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Wednesday, October 30, 2013

McDonald’s Strategic Use of Its Charity: Clowning around with Ethics?

Corporations have undoubtedly oriented their philanthropy to take advantage of the potential synergy with marketing their products and services. This “revelation” should not surprise anyone in modernity. Even so, overdoing any convergence to maximize profits is certainly open to ethical critique, even if leaning excessively on strategic interest at the expense of reputational capital is perfectly legal. This point ought to impress itself on the frontal lobe of any dean who hires lawyers to teach business ethics. In this essay, I focus on McDonald’s funding of its own charitable organization, McDonald House Charities. Has the corporation’s financial contribution been sufficient, ethically speaking, to justify the resulting reputational capital, marketing synergies, and long-term profitability?
In late October 2013, Corporate Accountability International and The Small Planet Fund came out with a 30-page report accusing McDonald’s of using its own charity as a branding device for the food products. Specifically, the report claims that McDonald’s reaps all of the “branded benefit” from the charity while contributing only about 20% of the money. At the time, the corporation was contributing only $5.3 million to $10 million to its namesake global charity. Meanwhile, the “reputational cost” to the company does not seem to have registered with the management.
From an ethical perspective, to link charity, the root word caritas meaning higher human love, with such an encroachment by self-interest is bound to stir a general recognition of hypocrisy. “McDonald’s giving does not match its rhetoric,” Michele Simon, a public health lawyer and author of the report, said. The hitherto accrued reputational capital associated with “McDonald’s” was suddenly on the chopping block. By linking the ubiquitous symbol of McDonald’s, the clown Ronald McDonald, to the charity, “McDonald’s gains an emotionally loaded marketing vehicle while shielding itself from critics,” the report concludes. Who would criticize the company for having established an organization that provides temporary housing for family members of hospitalized children? Yet anyone who has seen Cameron’s film, Titanic, grimaced as the rich son of a Steel magnate grabs a small girl (as though his own) in order to gain access to a life boat. McDonald’s has been grabbing not just children, but sick ones!
Abstractly, caritas, used by Leibniz in caritas naturalis seu benevolentia universalis (natural love, that is, universal benevolence), allows for some self-love as the love is natural rather than divine. Even so, an influx of excessive self-interest premised on narcissism can easily pierce and deflate the entire phrase as a viable theory of justice. A sordid sense of the underlying greedy mentality naturally results. Hence, reputational capital is “withdrawn.” Over-reaching is itself “emotionally loaded,” such that a virtue ethics is part of the ethical judgment.
Lest it not be forgotten, however, corporations are organizational abstractions designed like sharks to be feeding machines. Furthermore, to ask a board of directors or management to disregard their fiduciary duty to the property-owners, the stock holders, in favor of giving cash away with only a hazy long-term financial impact by means of some reputational capital accrued is unethical in deontological terms (i.e., in terms of duty). Even so, a company’s stockholders realizing their property rights can legitimately (and ethically) order the board to direct management to give money to a cause even though it bears little or no relation to the company’s strategic interest.
Even so, over-reaching in a duplicitous and mendacious way, such as by McDonald’s board and management, is never pretty. Hence the noxious odor of a squalid character-type is bound to rise to the discomfort of the gods on Mount Olympus. They are not depicted as always ethical, however, so here the indictment must surely come from ethics itself. Yet as Nietzsche points out, it can hardly be immoral for the weak to act contrary to weakness, for that is how they are constituted. To be other than what one is can hardly be an obligation. Perhaps our normative expectations regarding corporations need to be scaled back to account what they are in themselves. This is not to say that McDonald’s has not surpassed the nature, design, and purpose of a corporation, just as a mortal sin is not dismissed simply because human nature is what it is. The reference point here is the abstract nature of what a corporation is, to which corporate conduct can either surpass or fall short.


Bruce Horovitz, “McDonald’s Grilled Over its Charity,” USA Today, October 30, 2013.