WESTPORT?-- Since Paul Newman first declared, "Let's give it all away," in 1982, Newman's Own has donated more than $430 million in after tax profits in the sales of tomato sauce, salad dressings and a host of other products, to thousands of non-profit organizations worldwide.
It is precisely the Newman's Own model of donating 100 percent of its profits to charity that brought U.S. Senator Chris Murphy to the company's Westport offices this week to discuss proposed legislation that will reward such businesses for their philanthropy.
Prior to addressing Newman's Own Foundation CEO Bob Forrester, Newman's Own CEO Michael McGrath, and 40 Foundation employees, Murphy sampled some of the company's food offerings and quizzed them about the workings of the business.
"I'm a connoiseur of frozen pizza and this is really good," Murphy said as he sampled Newman's Own pizza. "How are you able to compete on price?"
"People are willing to spend a little more for our brand, " said Forrester. "The food has got to taste good and Paul (Newman) knew what he liked and was very involved, but the fact that we're giving the money away to charity doesn't hurt. This year alone we will donate $28 million to a broad range of charities."
Newman's Own Salad Dressing was launched in 1982 and the first year of profits exceeded $300,000. At the time it was a unique concept to give away all after-tax profits, but Newman felt it was the right thing to do.
"I remember when it was just salad dressing and popcorn," Murphy said. "How did you make the decision to diversity?"
"It was spontaneous growth based on customer demand," Forrester said. "Our customer loyalty is huge. We're here for the long term."
In 2005 Newman's Own Foundation was formed by Paul Newman to sustain the legacy of its charitable work and is funded entirely through the sales of its products.
"This year alone 75,000 kids will attend one of our 17 camps worldwide," Forrester said.
Murphy then spoke about the Philanthropic Enterprise Act, which he supports and that was introduced in the U.S. Senate in July of 2014.
"What this legislation will do is to allow for a business such as Newman's Own that donates 100 percent of its profits to charity to be treated as a non-profit for tax purposes," Murphy said. "It's obviously a wonderful business model that should be reproduced more than it is, but without the tax protection we aren't see a lot of new companies doing this. Once we pass the law, people will see the potential."
The act: "Amends the Internal Revenue Code to exempt the holdings of a private foundation in any business enterprise that meet specified requirements relating to exclusive ownership, minimum distribution of net operating income for the charitable purpose (all profits to charity), and independent operation (i.e., not controlled by a substantial contributor or family members) from the excise taxes on excess business holdings and unrelated business income."
Murphy said the measure has already been approved by the U.S. Senate finance committee, and it is currently on the Senate floor.
"It's no secret that nothing is passing in Congress these days," Murphy said. "It's not easy to get anything through especially when it involves money, but you are at the front of the line."
Murphy stated that Senators on both sides of the aisle have expressed support for the Philanthropic Enterprise Act.
"Both sides are rooting for you," he said.