In March, a group of economists issued a study examining patterns of charitable giving by corporate foundations. Through data and analysis, the group found a connection between corporate charitable giving and lobbying efforts. One particular finding was that corporate foundations favored supporting charities directly linked to politicians.
As the New York Times points out in its coverage of the study, the federal campaign finance laws do not generally require disclosure of corporate contributions to charities.
However, both the Times and the researchers appear to have overlooked that federal lobbying laws do require such disclosure, when lobbyists give to charities closely associated with certain federal government officials.
Specifically, under the Honest Leadership and Open Government Act of 2007, federal lobbying registrants—which include both individual lobbyists and their corporate employers—must disclose the date, recipient, and amount of contributions made:
- To pay the cost of any event that honors or recognizes a covered legislative or executive branch official;
- To any entity that is named for a covered legislative branch official;
- To any person or entity, in recognition of a covered legislative branch official;
- To any entity established, financed, maintained, or controlled by a covered legislative or executive branch official;
- To any entity designated by a covered legislative or executive branch official;
- To pay the costs of any meeting, retreat, conference, or other similar event held by, or in the name of, one or more covered legislative or executive branch officials; or
- Contributions to a Presidential Inaugural Committee or Presidential Library Foundation.
While these reports do not generally cover giving by a corporation’s affiliated foundation, they do cover donations made from corporate treasury funds and corporate PAC funds. Federal lobbyists file these reports semi-annually. The reports are available online and are subject to audit by the Government Accountability Office.
Some states have similar, even broader requirements. For example, California requires certain state and local officeholders to disclose so-called “behested payments” they solicit from third parties for charities and other organizations.
Now more than ever, companies and their executives find themselves under pressure to communicate a message of social and moral responsibility on behalf of their companies. At the same time, federal and state disclosure laws provide the data that can be used to cross-walk the companies’ giving with their legislative priorities. That can create business, reputational and legal consequences. The recent study shows why prudent companies will want to set up processes to manage their charitable giving—especially when elected officials are involved.