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(DV) Berkowitz: Wal-Marting Philanthropy







Wal-Marting Philanthropy
by Bill Berkowitz
November 2, 2005

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Upon the death of Helen Walton, the frail and aging widow of Sam Walton -- the founder of the Wal-Mart Empire -- the Walton Family Foundation (WFF) could receive as much as $20 billion, making it the largest and potentially most powerful foundation in the world, according to a new report by the National Committee for Responsive Philanthropy.

While members of the Walton family have their own philanthropic projects, the Walton Family Foundation and the Wal-Mart Foundations are the family and company's flagship philanthropic enterprises. The Walton Family Foundation currently gives away more than $100 million a year -- a healthy chunk of it to opponents of public school education. The Wal-Mart Foundation donated more than $170 million in 2004, 90 percent of which went through its local stores to small community and faith-based organizations.

Another entity, the Wal-Mart Stores Inc. Political Action Committee for Responsive Government, earmarks the vast majority of its contributions to Republican Party political candidates and Republican political committees. Of the $2.1 million the PAC gave in 2004, $1.6 went to the GOP while less than $500,000 went to Democrats.

"The Waltons and Wal-Mart: Self-Interested Philanthropy," the new report by the National Committee for Responsive Philanthropy (NCRP), examines the intersection between corporate philanthropy and public policy by looking closely at the philanthropic efforts of the Walton family. "The importance of the Waltons is not how much money they are giving now, but how much money they will be giving in a few years and where the money will be going," the report states.

Philanthropic endeavors and contributions to political candidates and political action committees (PACs) have increasingly become a way the wealthy can divest of surplus capital while promoting their political and social agendas. In 2004, "corporations and their foundations... contributed $12 billion in cash and in-kind donations to charities," the NCRP report documents.

Over the years, wealthy conservatives and liberals have plowed millions of dollars into an assortment of political projects. While the Koch and Scaife families have supported a number of mainstream charitable endeavors, a large portion of their grant-making goes to conservative ventures -- including the creation and sustenance of a vast array of right wing think tanks, public policy institutes, and media outlets. In recent election cycles, George Soros and Peter Lewis have become "very visible progressive donors ... to both charity and politics," according to the report.

John Walton, killed in an airplane crash earlier this year, was "the activist in the family, working to fund political campaigns for school vouchers and charter schools and directing much of the family's charitable giving." It is expected that the Walton Family Foundation's expected cash transfusion would lead to an increasing support for conservative candidates and conservative causes.

Wal-Mart, the Bentonville, Arkansas-based company has become a household name over the past two decades; the Walton family controls nearly 40% of the company's stock (4.3 billion shares) worth some $90 billion.

Worldwide, Wal-Mart stores provide shoppers with deeply discounted merchandise at its more than 5,000 stores (3,400 in the U.S.). However, the low prices on the shelves of the world's largest retailer belie the heavy price tag both workers and consumers pay in communities where the big-box retailer is located.

Workers are grossly under-paid and overworked in sweatshops overseas, while their non-union counterparts in the U.S. often cannot afford decent healthcare for their families. Wal-Mart has been the target of a flood of suits; it is currently the defendant in the largest sex-discrimination class-action lawsuit ever, a suit representing more than 1.5 million women. When Wal-Mart comes to town, many small businesses close down and the company's bottom line is dependent upon the soaking up of hundreds of millions of dollar in taxpayer subsidies extracted from cash-strapped county budgets.

(A May 2004 study by the Washington, DC-based Good Jobs First entitled "Shopping for Subsidies: How Wal-Mart Uses Taxpayer Money to Finance Its Never Ending Growth," found that the company has siphoned more than one billion dollars in economic development subsidies from state and local governments across the country.)

When Sam Walton died in 1992, he left the bulk of fortune to his wife Helen and their four children, Sam Robson (Rob), the late John, Jim, and Alice.

Citing statistics from the Foundation Center, a group tracking philanthropic activities, the NCRP report points out that in 2003 the Wal-Mart Foundation "was the 51st-largest corporate foundation based on assets and the second-largest based on total giving"; figures that includes in-kind and product donations. Newsweek reported that WMF has consistently ranked first in total giving based only on cash contributions. Wal-Mart reported that WMF gave more than $170 million in 2004, up nearly $60 million from two years earlier. According to the company's figures, "more than 90 percent" of its donations go through its local stores.

Although The Wal-Mart Foundation prohibits the funding of "faith-based organizations whose projects benefit primarily or wholly their membership or adherents," nevertheless, "churches and other houses of worship receive a large percentage of... grants," according to the report.

In 2003, the Walton Family Foundation (WFF) was the 63rd-largest foundation in terms of assets ($733+ million) and 25th-largest in terms of giving (nearly $107 million).

WFF concentrates its giving on three spheres: education reform, the northwest region of Arkansas, and the Delta region of Arkansas and Mississippi. Before his death, John Walton was "one of the nation's leading private individual funders of charter schools and voucher initiatives," the NCRP report states. "Why," the report asks, "is the richest family in the world so committed to education, and specifically to school choice, when they themselves mostly attended public school to apparently good effect?"

"Some critics argue that it is the beginning of the 'Wal-Martization' of education, and a move to for-profit schooling, from which the family could potentially financially benefit. John Walton owned 240,000 shares of Tesseract Group Inc. (formerly known as Education Alternatives Inc.), which is a for-profit company that develops/manages charter and private school as well as public schools."

The WFF provides more than $1 million dollars to a number of so-called school reform/choice groups. The Children's Educational Opportunity Foundation of America (also known as Children's First America) received $10.3 million in 2003 and $8.3 in 2002. It has also funded the Washington, DC-based Black Alliance for Education Options (BAEO), an African American group working "to advertise and market the school voucher movement top African-American families."

In addition to supporting "school reform" issues, the WFF "funds pro-voucher think tanks like the Goldwater Institute and the Manhattan Institute for Policy Research," People for the American Way has reported. People for the American Way pointed out that "on the legislative front, John Walton personally contributed $2 million to the failed 2000 Michigan voucher initiative as well as $250,000 to California's Prop 174 in 1993, another unsuccessful voucher initiative. Walton also bankrolled the California effort through his American Education Reform Foundation, as well as an unsuccessful 1997 voucher campaign in Minnesota."

Since its founding, Wal-Mart has incessantly expanded across the US and throughout the world. Over the past few years, it's presence in Washington, DC has grown considerably: it hired its first Washington, DC lobbyist in 1998; in 2000, it opened a Washington, DC office and now it employs six lobbying firms (in addition to its own), and has become a top PAC contributors to federal candidates.

"Wal-Mart and the Walton family have only recently begun to translate their vast wealth into political power," the report concludes, and with Helen Walton's $18-20 billion coming down the pike, the future of the Walton Family Foundation looks bright indeed.

Bill Berkowitz is a longtime observer of the conservative movement. His column Conservative Watch documents the strategies, players, institutions, victories and defeats of the American Right.

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