After increased public criticism, boycott threats and opposition from immigration and gay-rights groups, Target CEO Gregg Steinhafel issued a public apology late last week for having made a $150,000 political donation to MN Forward, a pro-business group that backs anti-gay-rights and immigration-rights gubernatorial candidate Tom Emmer.

“While I firmly believe that a business climate conducive to growth is critical to our future, I realize our decision affected many of you in a way I did not anticipate, and for that I am genuinely sorry,” wrote Steinhafel.

While campaign finance laws allow corporate political spending—and Target initially defended its position, saying it “seek[s] to advance policies aligned with our business objectives, such as job creation and economic growth”—the company’s support of Emmer runs counter to its commitment to diversity.

Target is No. 40 on The DiversityInc Top 50 Companies for Diversity list and holds a 100 percent score on the Human Rights Campaign Corporate Equality Index. It also offers domestic-partner benefits (a DiversityInc Top 50 requirement), distributes $3 million each week to philanthropic programs nationwide and has sponsored Twin Cities Pride.

Despite its reputation, this firestorm highlights the potential risks companies face when mixing business and politics and will illustrate how far companies must go to “make good.”

Here’s the full letter, posted on Target.com:

Message From Gregg Steinhafel, Chairman, President and CEO – 8/5/2010
Dear Target Leaders,
I have heard from many of you, and our team members, over the past week regarding Target’s contribution to MN Forward, and I appreciate your engagement and candor, both of which clearly demonstrate your loyalty and passion for our company.

In situations like this, it is often difficult to find the right words, but I would like to respond with the same honesty you have shown me.

The intent of our political contribution to MN Forward was to support economic growth and job creation. While I firmly believe that a business climate conducive to growth is critical to our future, I realize our decision affected many of you in a way I did not anticipate, and for that I am genuinely sorry.

We remain fully committed to fostering an environment that supports and respects the rights and beliefs of all individuals. The diversity of our team is an important aspect of our unique culture and our success as a company, and we did not mean to disappoint you, our team or our valued guests.

Going forward, we will soon begin a strategic review and analysis of our decision-making process for financial contributions in the public policy arena. And later this fall, Target will take a leadership role in bringing together a group of companies and partner organizations for a dialogue focused on diversity and inclusion in the workplace, including GLBT issues.

Thank you for sharing your input and for your continued commitment to making Target an even stronger company.

Sincerely,
Gregg Steinhafel
Chairman, President and CEO

Reactions to Steinhafel’s apology:

Human Rights Campaign President Joe Solmonese: “We appreciate Mr. Steinhafel’s statement to company employees this afternoon but it doesn’t go quite far enough. Target’s apology is welcomed but without tangible action behind it, the LGBT community and our allies will continue to question the company’s commitment to equality. The promise to evaluate political contributions in the future, while a step in the right direction, is provided without details and does not mitigate their $150,000 supporting an outspoken opponent of equality for LGBT people. Target can still make it right by making equivalent contributions to equality-minded organizations and by making clear the procedure by which they will evaluate potential contributions in the future to include issues of LGBT-equality.” (HRC.org)

Boycott  Arizona Minnesota (BAM!), a group that opposes Arizona’s controversial law SB 1070: “While CEO Gregg Steinhafel wrote employees to say the discount retailer was ‘genuinely sorry’ over the way a $150,000 contribution to MN Forward donation played out, no real steps to correct the situation have taken place. It’s not out of the ordinary for a political contribution to ask for a contribution to be returned … Target should ask for its money back. Sorry doesn’t cut it! We want action!” (The Minnesota Independent)

OutFront Minnesota: “OutFront Minnesota calls on Target to do the right thing and make amends for the damage it has done by taking back its donation to Minnesota Forward, or by donating an equal amount to a political committee or cause of its choice that works to combat the attacks, dehumanization and marginalization of GLBT people, immigrants, and low-income workers represented by Emmer and Minnesota Forward. Emmer stands alone among candidates for governor in opposing equality for GLBT Minnesotans. Target should not stand with him.” (OutFront.org)

A Facebook page promoting a nationwide boycott has gained traction with more than 44,000 fans, but Target is not the only company in support of MN Forward. Six other companies each contributed $100,000: Best Buy, Pentair, Hubbard Broadcasting, Davisco Foods International and Polaris Industries.