/21/2006 12:00:00 AM - Star Parker

A report issued recently by the Capital Research Center in Washington punctures illusions that tend to associate big corporations with right-wing or conservative causes. The report depicts a reality that is exactly the opposite.

CRC researchers examined contributions made in 2004 by the foundations of the nation's top 100 corporations to nonprofit organizations. The result: corporate contributions to left-leaning groups totaled $59 million and to right-leaning organizations $4 million.

That's about 14.5 corporate dollars going to the left for each dollar going to the right.

For purposes of the research, right-leaning organizations were defined as those generally supporting lower taxes, less regulation, less spending on social programs, more on defense, tough criminal laws, traditional values and the right to bear arms. Left-leaning organizations are those on the opposite side of these issues.

At first blush, this is a highly counterintuitive picture. Why would corporations support organizations whose goals are to make it harder for them to conduct their business?

The report proposes a number of explanations. Among these are the fact that corporations seek competitive advantage, which means that they do not necessarily uniformly support lower taxes and less regulation. They also make decisions regarding "strategic" giving that they conclude nurtures a particular corporate image. And, they respond to pressure.

The report mentions well-known shakedown techniques, turned into an art form by the Rev. Jesse Jackson. Make public allegations about racism and then take large payments in the form of contributions to go away. A payoff is cheaper than an extended dispute about an accusation, even if it's bogus.

Consider the woes of Wal-Mart over recent years in its efforts to open stores in inner-city areas. Certainly it's not an accident that the company, over these recent years, has become a generous supporter, to the tune of hundreds of thousands of dollars, to the NAACP.

At this year's NAACP annual meeting, its president, Bruce Gordon, brought Target into the crosshairs of his organization. Apparently Target's transgression was not responding to a survey that the NAACP sends out annually to corporations.

Gordon announced at the meeting, "We have companies that haven't responded for two years. ... Some folks in our community like Target because you know they have good prices and a nice product line. They don't even care to respond to our survey. Stay out of their stores."

In what seems to me an all-too-rare moment of what I would call real corporate responsibility, a Target spokesman explained that they ignored the NAACP survey "because Target views diversity as being inclusive of all people from all different backgrounds, not just one group."

The Target spokesman went on to add that minorities make up 40 percent of Target employees and 23 percent of all officials and managers.

Now, of course, the NAACP is opposed to racial profiling. But apparently just when we're trying to find terrorists in airports, not when Target is responding to their surveys.

But, hey, Gordon has a job to do and was recently brought on to head up the NAACP because of a reputation of competence. I guess it's justified. Previously, he was a senior executive at Verizon, whose foundation just announced a $1.5 million gift to the NAACP.

Who knows if pressure will be stepped up on Target and, if so, whether it will be able to withstand it?

I wonder how many corporate CEOs, in private conversation over a cup of coffee, would say that they honestly believe in the causes that their corporate foundations are funding. And if they personally don't, can they really honestly say they are being responsible with their shareholders' dollars?

A representative of a corporate foundation told me that they wouldn't touch an organization that appeared to be religious. Try and find a corporate foundation that funds efforts to promote traditional values in inner-city families, to fight black abortion or to promote school choice.

Yet, tens of millions of corporate dollars flow to the NAACP, which you will find as a plaintiff on every lawsuit challenging school-voucher programs or promoting gay marriage.

The great economist Milton Friedman argued that corporations should get rid of their foundations and tend to what they really are responsible for and know something about _ delivering outstanding products at the lowest possible prices. If they want to support causes, let managers do it out of their operating budgets so it is clear how the funds tie to the profitability and efficiency of the company, he said.

I think Friedman was on to something. It's clear that much of what is called corporate responsibility today is really quite the opposite.