Business Bankrolling of the Left

Big business primarily supports right-wing advocacy groups, right? Think again. A recent report from the Capital Research Center shows Fortune 100 corporate foundations give overwhelmingly to liberal groups. In fact, in the sample year studied (2001), these corporate foundations gave 14 times more money to liberal causes than business-friendly ones. Even more surprising, environmental causes got the most funding, approximately 75 percent of the $60 million from 53 corporate foundations. It should be noted that one environmental organization, the Wildlife Conservation Society-which funds and manages zoos, including the famous Bronx Zoo-received a grant of about $35 million from Goldman Sachs in 2001-skewing results somewhat for the sample year in the study. When you remove that grant, the total amount given comes to about $28 million, of which $24 million-or 85 percent-went to left leaning groups. In fact, liberal groups received all of the top 10 largest grants-with six out of the ten going to environmental groups. Environmental groups got a total of $12 million or 44 percent.Many of the environmentally-related groups that received generous contributions focus considerably on political action. Among those receiving more than $10,000 in total corporate 100 foundation grants are: Conservation International ($4,560,040), National Fish and Wildlife Foundation ($1,000,000), World Wildlife Fund ($680,637), Trust for Public Land ($670,034), World Resources Institute ($502,500), Keystone Center ($459,610), World Resources Center ($30,000), National Wildlife Federation ($16,032), Izaak Walton League ($11,500), and Natural Resources Defense Council ($11,210).One can only wonder why so much support from corporate foundations flows to these groups. Have environmental groups suddenly become more business friendly? It doesn't appear so. For some reason, corporate foundations give to groups that are obviously pushing policies that work against corporate interests. For example, the World Wildlife Fund received more than $680,000 in grants from 11 of the Fortune 100 foundations. Particularly large grants came from Johnson & Johnson ($450,000), Alcoa ($150,000), General Electric ($22,457), and Procter & Gamble ($20,900). Yet WWF has long been a strong advocate of programs that increase regulations on these businesses. For example, it is a key advocate of an expansive regulatory initiative in Europe called REACH-the registration, evaluation, and authorization of chemicals. Expected to become law in 2007, REACH will regulate the production and downstream uses of chemicals. It also covers final products that release chemicals into the environment by design (e.g., air fresheners and laundry detergents) or inadvertently (e.g., plastics can leach trace levels of chemicals). The program will impose a massive new paperwork structure on industry and will likely lead to product regulations and bans that will also be very costly, yet the European Union has been unable to convincingly demonstrate that the program will have any benefits. REACH will likely have adverse impacts for the companies on the WWF donor list, including Johnson & Johnson-WWF's largest corporate supporter noted in the study. While the company's main area of business-pharmaceuticals-is mostly exempt from REACH, indirect impacts are very likely to affect all large companies doing business in Europe. For example, chemicals used by Johnson & Johnson products may disappear from the market, forcing the firm to undergo expensive reformulations of other products. Other ingredients may be much more expensive because of REACH. WWF's other supporters will likely face similar problems. Proctor and Gamble, for example, will likely suffer from both direct and indirect costs. REACH will apply to Procter & Gamble in its role as a downstream user of chemicals as well as regulate the company's finished products. Ironically, many firms in Europe-including its chemical industry association known as CEFIC-actually lend support to REACH. Lobbying efforts have focused on making the program less damaging than earlier versions of the policy. CEFIC supports REACH even though it notes on its website that the program could force firms to remove 10 to 30 percent of substances produced in relatively low levels, reduce innovation and reduce profits.Businesses may believe such support represents a strategic business decision for a number of reasons. Some business lobbyists may think they are just being pragmatic; they figure that like death and taxes, regulation is inevitable. Their only choice is to mitigate the impacts by negotiating the best deal they can get. Some-usually larger businesses-might actually benefit as their competitors suffer more from regulations. This may be true for REACH as it is expected to drive many small businesses out of the market. But that does not explain why a group representing Europe's entire chemical industry supports a regulation when it may put many of its members out of business. The Capital Research Center points out another possibility: Some firms might believe it is good public relations to support nonprofits that claim to represent “the public interest.”But these positions are all short sighted. Larger, more powerful bureaucracies ultimately mean less freedom, less growth and reduced innovation. No one benefits from the resulting stagnation. Perhaps the reason that industry support for regulation runs contrary to conventional wisdom is because it isn't very wise.<?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />