In the last few months The Home Depot, has made a giant right turn in its charitable endeavors and landed in bed with Habitat for Humanity in a five-year, $30 million sponsorship deal, a little more than a year after CEO Frank Blake got his job. It’s a familiar place for Blake, whose wife, Mrs. Liz Blake is a Senior Vice President at Habitat for Humanity.Mr. and Mrs. Blake told the Atlanta Journal Constitution that they recused themselves in the negotiations between the two parties. I’m sure they did. And to be completely accurate, the relationship is actually between The Home Depot Foundation, which is a 501(c)(3), and Habitat for Humanity. Moreover Mr. Blake doesn’t hold a position on the Foundation’s 10-member board which consists entirely of Home Depot employees; I counted one executive vice president, three senior vice presidents, and six lesser lights.
But to be frank, a CEO doesn’t need to have a vote to influence how the vote turns out on a board where everyone, in effect, works for him or her.
What’s the big deal, you say? After all, Habitat for Humanity is a well-respected charity with a mission to build decent shelter for the poor. Since 1976 they've built 250,000 homes that shelter 1 million people. And there’s a certain strategic fit. Strategic enough that Lowe’s, The Home Depot’s principal competitor, has been supporting Habitat for Humanity since 1996, and has donated more than $20 million over the last four years.
But even though there’s no indication of impropriety between Mr. and Mrs. Blake and The Home Depot and Habitat for Humanity, it still sorta rankles.
For one thing, prior to this deal The Home Depot Foundation had previously concentrated on low-income multi-family housing and urban forestry, also strategically appropriate. That support will likely evaporate in whole or in part.
In terms of its corporate philanthropy efforts the company itself has had long-standing relationships with KaBOOM, and the Red Cross and the Hands On Network. With sales declining at The Home Depot, those organizations are all likely to watch as the #20 Home Depot car a contender in the NASCAR racing series, with Tony Stewart at the wheel… and a Habitat for Humanity bumper sticker… blows right by.
It wouldn’t surprise me if there were Home Depot employees who were rankled, too. Suppose you were The Home Depot guy or gal that negotiated or managed the KaBOOM relationship, for instance. It would be no picnic going to your contact to say that the relationship was changing and they were getting less money because Habitat was going to get more. And how, exactly, would you answer the all-but-inevitable question about whether or not the fact that Mrs. Blake… ahem… sleeps with Mr. Blake had anything to do with the change?
And I’ll bet Lowe’s was more than a little rankled. Frank Blake told the Atlanta Journal Constitution, “I actually called Robert Niblock [Lowe’s CEO] and said: ‘This is something we are considering. If it’s an issue for Lowe’s, let me know.’ He did exactly the right thing, saying it was for charity.”
Wouldn’t it have been fun to be a fly on the wall during that phone call?
I’ve been around CEOs who still do things for a particular charity even though one or more of their competitors does, too. Tom Smith, who was the CEO of the Food Lion grocery chain was a standout in that regard. But sponsorship and cause-related marketing campaigns from multiple competitors are more often the exception than the rule.
Even with all the recusing going on and the personal calls to competitors, The Home Depot’s action still seems cheap and tawdry to this outsider.
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