Many Americans may assume that when corporations make charitable contributions, they give to nonprofit groups that are friendly to American ideals, including the family and the concept of limited government. That assumption is dead wrong. The reality is that most large, publicly traded corporations set up and fund their own grantmaking foundations that in turn make contributions to public advocacy groups that tend to be left-of-center politically, promote big government, and generally are hostile to traditional American mores.

By definition, most charities and nonprofit organizations are religious and volunteer-based. But corporate foundations tend to ignore community and faith-based organizations. According to its Patterns of Corporate Philanthropy, the Capital Research Center found that six of the ten largest U.S. companies explicitly ban or restrict grant making to religious institutions. For instance, AT&T says it will only fund groups that are "nonsectarian and nondenominational." Ford Motor Company explicitly states it does not support "religious or sectarian programs for religious purposes." Citigroup will only fund religious organizations when they are engaged in activities to "benefit the entire community." Even when companies have no policy restrictions, most give very little to community- or faith-based organizations.

One company foundation -- the Ford Motor Company Fund -- presents a representative example of corporate misgiving. Last year, the Ford Fund gave $111.2 million in cash and product grants, but the foundation's 1998 data lists just $1.2 million in funding to faith-based organizations -- and that was only for community-based initiatives. Ford bans giving to churches and religious organizations, but that policy does not prevent the fund from contributing to feminist and gay rights groups. In 1999, for example, Ford contributed:

The list goes on and on. The few grants listed here add up to almost $3 million -- almost triple the $1.2 million in total Ford giving to community organizations the previous year.

Another example of one-sided corporate philanthropy is the Target Foundation (formerly the Dayton Hudson Foundation), which received a giving grade of F in Patterns of Corporate Philanthropy. Portraying its foundation as a family friendly, "community oriented" grantmaker, Target listed more than $42 million in gifts for 1997. But Target explicitly bans grants to "religious organizations for religious purposes. Programs with religious affiliation are eligible if the program does not advocate religious beliefs or practices." Like with the Ford Fund, the policy does not prevent the company from funding advocacy groups with a radical sexual agenda. In 1999, Target gave:

AT&T, the nation's ninth largest company, may appear to be a responsible corporate giver; its "AT&T Cares" program makes grants--$73.1 million in 2000 alone through its New York-based corporate foundation--to the favorite charities of employees. But foundation's guidelines insist that "organizations must be nonsectarian and nondenominational," limiting employee choice. Consequently, the AT&T Foundation ended up funding a number of advocacy groups that could hardly be considered family friendly in 1997:

Not all shareholder-owned corporations are so hostile to the American family. Most of Wal-Mart Stores' charitable giving benefits real families. The retailer reported product and cash donations of $150.4 million -- the largest amount of any U.S. corporate foundation -- in 2000. Unlike other corporations, a politically correct spin machine operating out of corporate headquarters does not control Wal-Mart's giving. Instead, the managers at the nearly thirty-five hundred local Wal-Mart stores make 97 percent of all giving decisions. The result: Individual stores focus their charity on helping out local community organizations. They also support nationally known charities like the YMCA and the Children's United Way. Wal-Mart Foundation director Betsy Reithmeyer told Capital Research Center's Foundation Watch newsletter: "We try to serve community needs. Oftentimes it has been the faith-based organizations that have stepped up to meet that need."

As much as large corporations seek a "clean" public image and are perceived by most Americans to be conservative, why do corporate managers decide to contribute to advocacy groups that push questionable--if not radical--public policy initiatives? While the answer is complicated, often the immediate motive is to quiet criticism from shakedown artists like Jesse Jackson. In 1997, Jackson's Rainbow Push Coalition netted $2 million from Viacom and other communications companies when it alleged racial discrimination and threatened to petition the Federal Communications Commission to block telecommunications mergers and deny broadcast licenses. The Rainforest Action Network uses similar bully tactics. In 1999, the network threatened to boycott Home Depot unless it discontinued use of "old growth timber." Typically, groups that intimidate companies demand a "memorandum of understanding" that binds the company to a "code of conduct" that is often contrary to its own interest.

Other corporations contribute to advocacy groups because it is an effective way to weaken their competition. Large corporations can afford to comply with stringent government regulations, while smaller family-run companies cannot. Corporations also give to advocacy groups for some pragmatic, short-term benefit. But in the long run, such grant making not only hurts the family, but also hurts investors, the overall economy, and the public's trust in philanthropy. Companies that give to shakedown artists will find themselves at their mercy as they come back demanding more and more. Thanks to corporate-sponsored activism, the economy is saddled with more regulations and bloated government. Meanwhile genuine charities--community and faith-based organizations--are left out in the cold.

The ironic nexus between large corporations and "big government" also explains the ambiguities of corporate philanthropy. Consider the widely discussed issue of global warming. Last year, leading auto and oil companies were bankrolling environmental groups that were working closely with the Clinton administration to regulate further the auto and oil industries. In June 2000, President Clinton's National Science and Technology Council -- which included representatives of several corporate-backed environmental groups -- released a report on the National Assessment on Climate Change that predicted alarming consequences that would result if changes in the climate were not checked by aggressive government action. Groups involved in the Clinton-backed study included three groups funded by corporate coffers: In 1996 and 1997, the World Wildlife Fund received $200,000 from Ford, $20,000 from Daimler Chrysler, and $35,000 from General Motors; from 1996 to 1998, the World Resources Institute received $149,621 from Ford and $40,000 from BP Amoco; and the Progressive Policy Institute received $30,000 from BP Amoco from 1996 to 1998.

Last year, the House of Representatives approved President Bush's plan to increase funding for faith-based organizations. Known as H.R. 7, the resolution allows groups with religious affiliations to apply for $47 billion in government grants for services ranging from job training to elderly services. The bill also allows corporations to write off up to 15 percent of their taxable income for charitable contributions. Corporate America needs to take this cue from the Bush administration, rethink their bans on giving to faith-based groups, and begin investing in family-friendly, community-based organizations.

The continuing trend of corporate misgiving -- grant making to advocacy groups hostile to the free market and traditional values -- becomes even more troublesome as the country faces difficult economic times. Corporations need to include employees and shareholders in grantmaking decisions. Foundation bureaucrats must not remain unresponsive to the values of Americans who work for and invest in their companies. In order to change corporate grantmaking behavior, employees and stockholders will first have to become more aware of corporate philanthropy. Before they invest savings in its stock or purchase its products, they should demand to know more about the corporation's philanthropy. The watchword should be: "Follow the Money."

This article appeared in the November/December 2001 Family Policy magazine, a publication of the Family Research Council.