Mukit Hossain never expected his charity work to impede his business career. For months he spent his days trying to launch a new Internet phone company, and his nights trying to raise support to build centers for day laborers in Herndon.
But when his name started popping up in newspapers as an advocate of the day laborers, the venture capital firm that was about to invest $1.5 million in his start-up company suddenly backed out of the deal, he said.
"I was very surprised," Hossain said. "They [implied] my involvement with the day laborer issue was not terribly good for business."
Hossain's experience -- along with those of corporations such as Microsoft Inc., which took heat when it withdrew its endorsement of a gay rights bill in Washington state, and The Washington Post Co., which was criticized for its initial sponsorship of a Pentagon-backed Freedom Walk -- reflects the increasing scrutiny businesses and their leaders are facing for the social causes and philanthropies they choose to support.
Corporate giving experts say that more than ever before, companies are being forced to weigh the political correctness of each social issue or charitable effort they take on. And those that make waves with their causes -- intentionally or not -- can quickly find themselves in the center of an unflattering spotlight that could affect their bottom lines.
The shift has also forced organizations that back issues with any hint of controversy -- from gay rights to the promotion of condom use -- to alter their approach to fundraising.
"In the last five or six years, there's been a sharper focus on contributions that apply to the interest of the business -- many corporations now have a philosophy of, 'When in doubt, leave it out,' " said Curt Weeden, president of the Association for Corporate Contributions Professionals.
Weeden said the heightened sensitivity on corporate causes dates to the early 1990s, when AT&T Corp. came under fire from conservative groups for its support of Planned Parenthood. The company first amended its relationship with the organization and then ended it altogether. The rise of the Internet exacerbated the scrutiny, experts say, as bloggers and Web sites began to publicly track corporate contributions, offering millions of people a new platform for protests.
The shift prompted the creation of a new cottage industry of philanthropic consulting firms that aim to help companies devise giving programs that can further the company's goals and avoid controversy.
Eric Kessler founded District-based Arabella Philanthropic Investment Advisors LLC last year to help families with foundations distribute their money wisely. But he found he was increasingly called on to help corporations do the same.
"They want to pass the 'front page test,' as I call it," Kessler said. "The last thing they want is to find out that they're giving to an organization that's getting in trouble."
Kessler says his firm does research on nonprofits the same way a mutual fund would investigate a potential investment -- evaluating the strength of the management team, its fiscal controls and the efficacy of the organization. It also looks for any signs of trouble that could lead to negative press.
CreateHope Inc., also of the District, provides a similar service through its Web-based software. The six-year-old firm started out with technology intended to simply automate the paperwork generated by corporate matching and volunteer programs. In response to customer concerns about the risks associated with donating to a large variety of firms, CreateHope added another layer to its software that checks organizations against anti-money-laundering and terror watch lists.
"It's hard to know the full dynamic of who you're giving to and what they're doing with the money," said Adam Goozh, CreateHope's chief executive. "This is basically a risk assessment."
Cone Inc., a 25-year-old consulting firm in Boston, was established to help companies pick causes that are aligned with their corporate missions, but in recent years there has been a growing emphasis on simply staying out of trouble, said Carol Cone, chief executive.
What companies want least, Cone and others say, is for their sponsorships to generate negative publicity that might drive away consumers.
Last month American Girl Inc., a Middleton, Wis., company that makes a popular line of dolls, became the target of a protest by a conservative group for its support of Girls Inc., a nonprofit organization that supports the empowerment of girls. The group, American Family Association, is threatening to launch a boycott because Girls Inc., it claims, is "pro-abortion, pro-lesbian."
In response, the company issued a statement expressing disappointment that the group had "chosen to misconstrue American Girl's purely altruistic efforts and turn them into a broader political statement on issues that we, as a corporation, have no position."
The Washington Post Co. found itself at the center of controversy earlier this year when it agreed to co-sponsor a Sept. 11 memorial event organized by the Department of Defense. Critics said the Freedom Walk would have a pro-war slant and cause readers to question the paper's objectivity -- and called for the company to withdraw its support. A spokesman for The Post pointed out that "there is a clear separation between the business and news sides of the newspaper." Nonetheless, the company did withdraw support in mid-August, instead opting to make a contribution to the Pentagon Memorial Fund.
Microsoft, long seen as progressive in its social policies, faced similar criticism in April when it withdrew support from a bill in Washington state that would have made discrimination against gays and lesbians in employment, insurance and housing illegal. Although the company denied it, detractors said the software giant succumbed to pressure from religious conservatives.
Some companies have come under fire for donations to organizations not even chosen by their corporate giving officers. In 2002, companies such as Cisco Systems Inc., Sun Microsystems Inc. and Hewlett-Packard Co. were slammed for matching employee contributions to the India Development and Relief Fund, a North Bethesda group accused of funding Hindu extremists. Cisco gave $70,000 to IDRF but later suspended its donations to the group.
Cisco's matching program was already under review when the allegations about IDRF came to light, according to Abby Smith, a spokeswoman for the networking equipment giant. Today the company has much tighter controls over its donations, she said, and nonprofit organizations must go through several levels of corporate approval before qualifying to receive funds from Cisco.
Even as some companies were experiencing the downside of social involvement, a broader realization emerged that strategic -- and uncontroversial -- giving programs can benefit a corporation's bottom line. All things being equal, about 86 percent of consumers say they chose to buy from companies known to support a cause, according to a study by Cone Inc.
As a result, companies are increasingly focused on charities that resonate with their consumer base rather than causes that are near and dear to the hearts of executives.
"They tend to support the favorite charities of the people they want to influence," said Daniel Borochoff, president of the American Institute of Philanthropy. "You're not going to find a cereal company supporting a leprosy organization -- just because it's not going to look good on a cereal box."
So while breast cancer is a popular cause for all types of companies, Borochoff said, rectal cancer is embraced far less widely because it's "harder to sell" to consumers.
The shift has caused some organizations that back controversial causes to alter their fundraising strategies, Borochoff and others say. Rather than solicit donations from corporations -- which makes up only about 5 percent of all charitable giving -- they direct their efforts to wealthy executives who may be sympathetic to their cause.
Planned Parenthood does very little outreach to public companies, said Francine Stein, the organization's vice president of development, and relies instead on contributions from foundations and individuals.
"There is a kind of stealth approach to this now, from organizations that catch small groups by surprise and threaten boycott and test the charitable will of businesses," Stein said. "I am sorry that corporate executives have to put up with it. It makes no sense."
But experts say fundraisers and corporate giving officers will just have to learn to live with the new level of scrutiny, because it is unlikely to change anytime soon.
As for Hossain, who also runs an organization that feeds homeless people in Fairfax County, he's still looking for start-up funding for his Internet phone company, WaveRelay, to replace the investors who backed out. And while it may have caused a significant setback to his business, Hossain says he doesn't regret his involvement with the Herndon day laborer issue.
"I think one has to do what one thinks is right," he said. "Just because there might be some unfair or unexpected problems associated with it doesn't mean you give up and go away."