Tuesday, November 19, 2019

Business Models And #Woke: Corporate Charity

     There are few things less rational than the prioritization of irrelevancies – social, political, or otherwise – in the operation of a business. A business that tolerates the inclusion of non-business priorities in its decision making is dancing barefoot at the edge of a blazing fire. Non-business priorities have a terrible tendency to eclipse business priorities, such that the whole point of creating and running a business – that’s to make money, for those who haven’t tried it – is lost. This has been demonstrated many times by the #Woke phenomenon.

     Mind you, few publicly traded companies in America haven’t done the very thing I’m railing against. Pick up the stock-market pages of your preferred publication, randomly select a company from the listings, and the odds will be 99 to 1 that the selected company has included one or more non-business priorities among its regular practices, and has trumpeted it in an attempt “to burnish the company’s image.”

     But what can a company buy with its “image?” I don’t know of any market where the goods are priced in that particular coinage. I would question the sanity of any executive who pursued “image” in preference over profit...yet huge numbers of them do that very thing.

     The most common form of this commercial sin is corporate charity. Virtually all the companies traded on the New York Stock Exchange practice it. So do most of those on the NASDAQ system. To me it looks like a crime against the stockholders: the folks who’ve invested in the company and have a legal expectation of dividends from its profits.

     Far too many CEOs prefer to give from the corporation’s coffers, their rationale being that it helps to “burnish the company’s image.” In these latter years of the Republic, that invites all manner of challenges from those who are unsatisfied with the company’s dividends, or who differ with the company’s charitable choices. These days a lot of the flak originates from activist groups rather than from the stockholders.

     The moral case against charity by a publicly traded company is absolute. The practical case against charity by a privately held company is equally strong...by which route we come to the news about Chick-fil-A:

     LONDON (Thomson Reuters Foundation) – U.S. fast-food chain Chick-fil-A said on Monday it had stopped funding two Christian organizations, including The Salvation Army, that have come under fire from LGBT+ campaigners.

     The fast-food chain’s charitable arm, Chick-fil-A Foundation, donated millions of dollars over a period of years to The Salvation Army and to the Fellowship of Christian Athletes (FCA), which opposes same-sex marriage.

     Chick-fil-A said on Monday it no longer funded these organizations and would instead focus its giving on “education, homelessness and hunger”.

     “We made multi-year commitments to both organizations and we fulfilled those obligations in 2018,” a spokeswoman for Chick-fil-A told the Thomson Reuters Foundation.

     The family-owned company said in statement that it would no longer make multi-year commitments and would focus on partnerships annually to “allow maximum impact”, which could include faith-based and non-faith-based charities.

     That LGBT activists have railed against Chick-fil-A for its charities – and for its founder’s convictions about same-sex marriage – is not news. They’ve been at it since the restaurant chain became generally known. It’s part of their sociopolitical and cultural strategy that no one who disagrees with their stances, however insane those stances may be, is permitted to go unscathed. Remember what happened to Sweet Cakes by Melissa, to Memories Pizza, and to Brendan Eich, formerly the CEO of Mozilla.

     The great irony here is that what a company’s management does with the company’s profits has absolutely no bearing on the quality or efficiency of the people who do 99% of the company’s work. It certainly has no bearing on what the line employees do with their bodies, property, or spare time. Yet activist groups’ favorite tactic, the heavily publicized boycott, does far more injury to the line employee, the guy who spends eight hours per day making sandwiches for customers, than to the CEO and his direct subordinates, who make the decisions about the company’s charitable giving.

     If I were a corporate CEO, and had charitable impulses to satisfy, I’d give out of my own pocket. If my company were publicly traded, the company’s stockholders would be unable to accuse me of spending their money on my notions of good works. But even if my company were my personal property, my charitable choices might still be attacked by activist groups. The earnings and well-being of my employees would probably take most of the damage...if I were vain enough to let my giving be made public.

     But if I were to follow the advice of a certain Jesus of Nazareth:

     Take heed that ye do not your alms before men, to be seen of them: otherwise ye have no reward of your Father which is in heaven. Therefore when thou doest thine alms, do not sound a trumpet before thee, as the hypocrites do in the synagogues and in the streets, that they may have glory of men. Verily I say unto you, They have their reward. But when thou doest alms, let not thy left hand know what thy right hand doeth: That thine alms may be in secret: and thy Father which seeth in secret himself shall reward thee openly. [Matthew 6:1-4]

     ...my charitable giving would be unknown to anyone, including the beneficiary organizations. No one would know that I had done it, nor to whom my gifts had gone. I would be immune from the attacks of activists, as would those who work for my company.

     This is not a reproach of Chick-fil-A or its owners. The company has earned its customers’ respect. Its owners’ hearts are definitely in the right place. But they would have been better advised to separate their charities from their commercial enterprise, and to keep their giving entirely private insofar as that’s possible. No one can target what he knows nothing about.

     To the real-life CEOs out there: You will be targeted by charitable organizations, which will importune you for contributions. If you permit them access to you as the CEO of your company, you will regret it. Chick-fil-A is already regretting it. Even if you permit them to approach you as an individual, there are dangers – and not just to you, but to your employees. The only way to avoid the assaults of the #Woke crows is to do your own research into worthy charities, choose one or more of them, and donate to them anonymously. Don’t imagine you have a need to dress up your “image,” or that of your company. It’s a phantasm and always has been.

     Concentrate on putting out an excellent product and making money.


Manu said...

Woke Capital is so tiresome. I wrote a long screed on this same topic over at my place, and the basic thrust was that I think this was inevitable.

Bowing to Social Justice pressure is the safe course for most big companies, because of the relative intolerance of the Left. They could do as you say here, and completely separate charitable efforts from the business, and that would be better economically and morally.

But I doubt SJWs would let them off the hook so easily. So long as any of the same individuals are present in both organizations, they will tar the company with the same brush.

Indeed, I saw some Lefties in the local Facebook groups saying "well, it's good that they did this, but that doesn't mean their views have evolved. This isn't enough!"

What would be enough?


The owners could donate all of their shares to an LGBT organization, don the sackcloth and put themselves in public stocks and beg for forgiveness, and then take their own lives in penance, and the SJWs would still say they are bigots.

But fighting the social justice trend is expensive, and possibly ruinous for a company, and so here we are.

It sucks.

Kye said...

For 37 years in the restaurant/tavern business I never once advertised for any political candidate or proposition nor gave to any charity via my business. My politics and charitable preferences are my personal business and have no reason to be included in any money making enterprise.

Six months ago I left the Lutheran church because they became so tediously woke and leftist I could no longer abide them in good faith. Along with me went my 10% tithe. I sat with my wife and we decided to break it up between three charities and did so. We also have other organizations (the Salvation Army being one) that we support beside the tithe. We have no need to advertise the amount or recipients thereof.

Fredd said...

Corporations that give money to charitable causes are indeed screwing their shareholders. They have a fiduciary responsibility to use those funds to either grow the business or to pay dividends. To do otherwise is irresponsible.

Trying to buy a charitable image by these donations that are publicized is indeed un-Christian. Just give the money, and shut up.

Linda Fox said...

I can’t think of an organization that does more for the homeless than the Sallies. The trouble with the guys running the company since Cathy’s death is that they are lukewarm Christians. No fortitude. No conviction.