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Security of foundations: leadership should be denied those who create burden.

How a corporation funds a related foundation and the method in which the cash is disbursed is often whispered about but generally is not brought up in polite charitable company. The sector has a long history of robber barons who have tried to wash clean their indiscretions through tax-exempt foundations.

It is a common occurrence that corporate policy regarding employees places a significant burden on charitable support services. That's why it comes as little surprise that Walmart has decided to quit providing access to health benefits to roughly 30,000 part-time employees.

The question leaders of the charitable sector must ask is how to once and for all deal with foundations created by for-profits that cause the need for charitable services while the tax-exempt foundation goes about with other priorities.

In the case of Walmart, there are two primary foundations that distributed nearly $400 million during Fiscal Year 2012. There's also a web of personal trusts that exceed $4 billion, according to Forbes. Meanwhile, many of the people losing access to insurance will need to avail themselves of free clinics and emergency rooms when an illness could have been nipped early at a physician's office or with insurance on the public market.

Other large retailers have started reducing or cutting healthcare benefits, particularly to part-time employees. The troubling element of the Walmart decision is that the corporation is testing selling health insurance in its stores and plans to roll it out into its 2,700 locations.

There is no doubt that healthcare in the United States is expensive. The idea that the acid reflux medication Nexium is $215 here and $23 in the Netherlands and the average cost of a day in a U.S. hospital is $4,293 compared to $481 in Spain, according to, can be debated another time. This is also not an opening to debate whether the Affordable Care Act is giving for profits the cover needed to slice benefits or is actually driving up prices in some areas.

Leaders at corporate foundations are often power brokers within the sector, simply because of the organization's bank balance. It's time that the sector forced these "leaders" to make a case as to why they should command such a leadership position. You can't create a burden while telling others how to eradicate the scourges they are working on.

The same goes for B-Corporations, the for profit entities that walk around with their figurative chests puffed out saying: "Look at us. We do good." There should be basic guidelines for how employees are treated and how the product is sustainable without burdening another element of the sector.

It will take guts to walk away from the cash waved by many corporate foundations. But when they fund museums (as is the case with the Walton family, which runs Walmart) while potentially burdening the healthcare or other support system, the sector has to stand up and demand the foundation fix the circumstances that were created. And, the C-Suite at such organizations certainly should not be provided a place in sector leadership. NPT

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Author:Clolery, Paul
Publication:The Non-profit Times
Date:Nov 1, 2014
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