Wednesday, March 5, 2008

It Makes Me See Red

Good day.

A month ago Chronicle of Philanthropy ran a story about rock star Bono's "Product (Red)" which as the report says "takes a cut of sales from popular consumer goods and funnels the money to to the Global Fund to Fight AIDS, malaria and tuberculosis in Africa." Around $60 million - says the Chronicle - has been contributed to GF.

The problem is lack of transparency. Nobody really knows how much is actually raised. There is no public accountability, no public stewardship and very likely, little true charity. "Red" is just the latest manifestation of so-called "cause related marketing," (CRM) an idea that has been around in full force for about 35 years. It began in earnest with the campaign to raise funds for the restoration of the Statue of Liberty. Lee Iacocca, the campaign chairman enlisted American Express in the effort and all kinds of claims were made as to the amount Amex actually came up with. It might have been a million dollars as I recall - a lot of new money - or a lot less. As I wrote at the time in Nonprofit Times Lady Liberty was being sold and there's a name for that.

Nonprofits look for an easy, cheap alternative to the slogging in the mud real fund raising requires. I can't really blame them. The naive ones may expect too much from CRM. The savvy ones know it is incremental money at best. Companies like the exposure as do the (often) fading celebrities who tie the can on.

A tolerable argument might be made that CRM brands charities. But I can't make it. I have yet to purchase a good or service because a minuscule portion of the sale might - but I will never know - hit the bottom line of my charity de jour. Have you?

1 comment:

Joe said...

Good post. You're certainly right about CRM being incremental dough and transparency issues are troubling. For another perspective on CRM, check out my blog, www.selfishgiving.com.