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June 16, 2015

Activists: Walmart Used Charity to Buy Support for Stores

A coalition of community and labor groups filed a complaint with the Internal Revenue Service Monday accusing Walmart of channeling its philanthropy to win backing for its entry into several urban markets, The Washington Post and The New York Times report. More than a dozen organizations signed the complaint, which calls on the IRS to investigate the Walmart Foundation's tax-exempt status.

The activist groups say the foundation served the interests of its corporate parent by dramatically boosting giving to cities and neighborhoods as Walmart sought approval for new stores that generated contentious local debate. In one example they cite, the foundation gave Los Angeles organizations just over $200,000 in 2008 and 2009; $1.4 million in 2011, as plans for a store got unde rway; and $250,000 in 2013, after the outlet opened.

As a 501(c)(3) charity, the Walmart Foundation is barred from operating in the sole interest of private individuals or entities, and its funding guidelines forbid donations that "directly benefit Walmart Stores Inc." Spokeswoman Tricia Moriarty said the complaint "has no merit" and that the foundation gives for hunger, veterans, disaster aid, and other causes in "communities across the U.S. and around the world, not just to particular areas or cities."