This afternoon Facebook CEO Mark Zuckerberg will testify before a joint session of the Senate Judiciary Committee and the Senate Commerce, Science, and Transportation Committee on the company’s recent Cambridge Analytica privacy scandal, in which personal data from some 50 million ,87million, maybe far far more million users ended up in the hands of an outside research firm that worked with the Trump campaign, all without those users’ permission.

Tomorrow, Zuckerberg will be center stage for a repeat performance before the House Committee on Energy and Commerce.

Beyond the hyperventilating grandstanding of the Committees’ members which is a sure thing, most observers predict that one result of these hearings is likely to be an eventual legislative move toward privacy regulation.

It will take months—more likely, years—before any privacy regulation in the U.S. gets to the point of affecting nonprofits the way the General Data Protection Rules (GDPR) have touched the operating lives of charities in the UK and the EU. We’ll keep you posted.

MEANWHILE…even though the Facebook elephant is in the center ring of the Capitol Hill Circus Nick and I will use this week to highlight some methods/approaches to fundraising you will hopefully find of interest. Let’s start with…

…Corporate Philanthropy

A staggering amount of disposable wealth in the U.S. is lodged in pockets of corporations, their foundations and the foundations of the super wealthy who founded them.

They have choices when it comes to spending money. They can allow the IRS to tax their profits and capital gains, or they can dispose of some of their fortunes via philanthropy. Increasingly, they’re choosing philanthropy.

Although business leaders would like us to believe these philanthropic contributions represent what The New York Times calls “the ringing voice of a company’s social conscience”, it ain’t always so.

As the Times notes:

• “Exxon Mobil may stand accused of misleading investors and shareholders about what it knew about climate change, but the ExxonMobil Foundation’s multimillion-dollar contributions to end deaths from malaria and to train women in developing countries should, executives hope, balance the ethical ledger.

• “The same goes for the Walmart Foundation’s contributions to reduce carbon emissions in China and to protect wilderness areas in the United States, or the Dow Chemical Foundation’s contribution to Habitat for Humanity. These companies might be ruthless in their lines of work — fighting against environmental regulations or more stringent labor standards — but their foundations are in it to do good to the world.”

In yesterday’s Agitator post I noted the increasing difficulty of measuring just how much money, and from what sources, contributes to the growth of the charitable giving pie.  The problem has grown more severe as corporations –and super wealthy individuals—have figured out ways to work around tax laws and campaign finance laws designed to prevent abuse. To ensure that the public subsidy in the form of a charitable tax deduction really meets a charitable purpose.

Well, it turns out that this charitable claim of corporate do-goodism may be somewhat bogus. Especially when it comes to mixing charity with self-serving politics.

Amidst Washington’s crocodile tears over “corruption” and politicians’ election year vows to end it comes a study titled Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence from the prestigious National Bureau of Economic Research.

Here’s how the New York Times summarized the researchers’ findings:

“Sifting through the donations to charity from 1998 to 2015 by foundations set up by the largest companies in the United States — those in the Fortune 500 or the Standard & Poor’s 500-stock index — Marianne Bertrand of the University of Chicago’s Booth School of Business; Matilde Bombardini and Francesco Trebbi of the University of British Columbia; and Raymond Fisman of Boston University detected a pattern of contributions to 1,087 charities linked to 451 members of Congress.

“Turns out that the spending is a little more self-serving than companies would have us believe. Some of the charitable giving looks a lot like corporate lobbying. Because companies get a break for such giving, it amounts to political spending at taxpayers’ expense. ‘Firms deploy their charitable foundations as a form of tax-exempt influence seeking,” the researchers write.

So, in today’s hearing, when Senator Chuck Grassley, Chair of the Senate Judiciary Committee grabs the microphone you might want to remember that there are several ways corporations work overtime to please him with their contributions.

• Their corporate Political Action Committee (PAC) could contribute to his campaign;
• But if they want to slip into the cover of a loophole they could donate to the Partnership for a Drug-Free Iowa, where the senator has been an honorary advisory board member.
• A corporation could also give to the University of Northern Iowa Foundation, on whose board Mr. Grassley sat as a trustee. As the Times notes: “Over the period covered by the study, the foundations of AT&T, ConAgra Foods, General Electric, Goldman Sachs, Medtronic, Merck, Monsanto, Nationwide Insurance, Principal Financial Group and Rockwell Collins all contributed to one or the other.”

Here’s a startling fact surfaced by the researchers as reported in The NYT:

“Over 7 percent of charitable donations by corporate foundations are intended to buy political leverage. Applied to $18 billion worth of corporate philanthropy in 2014, that would amount to $1.3 billion, almost four times as much as total political action committee contributions that year and 40 percent more than the corporations’ lobbying expenditures.”

It’s time to ask:  Just how “charitable” is all this corporate charitable giving? Is a company really advancing the public good (as the charitable tax laws intend) when its giving is aimed at affecting legislative and policy outcomes for its own benefit—even if those interests are counter to the public good?

Of course, not all corporate philanthropy is misanthropic.  Tomorrow, Nick will share a jaw-dropping example of the opposite.  But, with the wave of scandals engulfing Washington it’s wise to be alert to the potentially high cost that comes with some corporate philanthropy run amok.

The eternal optimist in me wonders if today Mark Zukerberg, who has already pledged to use 99% of his Facebook shares to benefit human potential and equality will commit to defending democracy over corporate gain.

Roger