Published on: June 16, 2015
The Washington Post
reports that Walmart is being accused of using its charitable foundation to grease the wheels of growth in certain urban US markets, saying that the foundation "appears to target its donations and influence its grantees primarily to assist Walmart to achieve those expansion goals, ultimately providing Walmart more than an incidental benefit."
According to the story, "More than a dozen community groups filed a complaint with the Internal Revenue Service Monday alleging that the Walmart Foundation violated its tax-exempt status by using charitable funds to advance the retailer’s entrance into urban markets including Washington. The 22-page complaint, addressed to IRS Commissioner John Koskinen, details the retailer’s marketing and lobbying activities as it sought approval to open stores in New York City, Boston, Chicago, Los Angeles and other cities."
The New York Times
reports that "the Walmart Foundation’s contributions in some cities rose steadily as Walmart tried to curry local support and gain access in those markets, according to the complaint. The foundation donated just over $200,000 to organizations in Los Angeles in 2008 and 2009, the complaint said, but raised that amount to $1.4 million in 2011, just as plans to open a store were getting underway. In 2013, the year that store opened, donations dropped to about $230,000."
The Walmart Foundation's total charitable contributions totaled $1.4 billion during the last fiscal year.
goes on to say that "nonprofit foundations are prohibited from extracting services on behalf of a company, or diverting funds away from the public to private interests. But they offer corporations undeniable benefits, including good publicity and lucrative tax advantages. And while a pattern of spikes in donations may raise eyebrows, some nonprofit experts say, it may not be enough to prove that the Walmart Foundation ran afoul of I.R.S. rules."
Tricia Moriarty, director of global responsibility communications for Wal-Mart, tells the Post
, “We provide support for these and other important causes in communities across the U.S. and around the world, not just to particular areas or cities, and it’s unfortunate to see criticism of the Foundation’s charitable giving. The Walmart Foundation takes the Internal Revenue Code and regulations very seriously and the allegations made have no merit."