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Published: June 2008

Study finds racial and economic bias in Western Union practices

A study commissioned by the Transnational Institute for Grassroots Research and Action (TIGRA) has found evidence of extensive bias in Western Union’s corporate practices and the Western Union Foundation’s giving practices. The study found inequitable distribution of corporate largess based on race, income, and immigration status.

Download a copy of the report 'Profiting from Black & Brown Dollars: The Racial Dimension of Western Union's Corporate Practices'

Summary and Key Findings

After extensive research of Western Union’s corporate practices and the Western Union Foundation’s giving practices, we determined that there is clear evidence of an inequitable distribution of corporate largess based on race, income, and immigration status.

The racial dimension of Western Union’s practices is clearly illustrated by the significantly higher concentrations of Western Union agents in areas with a higher percentage of foreign-born and low-income residents. While Western Union derives its profits from these communities, the Western Union Foundation provides most of its grants outside these communities.

We concluded that the overall giving practices of the Western Union Foundation illustrate a clear imbalance between Western Union’s source of profit and the grant recipients of the Foundation.

While Colorado received half of the grants from the Western Union Foundation, Colorado represents only one percent of the remittance industry. In comparison; California, Illinois, Florida and New Jersey combined constitute almost half of the remittance industry in the nation. However, the Western Union Foundation gave these states an equivalent of $0.15 for every dollar they gave.

This initial analysis provides us with an overview of Western Union’s corporate giving, but we went further to analyze how their current giving impacts the communities they profit from. By looking at four categories, we broke down the recipients for 2004-2006 and evaluated each one to determine where they fit.

This brings us to our second key finding which concludes that while all the grant recipients of the Western Union Foundation are doing good work, the vast majority of recipients are institutions whose priorities are not determined by immigrants and their communities. These institutions are not typically based in immigrant communities, and immigrants largely do not use nor can they afford the services provided.

Several examples of such organizations would include the March of Dimes, American Red Cross, and United Way. In 2006, the Western Union Foundation gave a $100,000 grant to the March of Dimes chapter in Texas and a $60,000 grant to the chapter in Puerto Rico. In the same year, the Foundation also gave over $128,000 to the American Red Cross Headquarters in New York and over $448,000 to The United Way of America.

Also, we found a significant portion of recipients that would be classified as “Fine Arts” organizations. One example is the Great Orchestra of Christmas Charity Foundation in Poland, which received three separate grants in 2006, totaling over $36,000.

While we applaud the charitable work done by these organizations, we must understand the importance in providing corporate giving to immigrant-serving organizations in areas where Western Union profits.

Based on a survey of Oakland immigrants in 2006, it was determined that the most desired services included child care, English classes and transportation subsidies. Between 2004 and 2006, the Western Union Foundation gave 683 grants, and only seven recipients provide ESL and limited child care services. This further illustrates the disconnect between priorities of immigrant communities and the Foundation’s giving practices.

Finally, we conducted a comparative case study of Omaha, Nebraska and Oakland, California. We found that while these two cities have almost the same population, Oakland has four times more Western Union agents and immigrants than Omaha. At the same time, the Western Union Foundation gave only one grant to Oakland between 2001 and 2006, while there were 108 grant recipients in Omaha during that same time.

What we propose

Based on our findings, we propose that Western Union adopt a genuine community reinvestment framework as explained in the proposed Shareholder’s Resolution (included in full report). We also encourage Western Union to apply an impact study of its grant-making based on race, income and immigration status.

The Western Union Foundation’s giving principles must ensure their recipients have:

    * A community-focused mission
    * Community determined priorities and programs
    * Long term commitments to building social capital in the communities Western Union benefits from

By adopting these recommendations, Western Union can significantly address the racial inequity brought about by its corporate practices and philanthropic grant-making.

Sources and Methodology

Sources

In order to determine the Western Union Foundation’s grant recipients, their location and amount of giving, we used the Western Union Foundation’s annual reports for 2001-2003 and 990 Tax Forms for 2004-2006. We were unable to use the 990s for the first half since they were not accessible.

In our data reflecting remittances sent from the United States to Latin America, we used the report “Sending Money Home” by the Multilateral Investment Fund, with survey research done by Bendixen and Associates. Beyond this data, we also included TIGRA’s own research that was conducted in Oakland in 2006 entitled “Building a Million Dollar Club.”

Methodology

We wanted to first look at the big picture and began our study with two key aspects; (1)percent of total remittances sent from the US to Latin America by state and (2)percent of Western Union Foundation grant recipients by state.

Following this analysis, we developed a comparative case study between Oakland and Omaha, to determine how these two cities compare with respect to demographics, Western Union agent density, and recipients of the Western Union Foundation.

Our final analysis involved researching the various Foundation recipients, focusing on 2004-2006. We developed four categories in order to determine how the Foundation typically awarded grants. The first category is “Fine Arts,” as defined by recipients whose primary mission is related to high culture, such as Opera, Theatre, etc.

The second category, “Educational Institutions,” refers to recipients that are primary, secondary or higher education systems, including public and private institutions.

In our third category, “Immigrant-Serving Organizations”, we included recipients whose mission and goals are to serve and empower immigrant communities in the United States. These organizations’ priorities are to serve immigrant communities.

In our final category, “Institutions,” we included government-affiliated organizations, advocacy and research groups, foundations, and health services.

For More Information

Transnational Institute for Grassroots Research and Action (TIGRA)

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