Berkshire Gives Up On Giving How a pro-life housewife took on Warren Buffett.
By Nicholas Varchaver

(FORTUNE Magazine) – Warren Buffett has drawn criticism in the past for supporting pro-choice causes, but it never affected Berkshire Hathaway's charitable giving--that is, until Cindy Coughlon, a 34-year-old stay-at-home mom in Peoria, Ariz., came along. Now, as a result of her campaign against pro-choice donations, the most powerful man in business (see Cover Story) has terminated Berkshire's entire contribution program, which distributed nearly $200 million over the past two decades to institutions ranging from schools to groups on either side of the abortion debate.

The unusual program--call it a charitable dividend--allowed Berkshire shareholders to designate $18 per share annually for up to three charities of their choosing. Some shareholders, including Buffett via his foundation, used the mechanism to give to pro-choice causes such as Planned Parenthood. (FORTUNE editor at large Carol Loomis is a director of the Buffett Foundation.)

The events were set in motion this winter by Coughlon, a mother of three who wanted to earn some money by selling for the Pampered Chef, a recent Berkshire acquisition with $740 million in revenues. Some 70,000 freelance "consultants" sell kitchen wares through Tupperware-style parties in people's homes. Coughlon says she was drawn to the Pampered Chef because she felt it shares her Christian, pro-family values. The company's mission statement, for example, encourages people to "develop their God-given talents."

But Coughlon was dismayed to learn that Berkshire's purchase of the Pampered Chef meant that some portion of the profits she'd generate could fund pro-choice groups. She e-mailed a petition, which asked Berkshire and Buffett to end donations to such organizations, to 100 friends and family in January. Pro-life organizations such as Life Decisions International began publicizing it.

Pampered Chef chairman Doris Christopher initially told consultants in an April e-mail that though "my personal views on some issues differ from Warren Buffett' is not my place to ask or to judge." But her message didn't quell the furor. Consultants were resigning, says Coughlon, and customers complaining. (Coughlon numbers the petitioners at "less than a thousand.") By late June the pressure had become intolerable, and Christopher "went to Warren with a heavy heart," according to an e-mail she wrote to consultants. "It troubled him deeply that charitable donations from Berkshire Hathaway were causing you difficulty." On July 3, Berkshire announced the end of the charity program.

Before this year, Berkshire seemed impervious to such pressures. Pro-life activists had picketed its annual meetings and boycotted it for years. Last year a shareholder resolution to cancel the charity program was soundly defeated, with 97% of shares voted against it. And Buffett defended the program in Berkshire's 2001 annual report, saying Berkshire makes "no contributions except those designated by shareholders," who "are probably on both sides of the abortion issue in roughly the same proportion as the American population."

So why did Berkshire abandon the program now? The company's announcement said that "its ownership is now harming" not only a subsidiary, but also individuals. The board was willing to accept some damage from boycotts in the past because the cost was diffused across a giant corporation, but this was affecting Pampered Chef consultants, who had nothing to do with Berkshire's policy.

For her part, Coughlon is "just delighted with the decision." But she says she won't be satisfied until the man she deferentially refers to as "Mr. Buffett" stops donating to pro-choice causes. "Now," she says, "the focus is on him." --Nicholas Varchaver