Target changes political donations policy after controversy


Retail giant Target Corp., which last summer sparked a customer and shareholder backlash over corporate donations to a controversial conservative political group, has quietly issued a new policy to tighten oversight and restrict how the company’s funds are used for political purposes.

The move highlighted the risk of controversy that has accompanied the growing practice of using corporate funds to influence the political process, both in election campaigns and government policy issues.

Target had donated $150,000 to a nonprofit group called MN Forward, which backed a gubernatorial candidate in Minnesota who opposed gay rights. The company, which was lauded in the past by gay rights advocates for its stance on gay and lesbian issues, faced angry customers and calls for boycotts. The issue sparked a shareholder resolution asking the company to overhaul its political donation policies.


“This is definitely a trend,” said Tim Smith, a senior vice president at Walden Asset Management, one of the firms that filed the shareholder resolution. “More and more companies are stepping up and being transparent about their political spending.”

But Smith, while calling it a “step forward,” noted that Target did not give shareholders everything they were seeking. “They still are not disclosing the amounts of money they pay to trade associations,” he said.

Target spokeswoman Jessica Carlson would not comment on the new policy. But she said the company has created a committee to oversee corporate political giving. According to the policy document, the committee will “guide the decision-making process regarding financial support of political activities.”

Companies are not required by law to report the amount they pay in dues to trade associations or the portion of dues that fund political purposes. Some companies, often at the urging of shareholders, have policies that require them to disclose that information; Target’s new policy does not.

But Target’s new the policy requires the company to prohibit trade groups from using Target contributions to support candidates or to influence elections or ballot initiatives.

“This is at least one more company going on record expressing their preference to be kept out of that line of political spending,” said Shelley Alpern, vice president at Trillium Asset Management Corp., one of the investors that led the push for more transparency at Target.


But Alpern also noted that the company is not posting all of its corporate political donations. Companies are prohibited from making direct contributions to candidates for federal office, but many states allow contributions to candidates for state office.

Target will report on its website only corporate contributions of more than $5,000. only report corporate contributions over $5,000 on its website.

Some companies, such as pharmaceutical giant Pfizer, post regular reports detailing corporate contributions as low as $100.

All companies are required to report to state regulatory agencies contributions they make to state candidates and campaigns, but those reports are not easily accessed by shareholders or the public.