McDonald's Accused of Being Cheap Toward Its Charitable Arm

PHOTO: A Ronald McDonald statue sits on the porch of the Ronald McDonald House, in Chicago, Illinois on November 15, 2011.

McDonald's is defending its support of the Ronald McDonald House Charities (RMHC) and firing back after an advocacy group criticized the fast-food giant, claiming it short-changes the nonprofit while reaping all the marketing benefits for the corporation.

Corporate Accountability International, an advocacy group that brought a 9-year old to the company's annual shareholder's meeting in May to criticize the CEO for marketing toward children, released a report on Tuesday called "Clowning Around With Charity: How McDonald's Exploits Philanthropy and Targets Children."

RMHC provides housing for families of seriously ill children receiving hospital treatment.

The report criticizes McDonald's for reportedly supporting only 20 percent of the nonprofit's funding while customers allegedly contribute as much as 1.5 times more to the charitable organization than McDonald's does itself. Other sources of funding are corporate donors and smaller donors. The corporation's philanthropic giving is 33 percent lower than other "leading corporations," the report says, while it spent almost 25 times as much on advertising as it did on charitable donations in 2011.

Doug White, who teaches at Columbia University's School of Continuing Education and the author of books on giving and nonprofits, said the general question of how much of a company's profits goes to its charitable arm is a "valid" one.

"It's a good question to ask," White said of any corporation. "If you're going to get all the publicity from it, why isn't it putting more money into its charity?"

Bridget Coffing, senior vice president of McDonald's Corporate Relations, fired back at the report in a statement.

"This 'report' is shameful and misleading," Coffing said. "We hesitate to even dignify it with a comment, but that would be a disservice to the McDonald's employees, franchisees, suppliers and customers who have partnered tirelessly to support the tremendous work of Ronald McDonald House Charities (RMHC). This is a thinly-veiled attack on our brand at the expense of the millions of families and organizations who have benefitted from RMHC. McDonald's categorically rejects this self-serving and biased document and stands proud of the significant financial support and volunteer hours we have and will continue to provide to RMHC and other charities worldwide."

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