Studies in Philanthropy #31 Patterns of Corporate Philanthropy A Mandate for Reform Christopher Yablonski Preface by Mona Charen [insert Capitol dome logo C A P I T A L here] R E S E A R C H C E N T E R i About the Author CHRISTOPHER YABLONSKI is a Research Associate at Capital Research Center and administrator of CRC’s database of nonprofit organizations, tracking their activities, funding, and leadership. He also edited CRC’s Mandate for Charity: Policy Proposals for the Bush Administration. Yablonski earned a B.A. in Public Policy and Religion from the College of William & Mary. He has worked for former U.S. Representative Frank Riggs, and in the Political Section of the U.S. Embassy in Moscow, Russia. His writings have been published in Alternatives in Philanthropy, Cato Policy Analysis, Foundation Watch, Philanthropy, Culture & Society, and The Washington Times. *** ACKNOWLEDGMENTS. The author would like to thank all past and present CRC staff, including John Carlisle, Noelle Connors, Hitesh Dev, Megan Dively, Amanda Finger, Emily Grant, Neil Hrab, Meredith Messing, Gregory Miller, Christopher Morris, Matthew Roche, Ivan Osorio, Joseph Ura, and Nicholos Venditti. The research of Eric Blowers, James Davidson, Ian DeZalia, Anthony Frascarelli, and Aaron Huber was essential in compiling this study. Special thanks go to Morgen Bergman, Mona Charen, Patrick Reilly, and Loren Smith, Jr. 2001 by Capital Research Center ISBN: 1-892934-07-8 Preface It's always amusing to hear left-wing critics assail the alleged right- wing bias of the media. Ordinary mortals know that this doesn't pass the laugh test. But some listeners to National Public Radio believe it. Anyway, since they can never point to actual evidence from the coverage itself, they point for proof to the "corporate" ownership of CNN, NBC and the rest. Their unstated premise is that if corporations are involved, we must be in the presence of right-wing influence. Would that it were so. One hates to burst anyone's bubble, but most corporations are anything but conservative. The Capital Research Center has been following patterns of corporate philanthropy for 14 years, and has found that most companies and foundations give 4 times as much money to left-wing groups and causes than to right- wing ones - often to the disadvantage of the companies themselves. In 1997, the latest year for which data are available, corporations gave 4 times as much to left-leaning charities and public-policy advocates than to right-leaning ones. Corporations like Aetna, Merrill Lynch, Georgia Pacific and Target Stores - along with many others - donated $31.7 million to left-of-center groups advocating bigger government, more regulation and higher taxes, vs. only $8.1 million to groups advocating free market solutions, lower taxes and conservative reform. In the aggregate, this works against the interests of the corporations themselves, that presumably prefer, if only for business reasons, lower taxes and less regulation. But in some cases, corporate giving is even more directly at odds with the interests of the corporations. Leading automotive and oil companies, for example, heavily bankroll environmental groups that seek to impose greater regulation on their very industries. President Clinton's National Science and Technology Council, for example, released a report in 2000 on global warming that was heavily influenced by the World Wildlife Fund, the World Resources Institute and the Progressive Policy Institute's Center for Environmental Economics—all left-of- iii center groups advocating more regulation and higher taxes. The Clinton administration was certainly within its rights to issue such a report. But guess who sponsors the environmental groups who took such a large role? BP Amoco, DaimlerChrysler, Ford and General Motors. Among the 10 largest recipients of corporate public affairs grants, nine are either liberal or leftist. These include the Brookings Institution, The Nature Conservancy, and the National Urban League. The one more conservative beneficiary is the U.S. Chamber of Commerce, which is only center-right. The American Enterprise Institute (which leans right, but does host several center-left scholars) ranked 11th in terms of grants received. Nearly all of the major corporate donors in America shy away from contributing to faith-based charities. There is no constitutional impediment to their making such grants. Nevertheless, GM gave only 2.3 percent of its gifts in 1997 to faith-based charities. The numbers were similar for other major donors like IBM, Citigroup (whose official explanation denies funds to religious groups "unless they are engaged in a significant project benefiting the whole community") and GE. Perhaps President Bush's emphasis on including faith-based organizations among those competing for government grants will alter this pattern. Corporations are also highly vulnerable to intimidation and shakedowns. Jesse Jackson has perfected the art. Through his 501(c)(3), the Citizenship Education Fund, he has pressured major Wall Street firms to pony up contributions to himself and his friends on pain of lawsuits, boycotts and other forms of protest. AT&T, for example, contributed $425,000 to CEF after Mr. Jackson agreed to withdraw his opposition to a merger with TCI. AT&T also hired two companies associated with Mr. Jackson to manage billions of dollars in bond offerings. Mr. Jackson pulled the same stunt when SBC and Ameritech proposed to merge. When Mr. Jackson withdrew his opposition, he pocketed $500,000 from each company. The Capital Research Center found these corporate givers to be very secretive about their philanthropy. CRC had to resort to publicly available IRS data for most of its information. But shareholders are not so handicapped. They can and should demand to know how boards of directors are fulfilling their duties. Is it possible that they, too, have bought the propaganda that corporations are right wing? Mona Charen Adapted from the Ms. Charen’s column “Corporate Purr-meter,” The Washington Times, June 20, 2001. Reprinted by permission of Mona Charen and Creators Syndicate, Inc. © 2001 Creators Syndicate, Inc. v Contents Preface iii Section One Summary Essay: A Mandate for Reform 1 Findings 3 The Art of the Shakedown 6 Corporate-Backed Environmentalism 9 Faith-Based Charity: Corporate Philanthropy’s Blind Spot 10 Reforming Corporate Philanthropy 12 What Are They Hiding? 13 Methodology 13 Section Two Corporations Company Profiles 19 Companies Not Listing Grants 95 Section Three Nonprofit Public Affairs Organizations 115 Section One Summary Essay A Mandate for Reform Corporate support for big-government liberal advocacy groups is at an all-time high. This continuing trend underscores the debate over the role of charity sparked earlier this year by the Bush Administration. Lost in the controversy over taxpayer funding of faith-based institutions is a host of other issues, in particular the role that corporate philanthropy should play in expanding private-sector giving. Businesses are an integral component of charitable giving. Many companies fund charities, and the profits they generate ultimately fuel grantmaking foundations. Yet Patterns of Corporate Philanthropy: A Mandate for Reform finds that many major corporations fund nonprofit political advocacy groups that work against the interests of free markets. Many support groups whose missions are inimical to the very system that allows businesses to thrive. For fourteen years, Patterns has tracked philanthropic giving by the largest publicly held corporations in America. The survey focuses on a particular type of corporate giving: grants to political advocacy organizations. These include think tanks, environmental organizations, minority groups, and other organizations that seek to affect public policy. Patterns examines corporate giving by the 250 largest publicly held companies (as ranked by Forbes magazine according to sales) to hundreds of public affairs organizations. Based on a 1-to-8, Left-to-Right rating scale, we rank companies according to the size of their grants and the ideology of recipient organizations. Table I shows the "Ten Best" and "Ten Worst" corporate givers for 1997. We rate CIGNA the best giver and PNC Bank the worst. The year 1997 is the most recent for which we have comprehensive corporate giving data. Slow corporate reporting and lack of cooperation contributed to this delay. Fortunately, SECTION ONE Table I Best and Worst Corporate Givers to Nonprofit Public Affairs (includes only corporations that gave $250,000 or more to nonprofit public affairs) Ten Best Corporate Givers 1997 1996 No. Company Rating Grade No. Company Rating Grade 1. Cigna 5.65 B 1. Cigna 5.72 B 2. Chrysler (now owned 4.99 C 2. Dow Chemical 5.51 B by DaimlerChrysler) 3. American International 4.90 C 3. McDonnell Douglas 5.23 C Group (now owned by Boeing) 4. Weyerhaeuser 4.77 C 4. Eli Lilly 5.13 C 5. Archer Daniels 4.69 C 5. Wal-Mart Stores 5.01 C Midland 6. Exxon (now Exxon 4.64 C 6. Nabisco Group 4.87 C Mobil) Holdings 7. Texaco 4.59 C 7. Emerson Electric 4.78 C 8. Bristol-Myers Squibb 4.56 C 8. General Motors 4.75 C 9. Pharmacia Corporation 4.52 C 9. Bristol-Myers Squibb 4.61 C 10 Procter & Gamble 4.46 D 10. Exxon (now Exxon 4.53 C . Mobil) Ten Worst Corporate Misgivers 1997 1996 No. Company Rating Grade No. Company Rating Grade 1. PNC Bank 2.59 F 1. Freddie Mac 2.31 F 2. Sara Lee 2.76 F 2. Sara Lee 2.48 F 3. May Department 2.82 F 3. PNC Bank 2.60 F Stores 4. Target Stores 2.83 F 4. J.P. Morgan & 2.77 F Company (now owned by Chase Manhattan) 5. Freddie Mac 2.85 F 5. Travelers (now owned 2.78 F by Citigroup) 6. Schering-Plough (tie) 3.00 D 6.