Does Do-Gooding help the stock Do Good?

The American Spectator

"Can CSR help a company's bottom line? Economist Wayne Weingarten analyzed the CSR index compiled by Business Ethics magazine, which looked at 28 prominent companies known to be CSR supporters.

He found that CSR was 'negatively or not correlated with compound annual net income growth, net profit margin, and stock price appreciation.'

I also looked at how Business Ethics magazine rates companies. In the category of 'total return to shareholders,' 48 of 100 companies had negative returns in 2005. The companies were compensated with high scores in such categories as 'diversity,' environment, and human rights. Pity the shareholder.

I also examined the charitable giving of the CSR companies highly rated by Business Ethics. Only 16 of the 39 companies that had corporate foundations gave to what might be called 'political advocacy' organizations, and much of that giving was small and consisted of 'matching gifts.' Even some conservative groups (the Heritage Foundation, Citizens Against Government Waste) received gifts. But lots of corporate foundation giving went to groups that are no friends of corporations -- environmentalist groups like the Natural Resources Defense Council, Greenpeace, Defenders of Wildlife, the Union of Concerned Scientists, Earthjustice, Environmental Defense, and so on. There also were grants to the ACLU, ACORN, Planned Parenthood, and Human Rights Campaign, groups that look to government solutions to social problems rather than to the market. For instance, the Prudential Foundation, the corporate foundation of the financial services giant, has made a grant of $665,000 to the Children's Defense Fund, a group well-known for demanding welfare state entitlement programs.

When I looked at giving by the corporations that are members of Business for Social Responsibility, I found the same trend. Only 40 companies had charitable foundations, but 23 gave to advocacy groups. Again, the giving tilted heavily to the left, especially to environmental groups. "