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Non-Profit Non Sequiturs.

"The capitalists will sell us the rope by which we hang them," V.I. Lenin once declared. These days, they're giving away the rope for free.

While liberal advocacy groups are rarely Leninist, U.S. companies do finance many left-of-center non-profits. This corporate philanthropy helps these organizations pressure policy makers to increase regulations, taxes and public expenditures. In short, American industry feeds the mouth that bites it.

The Capital Research Center's Patterns of Corporate Philanthropy, illustrates how the Forbes 250 subsidize their own headaches. Consider these migraines from 1995, the latest year CRC has analyzed:

* Chevron awarded the Audubon Society $10,000 while Atlantic Richfield handed it $1,000. Audubon is fighting to prevent petroleum exploration in the Arctic National Wildlife Refuge even as it extracts natural gas from its own Louisiana bird sanctuary.

* NBC's owner, General Electric, provided the NAACP $50,000 while ABC's parent, Walt Disney, donated $5,000 to the liberal civil rights group. Last summer, NAACP president Kweisi Mfume announced plans to boycott the TV networks "because none of the 26 new shows slated for the fall season have a minority in a leading or starring role." The NAACP also threatened to sue under the 1934 federal Communications Act unless the networks reversed what Mfume called a "virtual whitewash in programming" and placed more minority actors on-air.

* BankAmerica contributed $75,000 to the Greenlining Institute. Last year, it led 35 other groups in filing a protest with the Federal Reserve against BankAmerica's merger with NationsBank. Greenlining demanded greater diversity among the corporation's management and board.

* Chase Manhattan Bank gave $158,750 to ACORN (Association of Community Organizations for Reform Now!). PNC Bank furnished another $97,000. ACORN lobbies Congress for tighter lending regulations and limits on bank mergers and acquisitions. ACORN also wields the federal Community Reinvestment Act to dragoon banks into offering low-interest and minority-targeted loans. First Union chairman Edward Crutchfield calls this practice "pure blackmail."

ACORN's website concurs: "ACORN, unlike most social service non-profits, scorns charity. Their goal is to help poor people seize power."

Left-wing corporate check-writing is just half the problem. Most American companies are stingy in funding think tanks and other non-profits that persuade lawmakers to cut taxes, reduce public spending, liberate trade, deregulate and otherwise foster free enterprise. In 1995, CRC reports, American companies donated $25.54 million to liberal advocacy groups versus $7.91 million to their market-oriented counterparts. (While these sums are rounding error to most CFOs, they are life itself for non-profits.) What explains this $3.23-to-$1.00 leftward tilt?

Clearly, some corporate gifts match the views of liberal CEOs. Still, this is rarely "their money." It usually belongs to shareholders whose portfolios can suffer after corporate-sponsored liberal groups score policy victories.

For other CEOs, company philanthropy "is a small part of their revenue stream, so they can't be bothered," explains Robert H. Malott, former CEO of FMC Corporation. "That's nonsense, because it has a great impact on who you are and what you stand for, both internally and externally."

Many companies pay grants as "hush money" to their critics.

However, corporate-funded non-profits continue to promote statist ideas rather than disappear quietly with their donations. "You're not going to buy off these groups," warns Dr. Herbert London, president of the conservative Hudson Institute. "They have a definite motive in mind, and the motive is to engage in a form of redistribution and to control the free market. So long as they are intent on doing that, most companies are adversely affected."

Large, established firms sometimes applaud as groups they fund militate for red tape that may suffocate smaller, poorer competitors. And in other cases, CEOs simply may placate spouses who want to "befriend Earth and defend children." So much boils down to pillow talk. What is to be done about all this?

CEOs "can't sit there and rationalize the crap that's going on," Malott says. "They ought to sit on their foundation's board. They ought to participate in the decisions on where money is given." The CRC and the Philanthropy Roundtable in Washington, D.C., can advise executives who want their corporate donations to advance economic liberty.

By simply keeping their eyes on the eleemosynary prize, CEOs might start to loosen the nooses strung around their necks.

New York commentator Deroy Murdock is a senior fellow with the Atlas Economic Research Foundation in Fairfax, VA, and a media fellow with the Hoover Institution at Stanford University.
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Author:Murdock, Deroy
Publication:Chief Executive (U.S.)
Date:Nov 1, 1999
Words:740
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