The Wall Street Journal, February 18,
2003 original (by
The massive earthquake that killed thousands of people in
the Indian state of Gujarat two
years ago hit home in Silicon Valley, where Indian-born engineers
make up a sizable chunk of the work force. Technology companies
moved quickly to support the disaster-relief efforts.
Perhaps too quickly, some companies say now.
Cisco Systems Inc., Oracle Corp. and Sun Microsystems Inc.
have suspended matching grants to the India Development and
Relief Fund, of North Bethesda, Md., after receiving reports
from critics both here and in India that some of the money
may have gone to Hindu extremists linked to violence against
Muslims during bloody riots in Gujarat last year.
published in November by activists in Bombay, India, accuses
the IDRF of providing support to groups linked to
sectarian violence. Critics of the IDRF have been spearheaded
in the U.S. by the Campaign to Stop Funding Hate. "We
felt a lot of people did not know what they were giving money
to," says Shalini Gera, a spokeswoman for the loose-knit
group whose address is a post office box in Stanford, Calif.
which has raised more than $10 million since 1997, says
it funds only humanitarian relief and economic-development
projects in India. In denouncing the report, supporters of
the IDRF have attacked its critics variously as "leftists," communists," or "pan-Islamists" who
have little knowledge of IDRF's relief work. The accusations
are "falsehoods packaged by propagandists masquerading
citizens of the world," said Vijay Pallod, an IDRF spokesman.
Amid a murky political landscape of charge and counter-charge
about a charitable group's activities abroad, what are administrators
of corporate matching-gift programs supposed to do? Their
difficulties in sorting out the issue demonstrates the complexities
companies face in disbursing hundreds of millions of charitable
dollars each year.
"This has the potential to scare companies from doing
this as 'too controversial,' " says Rosalie Gann, who
directs Oracle's matching-gifts program. "There's no
way you want any kind of controversy around philanthropy
A survey in 2000 of more than 1,000 companies by the Council
for Advancement and Support of Education found that nearly
one-quarter of companies match gifts to any group with tax-exempt
status as determined by the Internal Revenue Service.
But an organization's tax status says little about its activities.
Benevolence International Foundation, based in Chicago, earned
tax-exempt status and qualified for matching funds from several
companies until the U.S. Treasury Department put it on its
list of terrorist-linked organizations last fall. The head
of Benevolence International, Enaam Arnaout, this month pleaded
guilty to defrauding donors by illegally buying boots and
uniforms for rebel fighters in Bosnia and Chechnya. (The
U.S. government dropped more serious charges that the charity
had funded Osama bin Laden's al-Qaeda organization.)
Microsoft Corp., which last year matched $19.8 million in
employee contributions, sent about $20,000 to Benevolence
International over several years, says Bruce Brooks, its
director of community affairs. Compaq, now part of Hewlett-Packard
Co., matched $2,400 in gifts to Benevolence International
between 1999 and 2001, an H-P spokeswoman said.
the IDRF, Microsoft has provided the group $55,000 since
1999. Microsoft hasn't moved to suspend the organization's
eligibility because it isn't explicitly political or religious,
says Mr. Brooks. "We have not gone down the path of
making value judgments about our employees' choices," he
feasible to investigate the activities of every organization,
says Roy Kaplan, president of JK Group Inc.,
a Princeton, N.J., service that runs matching-gift programs
for many corporations. "With matching gifts of $25 or
$35, how much can you invest in vetting that agency, versus
just making the donation?"
Mr. Kaplan, acknowledges, however, that some companies do
sometimes veto matching donations to some groups. Cisco,
for example, is among many companies that don't match gifts
to the Boy Scouts of America, citing their policy excluding
openly gay scouts and scoutmasters. Some companies block
gifts to Planned Parenthood to avoid any association with
abortion; some also block funds to antiabortion groups, Mr.
Kaplan says. Some companies won't match gifts to either the
National Rifle Association or to pro-gun
organizations say charities need closer scrutiny. "If
the only steps you're taking is to see whether they've been
given [nonprofit] status by the IRS and to see whether they're
on the terrorist list, you're not taking as many steps as
you probably should," says Kyle Waide, deputy director
of Charity Navigator, a nonprofit ranking service in Mahwah,
Charity Navigator (www.charitynavigator.org) lists more
than 2,100 charities but hasn't ranked IDRF because the group's
tax returns raised questions, Mr. Waide says. For example,
the group raised $3.8 million in 2001 while spending only
$15,000 on fund raising and incurring almost no other overhead
There may be an affiliate organization they have not named
that serves as the operating arm for that organization." he
for the IDRF says the group's overhead is low because it
is run by volunteers who pay their own expenses.
The spokesman also said, "We are very definite in our
response that we have never funded [organizations] that have
used funds for anything other than development and relief.
We are not religious. We are not a sectarian organization.
We are not in the business of spreading hate."
The Financial Times reported that the U.S. State Department
has referred the report alleging ties between the IDRF and
extremist Hindu groups to the Justice Department for investigation.
A State Department official confirmed the report has been
forwarded to the Justice Department for review.
over the IDRF has divided Indian employees in Silicon Valley.
Although Cisco has sent IDRF at least $70,000
since 1999, its own India-born employees reflect the split
over the IDRF debate. On the company's internal "Masala" e-mail
discussion list, some criticize the group's political links,
while one employee railed against "Indians trying [to]
block Indians helping Indians."
Shyam Palleti, an engineer who helped form Volunteers for
India Development and Empowerment, worries that suspension
of matching funds might harm future fund-raising efforts
for disaster relief in India.
when a cyclone caused major flooding, Cisco employees quickly
raised nearly $129,000, including company matching,
most of which went to the IDRF. When the earthquake struck
Gujarat in January 2001, Cisco employees quickly raised about
$750,000. Only a small amount went to IDRF because Mr. Palleti's
group had developed its own network of contacts in India,
though the IDRF remained a partner in the effort. "All
the money went to the right projects," Mr. Palleti says.
some employees who donated to the IDRF after the earthquake
back the company's decision to suspend matching
grants. Bhaskar Ghosh, a software developer, said he gave
$300. "Everybody assumed the money would go to the right
place," he says. But if the IDRF did back violence in
Gujarat, he says, "I don't want to support it and I
would be happy if my company doesn't support it."
Write to David Bank at email@example.com