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Private Companies And Social Change

Dick's Sporting Goods exterior
photo by Mike Mozart

Companies that are dropping special privileges for National Rifle Association members are responding to calls for social change. But our country has a long history of the private sector proactively encouraging such change, especially in the face of political gridlock.

In the weeks since the shooting at a Parkland, Florida high school, a social media campaign has gathered steam. Individuals who oppose the NRA’s message have threatened to boycott companies that offer discounts to the association’s members or maintain other financial ties to the organization. As a result, a variety of businesses including banks, car rental companies and airlines, have abruptly cut ties with the NRA, ending promotional or discount programs for the organization’s members.

Dick’s Sporting Goods went a step further in its reaction to Parkland and its aftermath. The retailer announced that it would stop selling assault-style rifles of any kind and would no longer sell any sort of firearm to a customer under age 21. Later the same day, Walmart said it would follow suit on restricting sales by age and that it would no longer sell toys or other items resembling assault-style rifles. (Walmart had previously stopped selling high-powered rifles in 2015, citing low customer demand for such weapons.) L.L. Bean also raised its minimum age to purchase firearms shortly after.

“We’re staunch supporters of the Second Amendment,” said Dick’s CEO Richard Stack in discussing his company’s new policy. “I’m a gun owner myself. We’ve just decided that based on what’s happened and with these guns, we don’t want to be part of this story.”

Of course, reacting to social pressure from purely business motives can be challenging when your customers span the political spectrum. As more than one journalist has noted, companies with pre-existing ties to the NRA or firearms sales have no real neutral option in the current climate. While many customers praised companies ending such programs, just as many took to social media to say they would take their business elsewhere.

Delta Air Lines found that even attempting neutrality offered little protection from blowback. The carrier notified the NRA that it would drop a contract offering discounted fares to members traveling to the organization’s annual meeting. Simultaneously, the airline released a statement explaining “Delta’s decision reflects the airline’s neutral status in the current national debate over gun control amid recent school shootings,” and added, “Delta continues to support the 2nd Amendment.” Gun control advocates largely found this good enough, but many opponents were vocally outraged. Casey Cagle, Georgia’s lieutenant governor, threatened to kill proposed state legislation that would benefit Delta unless the company changed course. As of this writing, Delta has not responded.

FedEx took a different run at playing the middle. It released a statement saying it disagreed with the NRA’s position on civilian ownership of assault rifles but would continue offering discounts to NRA members. “We are very clear that, when we set pricing strategy or look to adjust pricing, it is not based on political positions or points of view,” Patrick Fitzgerald, FedEx’s senior vice president, said in an interview.

Parkland is not the first tragedy to inspire private sector action in this arena, even if the scale is new. In 2012, after the shooting at Sandy Hook Elementary School, California Public Employees’ Retirement System (better known as CalPERS) divested its stakes in gun manufacturers; California’s teachers pension fund did the same. (Investment giant BlackRock Inc. recently said it is exploring ways let clients avoid gun companies in their portfolios if they wish to do so.) After last October’s Las Vegas shooting, Walmart elected to stop selling bump stocks, a firearm accessory used in that attack.

Private companies have a right to make or break agreements with organizations like the NRA, or to sell or not sell whatever goods they choose. What is interesting is observing how the corporate sector reacts to divisive social issues. Gun control is hardly the first.

Consumer activism on social media is nothing new. The protracted fight about the Dakota Access Pipeline involved online calls for boycotts against banks that provided loans to the companies responsible for building the pipeline. Social media calls to #DeleteUber resounded in early 2017 after Uber – inadvertently or otherwise – appeared to be breaking a strike by New York Taxi Workers in support of a major protest against President Trump’s proposed travel ban at John F Kennedy International Airport.

Long before social media as we know it today, though, companies took a direct hand in creating social impact, rather than simply reacting to outside pressure.

Gilded Age philanthropists such as Andrew Carnegie and John D. Rockefeller often engaged in social change which, if not directly done through their businesses, was certainly funded by their success in private enterprise. These businessmen contributed to biomedical research, historical preservation, and the arts, among many other fields, and created a model for using private wealth to achieve public good that we see reflected today in the actions of business leaders like Bill and Melinda Gates.

Sometimes, however, the push toward social change comes even more directly from companies themselves. The Village Voice was the first employer in the United States to offer domestic partner benefits to same-sex couples back in 1982, decades before same-sex marriage became legal nationwide. Companies including Apple, Nike, Gap and Disney followed suit throughout the 1990s. Disney has been among the companies publicly speaking in support of same-sex couples several times since, including its participation in an anti-DOMA amicus brief and its threat to halt filming in Georgia if the state passed a bill critics said would promote anti-LGBTQ discrimination. (The governor ultimately vetoed that legislation.)

Recently private businesses have looked to enter the realm of health care. Amazon, Berkshire Hathaway and JPMorgan Chase announced earlier this year that they would partner to launch an independent operation designed to simplify health care and reduce costs for their employees. Whether this effort will succeed remains to be seen, but it seems at least in part a response to ongoing government gridlock.

Businesses have also pushed back against government action directly with boycotts of their own. North Carolina’s law restricting transgender people’s access to public bathrooms led major businesses such as PayPal to reverse plans to expand in the state; the NCAA withdrew tournament games and the National Basketball Association All-Star game. The loss of hundreds of millions of dollars in combination with a reputational hit led North Carolina to at least partially repeal the law. Indiana’s Religious Freedom Restoration Act, signed by then-Gov. Mike Pence, cost the state an estimated $60 million in lost convention bookings. (Ironically, Indianapolis took the brunt of this economic hit despite the fact that then-Mayor Greg Ballard had publicly called for the law’s repeal.) That law was subsequently amended.

The NRA is unlikely to change course based on the loss of a few discount programs. The organization said as much in a statement reacting to the #BoycottTheNRA movement. But the movement, and actions like those of Dick’s and Walmart, may illustrate to a variety of observers that the issue matters deeply to shoppers – and to voters. A recent CNN poll found that support for stricter gun laws than those currently in place has spiked to its highest level since 1993, including a majority of respondents who live in gun-owning households.

We have strong protections for speech in this country, corporate as well as individual. Corporations, like individuals, must live with the consequences of speaking out, whether positive or negative (or, more often, a mix of both). But in an environment where political gridlock is the status quo, the private sector can respond to, and even shape, a changing social landscape in unique and sometimes powerful ways.

If you enjoyed this article, be sure to check out Palisades Hudson’s book, Looking Ahead: Life, Family, Wealth and Business After 55, now available in paperback and as an e-book.

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