Tuesday, June 16, 2015

Complaint to IRS alleges Walmart used foundation grants to its business advantage

Posted By on Tue, Jun 16, 2015 at 6:34 AM

walmart-foundation.png

A coalition of labor organizations and community groups filed a complaint yesterday with the Internal Revenue Service that alleges Walmart has targeted its grantmaking via the Walmart Foundation to soften opposition to its expansion in several major U.S. cities.

The Walmart Foundation is a charitable nonprofit distinct and separate from the Walton Family Foundation, which engages in explicit advocacy work around education and other issues. The Walmart Foundation's website says the nonprofit gave $309 million in cash worldwide in 2014 and another $1 billion in-kind.

But the complaint alleges that some of those donations were made with an eye towards promoting Walmart's business interests in cities with strong opposition to the retailer's expansion into local markets, such as New York, Los Angeles and D.C.

The group claimed donations spiked around efforts to open stores in a community. For example, it said donations in Los Angeles jumped to $1.4 million in 2011 as plans for a new store in Chinatown gathered steam before dropping off to $230,000 in 2013, the year it opened, the complaint said.
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In the 22-page complaint the group also claimed that Wal-Mart was only soliciting applications from groups that did not put the company in a negative light.

If the IRS finds that the foundation's grantmaking was intended to help the business secure market share, that could be a violation of its status as a tax-exempt nonprofit.

Walmart, of course, said the complaint was without merit.

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