This is my second entry based on the National Committee for Responsive Philanthropy's recent report on Wal-Mart's philanthropic activity. The first is
here and covers charitable giving through the Wal-Mart Foundation. This one covers Wal-Mart's lobbying and politically-oriented giving.
Thanks again to the Committee for sending me the report. If you are really serious about understanding the phenomenon that is Wal-Mart, you should head over to their site and buy a copy.
Unlike the Wal-Mart Foundation, which is funded through Wal-Mart Stores Inc, the Wal-Mart Family Foundation (WFF) is smaller, and, as the name suggests, has been endowed by the Walton family. As I've explained in this space before, they are perhaps the greatest funders of school choice programs in the United States:
Currently, some of the largest recipients of WFF grants are school reform/choice groups such as: The American Education Reform Council, the Center for Education Reform, Children's Scholarship Fund, Colorado League for Charter Schools, the Florida School Choice Fund and others. Each of those groups received grants exceeding $1 million in 2003. The second largest recipient was the Children's Educational Opportunity Foundation of America, also known as Children First America (CFA). CFA received $10.57 million in 2003 and $8.3 million in 2002. CFA is a lobby group that works to "promote parental choice in education through private tuition grants and tax-funded options," by providing research and publications to school choice groups and submitting amicus curie briefs to the U.S. Supreme Court on voucher issues.
And some people wonder why teachers care where their students shop. What I didn't understand until reading this report is that Wal-mart's influence over education is only likely to grow stronger:
As influential as the Walton family already is, its influence through the WFF will only increase....[I]t is anticipated that upon her death, the bulk of Helen Walton's 20 percent stake in the family enterprise will be given to family foundations. This sum of approximately $18 billion to $20 billion, depending upon the value of Wal-Mart stock, will propel the WFF to the top of the list of large foundations.
This dovetails nicely with the Walton's main political objective in Washington, repealing the estate tax:
According to Aubrey Rothrock III, [one of Wal-Mart's law firm's lobbyists], the family is focused on bills that would increase charitable giving through the Waltons' family foundation. The family is focused specifically on the permanent repeal of the state tax, a permanent cut to the dividend tax, and other legislation that would preserve the the family fortune.
But it's not just a question of preserving money, it's about preserving control:
Together, the family owns about 40 percent of all Wal-Mart stock, which gives them effective control of the company. However, upon the death of Helen Walton, who owns a fifth of the family's stake of Wal-Mart, the family would likely have to sell a large amount of its Wal-Mart stock to pay the estimated billions in estate taxes that would be due....As stated earlier, it is believed that Helen will leave most of here estate to the WFF, which would eliminate most, if not all, of its estate tax responsibilities. However, due to federal restrictions that allows a a foundation to hold a maximum of 2 percent of a company's shares and requires anything over 2 percent to be sold within 5 years, the family may still have to sell much of Helen's Wal-Mart stock.
Of course, then:
The Walton family has supported bills that would allow it to maintain control of more Wal-Mart stock through the foundations.
So far, nothing has passed. But if we are ever going to change Wal-Mart and stop the plutocracy from taking over this country, people have got to focus like a laser beam on this less than sexy, but horribly important topic.
JR