Stan,
When non-profits offers you the option to donate by means of gift annuities, they need to find ways to offset or hedge for potential pitfalls in their pool of investments. I am not justifying them. I disagree with the stock buying as well but it comes to show you they operate like a business first and as a religion second.
As far as military stock or investments, the documents from the SEC show very clearly that the Watchtower owned anywhere from 40 to 52% of Regi/Randcam. While many have argued that the Watchtower did not directly managed these investments, the truth is that they are ripping the benefits and at the same time, they can not claim ignorance of the matter. I am sure financial regulations demand that the WT corporation be informed of the financial conditions of their investments and the IRS demands they report on the performance of it.
The same happens with the Rilley fund. While the Watchtower is only the beneficiary of the fund, the information in their own magazines state that this type of donation of stock are conditioned to the WT becoming owners of the fund upon the passing of its original donor. The Rilley fund BELONGS to the watchtower. Whether they intervene on the daily decisions of it I am not sure but it is of little relevance. Once again they are obligated to be in the know regarding the investments made. Because they are the owner they also have the power to direct Comerica Bank if they feel their money is miss used (like invested on defense companies). Several of the tax disclosures regarding this fund show that there are quite a few questionable investments. Raytheon, Lockeed, Boeing. Even some movie studios which produce questionable films (films they actually warn their members about).
As everything in life, with the exception of the speed of light and truth, everything is relative. The major disjunction in all of these may go beyond the moral. You could argue that it is unethical for any religion to invest in defense stock (in fact they teach as much) you could also put in perspective. What do they demand from their members? I think most of us here would agree that they would scold you if you dare to even stare towards one of this corporations as you pass by their offices. Ray Franz describes in his book the story of a brother who had to quit his job because part of it involved delivering food to a military base. There are many stories like it.