At our education meeting last month, we discussed the very interesting film Philanthropy, Inc. For those of you who did not get an opportunity to watch it, the movie examines what’s known as “Cause Marketing” and looks at 3 different examples of corporate philanthropy: Wal-Mart, Breast Cancer, and Coca-Cola.
In an ideal world, when companies contribute financial resources towards charity, it results in a win-win situation for both the company and the cause. Since it is possible for companies to benefit unequally, it’s not unreasonable for us to turn a skeptical eye towards corporate philanthropy and ask, “Who is really benefiting and how much are they benefiting?”
Through these three case studies, we can see the potential for companies to help themselves by helping others. My favorite example though shows how corporate philanthropy can become a win/win/win scenario and what’s possible when a company is financially AND culturally invested in a cause.
According to the movie, Wal-mart was a bit late to the corporate philanthropy table. Their philanthropic efforts haven’t been very coherent or well-organized and have even backfired on them— like when they collected donated canned goods for their own employees. But during Hurricane Katrina, while the government struggled to respond, Wal-mart responded with speed and accuracy. They are, after all, the best logistical company in the world, and deliveries of desperately needed necessities like food, water, and diapers arrived with astonishing speed.
Between donated goods and funds, Wal-mart contributed nearly $25 million towards Katrina recovery efforts. Without a doubt, Wal-mart’s effort were critical to the health and well-being of people impacted by the hurricane, and it generated a lot of goodwill for them. Researchers regularly rank corporate reputations, and Wal-mart registered the single largest increase in reputation as a direct result of their Katrina philanthropic efforts. Companies involve themselves in charity for many reasons and benefit in a number of ways. Goodwill, however, can be one of the most powerful reasons and often arrives with financial benefits. Arguably, Wal-mart’s Katrina efforts helped them increase customer loyalty, diffuse demands for unionization, and increase their profits.
And that’s where some of the controversy around corporate philanthropy arrives. Has Wal-mart’s Katrina philanthropy allowed them to continue with business practices that exploit their workers and the environment? It’s not always easy to determine if corporate philanthropy is win/win and yet, I wouldn’t want to discourage any form of corporate philanthropy.
The most famous “Cause Marketing” happens every October. Developed and promoted by the Susan G. Komen Foundation, companies of all sizes and industries participate in raising money and awareness for breast cancer through selling, displaying, wearing pink items.
In a situation where there has been so much success, it is easy to point to problems. So, while I’m going to point out a few concerns, please remember that without a doubt, the Susan G. Komen Foundation has been incredibly successful at marketing and raising money for breast cancer and as a result many more women have detected and been treated for breast cancer. And that’s a great thing.
Pink-tober is an easy place to see Cause Marketing go wrong, because the win-win equation can be unclear or totally out of balance. If you buy something pink, how much actually goes to breast cancer awareness? research? treatments? It’s almost impossible to know. Certainly, a donation directly to the Susan G. Komen Foundation would make a bigger impact, but companies use pink as a marketing tool to persuade you to choose their item over a competitor’s similar non-pink item. It really is all about the money when it comes to selling pink items, and this becomes clear when looking at the wide variety of products that use pink to ostensibly raise money to improve women’s health but aren’t at all related to women’s health or, in some cases, even cause health problems (I’m looking at you Kentucky Fried Chicken).
On a personal note, I have concerns about fundraising for health causes in general. Breast cancer is not the biggest killer of women. That distinctions goes to heart disease. Breast cancer isn’t even the number 1 cancer killer of women. That distinction goes to lung cancer. But breast cancer is more marketable, and so breast cancer raises more money. I also wonder if it’s the most effective use of my hard-earned financial resources. It’s hard for me to get excited about it when it medical research costs so much. I am probably expressing a minority and unpopular opinion when I say that I believe that medical research dollars should be provided by drug companies and the Federal Government and be prioritized based on where the largest number of people can be helped.
All that said, raising awareness and treating breast cancer is a noble effort, and if companies are benefiting from pink marketing, I hope it’s in proportion to the amount of good they are creating in the world. “Think before you pink” is the advice I’d follow here.
This was a fascinating case for me and illustrated the transformative potential of corporate philanthropy. Coca-Cola uses a lot of water, and they have created quite a bit of controversy and generated numerous passionate protests over their water consumption in the communities they work in. Because clean, abundant water is a business priority for Coca-Cola, they adopted it as their company’s philanthropic cause and partnered with the World Wildlife Fund (WWF) to advance it.
The WWF is a large and prestigious charity working to protect and restore species and their habitats, strengthen local communities’ ability to conserve the natural resources they depend upon, transform markets and policies to reduce the impact of the production and consumption of commodities, and ensure that the value of nature is reflected in decisions made by individuals, communities, governments and businesses.
When Coca-Cola partnered with WWF, they didn’t just give WWF some money. They didn’t just slap a WWF logo on their Coke can. Instead, Coca-Cola actively sought to advance the cause of clean water by look outwards and inwards.
Outwards, they made a goal to “conserve seven key freshwater basins and build upon the conservation gains in three of those basins to magnify impact and scale.” They count as their success “restored habitats, growing wildlife populations, improved water quality and availability, better wetland management, and increased community engagement and support for conservation projects.” Specifically, they credit strong improvements in Vietnam’s Mekong Delta: “grasslands have tripled and bird numbers increased five-fold since 2001.”
This might be the type of effort expected from corporate philanthropy, but Coca-Cola took it further. They looked in to their own policies and practices to figure out how they could be better stewards of water. They developed a Water Efficiency Toolkit, which contains more than 60 practices that Coca-Cola bottling partners can implement within their plants, communities, or basins where they operate. So far, it’s reduced their water consumption by 20% and by 2020, they anticipate it will save “approximately 50 million liters of water use annually—the equivalent of 20,000 Olympic size swimming pools”.
Coca-Cola still faces criticism for it’s water practices, and no doubt, they still have improvements to make. Nevertheless, I think they are a great example of the potential of corporate philanthropy to become a win/win/win situation. Yes, the company (Coca-Cola) has benefited through increased public goodwill and profit. Yes, the charity (WWF) has benefited. In addition, there’s a third win: the future. Even if Coca-Cola’s relationship with WWF comes to a close, they have made changes that make them a better corporate citizen. For me, corporate philanthropy feels right when the company is financially AND culturally invested in the cause they choose to champion. In other words, their support of the cause is deeper than financial. It’s more than lip service. It’s a real commitment to improving themselves and the world.