You have it backwards. The kernel is essential to an operating system, but all it does is the basics: process system calls, manage processes, get you virtual files... Essentially, a kernel is just the programming language and its runtime for everything you build in an operating system. Distributions are ran on top on the runtime, and the distribution is what's important in whether the user's liberties are respected or not. A programming language cannot compromise your liberties.

As long as something's funds doesn't change its features enough to obstruct the users, any kind of funding is fine. So far, obstructions have not happened to the Linux kernel.