Charity Governance

CORPORATE SOCIAL RESPONSIBILITY: THE START OF A BACKLASH?

DATELINE: August 23, 2010, Chicago

The Wall Street Journal has a special section in today’s paper entitled, The Journal Report.  The lead story carries the moniker, The Case Against Corporate Social Responsibility.  Not much new ground covered here, but the feature is very well written and lays the issues out.  We, however, can’t help but wondering whether this is a signal to the corporate community to get back to knitting (i.e.,a singular focus on profit maximization).  After 18 months of constant criticism by the political class, is Corporate America rethinking or being urged to rethink its apparent movement toward compassionate business practices?  Being nice guys doesn’t seem to buy them respect so why not go back to the old ways?

Those certainly were our initial questions when we read the headline.   Surprisingly, the article notes that if you want social responsibility from business, the best way to achieve it is through government regulation.  Aneel Kamani, an associate professor at University of Michigan, penned the article, so the Journal’s editorial page editors can’t be blamed for this seeming blasphemy.  The Journal certainly is open-minded in allowing this to be printed on their pages.  We nevertheless suspect that there are several editorial page editors who are still retching at the notion that government regulation could be good and such a statement appears anywhere in the Journal. 

For us, the bottom line is quite simple.  Those who want more from business than just profit maximization should be careful with non-stop criticism of the business community.

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SUSTAINABLE?

Sleeping is giving in, so lift those heavy eyelids.

Arcade Fire, Rebellion (Lies) from Funeral

DATELINE: June 30, 2010, Chicago

As regular readers of this column are well aware, the drive to enable benefit corporations in New York has resulted in a flurry of activity...

BEWARE: BENEFIT CORPORATIONS APPEAR TO BE A TROJAN HORSE DESIGNED TO FEED AT THE PUBLIC TROUGH

DATELINE:  June 29, 2010, Chicago

Recall that the New York State Senate recently passed S7855 to enable the creation of benefit corporations.  We decided to take closer look at New York’s existing corporation law to see whether this pending legislation is really necessary.   The legislative history to the bill states:

Currently, socially-minded companies are often left with the catch-22 of either not being able to earn a profit or opening their directors up to possible personal liability for decisions that do not maximize shareholder value or increasingly going to states other than New York that are pursuing this corporate form. This bill solves that dilemma. Without increasing regulation or impacting the state budget, the bill: * Removes legal impediments preventing businesses and investors from making their own decisions to use sustainability and social innovation as a competitive advantage.

We are not at all sure...

WE ARE SKEPTICAL ABOUT BENEFIT CORPORATIONS: EXISTING CHARITIES SHOULD BE MORE THAN SKEPTICAL

DATELINE: June 29, 2010, Chicago

We're going to do our dance, Bring the doubters on. They don't matter at all 

Justin Bieber, Never Let Go from My World 2.0

Yesterday, we wrote about the benefit corporation legislation working its way through the New York State legislature.  We are even more skeptical today than we were yesterday.  One group behind what appears to be an effort to bring benefit corporation legislation to every state is B Labs, a nonprofit corporation that certifies B corporations. 

Yes, we said...

SOCIAL ENTREPENUERSHIP: SELECT YOUR PARTNERS CAREFULLY

DATELINE: May 24, 2010, Chicago

The Washington Post is reporting on a small public relations problem faced by the Nature Conservancy.  Joe Stephens, Nature Conservancy Faced Potential Backlash From Ties with BP.  The Conservancy might have considered a relationship with ExxonMobil, Chevron, Royal Dutch Shell, or dozens of other oil companies and suppliers.  Luck would have it, the Conservancy picked British Petroleum—you know the folks that...

HUMANEWATCH.ORG FULL-PAGE AD IN NY TIMES IS CLEVER, BUT DOES THE ORGANIZATION LIVE IN A GLASS HOUSE?

DATELINE: May 17, 2010, Chicago

The Humane Society of the United States (HSUS) must be busy today, following the appearance of a full-page ad in the New York Times screaming that the “Humane Society of the United States is NOT your local animal shelter.”  That certainly is taking it to the man.  Hurt the HSUS where it counts, in its pocketbook.  Let us preface our comments:  We don’t have a dog in this fight, although that is probably a poor turn of phrase in the current context.

We initially assumed HumaneWatch.org was a coalition of local shelters that was just trying to remind the public that local shelters require financial support.  If that were the case, the ad would strike us as precedent setting.  While all charities compete with each other for dollars, we don’t recall ever...

NOT ALL PUBLICITY IS GOOD, PARTICULARLY WHEN IT COMES TO SEX

DATELINE: May 7, 2010, Chicago

We, like many of the New York Times’ readers, were drawn to Robin Pogrebin’s headline earlier this week:  Tax Break for Erotica? A Museum Favors It  (May 3, 2010).  Any article that begins with a reference to a New York dominatrix in its first sentence is worth a read, even if it doesn’t involve philanthropy.  This article, however, turns out to be a treasure trove, raising an important tax issue.

Although we are frequent visitors to NYC and its museums, we had never heard of...

GOLDMAN SACHS TRIES TO DEFUSE POPULIST LYNCHING THROUGH THE BEARD OF CHARITY

DATELINE: January 13, 2010, Chicago

Monday brought us Mark McGwire’s tearful confession that he used steroids.  That confession—in time for Spring training—was brought to you by the same public relations strategist that brought you the still smoldering Iraq War, one Ari Fleischer.   While Ari was working the way to turn a cheater into a Hall of Famer, some publicist for Goldman Sachs presumably was busy preparing...

CALIFORNIA ATTORNEY GENERAL ON THE ATTACK

DATELINE: September 14, 2009, Chicago

The California Attorney General has brought suit against individuals associated with the L.B. Research and Education Foundation (Foundation).  Raja Abdulrahim, UCLA Surgeon Sued for Benefiting From His Own Charity, L.A. Times (Sept. 10, 2009).  Given the allegations in the AG's complaint and the newspaper coverage, we are willing to bet that the IRS will join the fray, if it hasn't already.

The suit names Dr. Gerald D. Buckberg,five others who are or were Foundation officers or directors, and 50 unnamed individuals.  At the heart of the suit are allegations over self-dealing, but the AG has thrown just about everything imaginable at the defendants.  If the facts are anywhere close to the alleged ones, we’d recommend that the defendants...

THE COMING REALIGNMENT WILL BE POETRY TO OUR EARS: LESSONS FOR INVESTMENT COMMITTEES

DATELINE: January 21, 2009, Chicago

Ian Wilhelm of the Chronicle of Philanthropy caught our eye earlier this week with an article about how the economy is impacting the Geraldine R. Dodge Foundation.  Investment Losses Force Foundation to Cancel Poetry Festival (Jan. 16, 2009).  Yes, another article on how the economy is screwing up a charity's well-intentioned plans.  The Dodge Foundation is focused on poetry.  We suspect that charities with that focus are few and far between.  We further suspect most are undercapitalized.  Not the Dodge Foundation.  It started 2008 with $305 million in assets, but ended it with...