On January 6, we witnessed an unprecedented attack on American democracy — the culmination of a sustained campaign to undermine the integrity of the November 2020 election and, ultimately, overturn the will of the people. While our democracy withstood the assault, the insurrection revealed its underlying vulnerability.
Now more than ever, we need to defend democracy. The business community bears some responsibility for our current predicament and has an especially important role to play in upholding democratic norms. Philanthropy can help by holding corporate America to account for its role in degrading those norms, and by encouraging reforms that ensure that corporate political activity works for, not against, the public interest.
In the days following the attack on the U.S. Capitol, many CEOs, companies, and trade associations responded by condemning the assault and calling for consequences for those responsible. A number of major corporations, including Marriott International, American Express, Dow Chemical, and AT&T, ended their political contributions to members of Congress who voted against the certification of the Electoral College votes. Dozens of other companies temporarily suspended all political contributions.
These statements and actions have been important. Amidst a broader, troubling trend of declining trust, the latest Edelman Trust Barometer shows business to be the most trusted of our major institutions — and the only one seen by a majority of Americans as both ethical and competent. The same survey revealed that 86 percent of Americans expect CEOs to speak out on social issues and highlighted the expectation among respondents that corporations should work with government to solve problems. Given Americans' generally favorable view of business, business leaders' unambiguous condemnation of the attack was a necessary affirmation of the election's legitimacy.
And yet it is deeply troubling that it took such a profound crisis for a critical mass of business leaders to express their concern about our broken politics and to condemn racist, anti-democratic actions. Paul Polman, former Unilever CEO and current chair of the B Team, said in the Harvard Business Review that CEOs "chose tax breaks and a booming stock market over ethical leadership," and concluded that "this silence — in the face of repeated assaults on common decency, respect and rule of law — helped to create an atmosphere that allowed the recent insurrection to occur."
This abdication of responsibility by business leaders is remarkable given the formidable political power corporations wield. And as large corporations in almost every industry have consolidated their market power, they have also assembled a formidable political advocacy infrastructure to protect and advance their commercial interests.
This power is overwhelmingly deployed to advance specific policies that advance individual companies' commercial interests, but often directly contradict companies' public commitments and stated aims on important social issues.
On climate change, many of the companies publicizing the steps they are taking to achieve net zero carbon emissions are contributing to the U.S. Chamber of Commerce, one of the strongest lobbies opposing major climate reform.
Even during the COVID pandemic, companies have been supporting organizations behind the scenes working to advance litigation designed to weaken unions, or have been engaged in outright union busting.
Such hypocrisy has to stop.
Investors increasingly are demanding greater transparency and accountability from corporations, as evidenced by demands from asset owners for companies to immediately stop funding treason, and by the growing number of shareholder resolutions concerning political spending and lobbying disclosure.
The American public is also demanding greater accountability from corporations with respect to their political activity. According to recent polling from JUST Capital, 78 percent of Americans favor requiring companies to publicly disclose all political donations, while a majority believe corporate political spending is harmful to democracy.
Collectively, these trends are changing the risk-reward calculus for corporations engaged in political activity. Indeed, this could be a moment when norms and standards of corporate political accountability actually shift. But for that to happen, philanthropy needs to be more strategically, deliberately, and forcefully involved in catalyzing the change we need.
First, foundations and family offices that have direct relationships with corporations should explore opportunities for direct engagement and dialogue with respect to corporate political accountability. Through their board members, endowment investments, and/or philanthropic partnerships, foundations can signal how important it is that the positive impact of corporate philanthropic engagement is not offset, undone, or undermined by corporate political activity working at cross-purposes to the public good.
Second, philanthropies can do more to support the advocacy organizations fighting for accountability in corporate political spending and lobbying. These organizations are often small and lightly funded but punch well above their weight and have been highly influential. Look at the impact that data from the Center for Responsive Politics has in the media, or the influence that Wharton and the Center for Political Accountability's Zicklin Index has had on incentivizing companies to voluntarily disclose their political spending.
Third, philanthropies can strengthen their focus on corporate political accountability in their programmatic work and across their influence strategies, from federal and state policy advocacy to grassroots power building. For example, the Action Center for Race in the Economy works with organizations leading local campaigns for racial, economic, and environmental justice. They use their in-depth research capabilities to investigate sources of corporate political influence and dark money in key policy fights and help those campaigns connect the dots between their issues and corporate and Wall Street actors who often operate out of sight.
Finally, the philanthropic community collectively needs to build stronger coalitions to address corporate political influence — coalitions that span different issue areas and deliberately ignore funding silos. Funders approach corporate political influence through multiple frames, including democracy reform, getting money out of politics, climate change, and racial and economic justice, among others.
Now is the time for funders to come together to explore how we can complement and reinforce each other's work and leverage this moment to drive real change in the relationship between big business and democracy.
Chris Jurgens is a director on Omidyar Network's Reimagining Capitalism team and leads a portfolio focused on how corporations and capital markets can contribute to a more inclusive capitalism.