Posted: September 13th, 2017

Charity to Scouts

Charity to Scouts

Case 5.5 Charity to Scouts?
“ I don’t care what Bank of America does,” fumed Lynn Martin at a meeting of the board of directors of

Baytown Company, a San Francisco Bay Area firm that runs four different family- oriented restaurants

and owns a string of six popular fast- food take- out establishments ( called “ Tip- Top”). “ We took a

principled stand at the time,” she con-tinued, “ and I don’t think there’s enough evidence to justify

changing our minds now.” Like a lot of local companies, Baytown supports various charitable causes in

the Bay Area. The company has always figured that it had an obligation to give back more to the com-

munity than good food; besides, people in the Bay Area expect local companies to display a sense of

social responsibility. Among the groups that Baytown has always helped support is the regional Boy

Scouts district. Not only did Baytown think the Scouts worthy of its corporate help, but giving to the

organiza-tion seemed to fit well with Tip- Top’s all- American theme and with the family character of

Baytown’s other restaurants. A simple thing suddenly got complicated, however, when the San Francisco

Bay Area United Way decided to pull $ 1 million in annual funding for the Scouts because of the group’s

refusal to admit gays. Soon after that, Bank of America, Wells Fargo Bank, and Levi Strauss & Co. also

decided to stop funding the Boy Scouts. A month later, Baytown’s directors resolved to follow suit. “ We

were pretty clear at the time,” continued Martin, “ that we didn’t have any business supporting an

organization that was perceived as discriminatory.” “ Not me,” said Tom Boyd. “ I always thought that

since the Boy Scouts are a private group, they can do whatever they want.” “ Well, maybe they have a

right to discriminate if they want, but that’s not the point,” said Ed Framers. “ The rest of us agreed

with Lynn that as a company we shouldn’t be help-ing a group that discriminates. Of course, that was

before everybody around the country started making such a fuss about companies’ stopping their

funding of the Scouts. We all know about those anti- gay groups demonstrating against the United Way

and threatening to boycott the bank.” “ Those groups hardly represent thinking in the Bay Area,” Lynn

Martin shot back. “ That’s true,” agreed Scott Arming, “ but still we run a family- oriented business.” “

What’s that supposed to mean? Do you think gays and lesbians don’t come to our restaurants? Do you

think they don’t have families? Do you think—” “ O. K., O. K.,” Arming interjected. “ Lynn’s right about

that,” Ed Framers said. “ In fact, as far as I know, our customers never said much about it, one way or the

other.” Executive Director Susan Lee then spoke up: “ Well, I got a few phone calls about it, but there

weren’t really com-plaints. It was more people wanting to get more informa-tion about the situation. Of

course, you always get a few cranks. . . .” “ Ain’t that the truth,” murmured Boyd to Framers. “ Anyway,”

Lee continued, “ things are different now. Bank of America has reversed its decision and is resuming

funding to the Boy Scouts because the Scouts have lifted their ban on gays.” “ That’s what the bank

says,” said Lynn Martin. “ But the whole thing is pretty murky if you ask me. Here, look at the newspaper

story. The article reports company spokesman Peter Magnani as explaining that the bank had first

interpreted the Scouts membership policy as banning gay members. But after consulting with Boy

Scouts national President John Clendenin, the organization clarified its policy and ‘ made it clear’ that

membership is open to all boys who subscribe to Scouting oaths and laws. ‘ We take that to mean all

boys, regardless of their sexual orientation,’ said Magnani. 86 “ But then,” Martin continued, “ the

newspaper goes on to quote a spokesperson for the Boy Scouts of America as saying that there has

been ‘ absolutely no change in our policy. We do not believe that homosexu-als provide positive role

models.’ What are we supposed to make of that? It looks as if the bank is trying to wrig-gle out of a

stand that turned out not to be as popular as it thought it would be.” “ That sounds pretty cynical,” Ed

Framers said. “ The bank says here that its decision ‘ was based solely on the Scouts’ clarification of its

policy,’ and the Scouts’ national president is quoted as saying that the organization is ‘ open to all boys

as long as they subscribe to the Boy Scouts Oath and Law.’ You weren’t a Scout, Lynn, but I was, and the

oath and law are only basic stuff about trustworthiness and honesty; there’s nothing about sexuality.

Besides we’re talking about boys, not adults. I think the whole thing has been blown out of proportion.”

Martin quickly responded, “ Don’t you think boys have sexual feelings? Come on, Ed, give me a break.

And besides, if there is nothing in the Scout oath or whatever it is about sexuality, why does the

organization have to take a stand one way or the other?” “ Maybe the Scouts shouldn’t have taken a

stand,” Susan Lee inserted, “ but at this point it looks as if we have to. When we stopped giving to the

Scouts, that sent one message; if we reverse our decision now, that sends another. Frankly, I don’t like

being in the position of having to impose our values, one way or the other.” “ Yes, but you yourself said

that there’s no way to avoid it,” Lynn Martin shot back. “ So we should at least stand behind the right

values.” “ And what are those?” asked Lee. “ I don’t have the slightest idea myself,” Tom Boyd whis-

pered to Scott Arming. Arming ignored him as he turned to the group: “ You know, I think we are and

should continue to be a socially responsi-ble company. But maybe we should reconsider whether being

socially responsible means giving to charitable causes in the
first place. Is that something we are truly obligated to do, or are we just following a fad? I mean, I hate

to bring up the ­bottom line, but every dollar we give to the Boy Scouts or anybody else is one less

dollar for the company and its stockholders.” “ Come on, Scott, you know it’s not as simple as that,”

responded Susan Lee. “ Charitable contributions bring us good will, and it’s the kind of thing the

community expects an enlightened company to do.” “ You may not be persuaded, Scott,” Ed Framers

added, “ but I think what Susan says is right. In any case, we don’t need a debate about general

principles. We need to figure out what we are going to do about the Boy Scouts.” The meeting continued

. . .

Discussion Questions
1. What do you think Baytown should do? Explain your reasoning. What business factors are relevant to

your decision? What moral factors?
2. Are Baytown’s directors operating with a broad or a ­narrow conception of corporate responsibility?
3. Were Baytown and the other companies right to have withdrawn their support from the Boy Scouts?

Is there anything wrong with companies’ attempting to influence the policies of an organization like the

Scouts?
4. What do you think explains Bank of America’s policy reversal? Is Lynn Martin’s cynicism warranted?
5. Scott Arming doubts that businesses have an obligation to support charitable organizations. Do

they?

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