Amazon selected New York City and Northern Virginia as locations for the company's new headquarters. What this choice says about regional economic inequality in the U.S.
Guest Host: Susan Page
You see them everywhere – pink ribbons, yellow wristbands, and red i-Pods. Avon, Nike, and Apple are just a few of the many companies aligning their products with social causes. “Cause marketing” took off in the 1980’s after American Express teamed up with a non-profit to help restore the Statue of Liberty. Some say ethical branding is a great way to prove a company is socially responsible while increasing profits. Others raise questions about how much of those profits go to charities — and whether the practice undermines donating in more traditional ways. Guest host Susan Page and her guests discuss the idea of shopping as philanthropy.
- Mara Einstein Associate Professor of Media Studies at Queens College. Author of "Compassion, Inc.: How Corporate America Blurs the Line between What We Buy, Who We Are, and Those We Help"
- Robert Volmer President, Crosby-Volmer International Communications
- Stacy Palmer Editor, "The Chronicle of Philanthropy"
Consumer goods giant Proctor & Gamble seems to be on a mission. Many P&G brands now claim to have a purpose that goes beyond cleaning clothes or keeping babies dry. Pampers is partnering with UNICEF to provide vaccines to poor children. Tide detergent is providing volunteers in areas hit by natural disasters. And it may be no coincidence that both brands are seeing double digit sales growth. Our guests chat about the “cause marketing” trend and how companies are partnering with charities to meet certain goals.
What Is “Cause Marketing?”
Cause marketing is when a corporation or consumer good ties their sales agenda to a charitable organization, said Mara Einstein. One of the most ubiquitous symbols of this kind of marketing is the “pink ribbon” campaign, where a pink ribbon appears on a product, signaling to a consumer that part of the profit will go to breast cancer causes. One of the biggest problems with this kind of marketing, Einstein said, is that it’s not regulated. So while some companies may actually be using the pink ribbon to signal the fact that they give money to breast cancer causes, others may put the same signal on their product for any other reason.
Will People Pay More To Feel Better About A Product?
If two products are side by side and one has a cause attached to it, Einstein said people are both more likely to pay more for the one with the cause attached, and may actually switch to the cause product from the other product. But Stacy Palmer said that most charities don’t have a chance at being able to partner with companies for this kind of marketing. “People aren’t going to necessarily associate their brands with something that’s a really tough problem, helping drug addicts or that kind of thing. So we’re talking about a limited number of charities, but those charities that have done very well, some of them are raising a very big share of their money from these deals,” Palmer said.
More Regulation, More Information
“I think minimally regulation needs to happen so that people have a better understanding of how much money is actually going to a campaign,” Einstein said. She said that some companies also sometimes have a cap on the total amount of money they’ll donate to a campaign. When the cap is reached, no more money goes to the charity, but consumers might not necessarily know that, Einstein said.
You can read the full transcript here.
MS. SUSAN PAGEThanks for joining us. I'm Susan Page of USA Today sitting in for Diane Rehm. Diane is recovering from a voice treatment. Consumer goods giant Proctor & Gamble seems to be on a mission. Many P&G brands now claim to have a purpose that goes beyond cleaning clothes or keeping babies dry.
MS. SUSAN PAGEPampers is partnering with UNICEF to provide vaccines to poor children. Tide detergent is providing volunteers in areas hit by natural disasters. And it may be no coincidence that both brands are seeing double digit sales growth.
MS. SUSAN PAGEIn the studio to talk about the trend of cause marketing is author Mara Einstein, Rob Volmer of Crosby-Volmer International Communications and Stacy Palmer of "The Chronicle of Philanthropy." Welcome to "The Diane Rehm Show".
MS. MARA EINSTEINThank you.
MR. ROBERT VOLMERThank you.
MS. STACY PALMERThank you very much.
PAGEWe're going to invite our listeners to join our conversation in just a little bit. Our toll-free number is 1-800-433-8850. Our email is firstname.lastname@example.org or find us on Facebook or Twitter.
PAGEWell, Mara, you have a new book out called "Compassion, Inc" about this whole trend. What is cause marketing?
EINSTEINCause marketing is when a corporation or a consumer good ties their sales agenda to a charitable organization. So one of the things that people probably think of more often than anything else, is when they see a product with a pink ribbon on it and immediately know or think that money from the purchase of that product will then be going to help raise money for breast cancer.
EINSTEINPart of the issue with that, going beyond to the issue surrounding this, is that it may or may not in fact be going to breast cancer research. That's because pink ribbons aren't regulated so you may be buying something from say the Susan G. Komen for the Cure Foundation or maybe from the Breast Cancer Research Foundation, but it might be a pink ribbon that somebody just decided that they wanted to put on their product and it may not be attached to an organization at all. That's where some of the issues with cause marketing begin to come into play.
PAGESo Stacy, is this a new thing, cause marketing?
PALMERIt's about 20 years old and it has gotten much more sophisticated and we see lots and lots of groups and companies thinking about it, but it really started with a very simple idea when the Statue of Liberty was getting renovated. There was the idea that everybody could donate and then American Express came up with this idea and trademarked that term 'cause-related marketing' and said, and then everybody else took off and realized this was a great idea and a way to help charities and to help businesses.
PAGEDo you know how American Express got this idea or decided to start this project that started this whole trend we're talking about today?
PALMERI think it was, you know, really starting to think about different ways to help non-profits get their message out. One of the really tough things for any non-profit cause is to get attention and so how do you persuade people that they want to give to the Statue of Liberty?
PALMERSo a creative way to do it was to allow people to make this kind of donation and I think that's what caught on with people is, all of a sudden let's find a way to link these things in a way that the charity itself doesn't have to spend a lot of money on marketing, but that the company is going to do it. And so it started out of that impulse.
PAGESo Rob Volmer your company specializes in cause marketing. Why is it appealing to companies?
VOLMERYou know, it's appealing to companies for a variety of aspects. Of course, first and foremost, companies have a fiduciary responsibility to their shareholders and so any money that they donate or use in a cause marketing campaign has to have an impact in some ways on the bottom line.
VOLMERImpact on the bottom line doesn't necessarily mean more sales it can also mean more employee engagement. I see a vast majority of companies that the number one reason that they say they want to institute a cause-marketing campaign is to keep employees. Employees want to feel like they're having an impact on what they do nowadays. A lot of them feel disenfranchised with just the day-to-day drum roll of regular corporate work or technology work.
VOLMERSo when they feel like part of their work is actually making an impact, it makes them more likely to stay onboard.
PAGESo the bottom line isn't the only reason a company might do this. But is the bottom line one reason?
VOLMERThe bottom line is absolutely one reason. You have to look at the bottom line because of the fiduciary responsibility to shareholders, but there's also the giving-back reason. A CEO could have a pet cause such as his son has diabetes and so that could be a reason. You know, I think that just the giving-back as an organization is very, very important to corporations because it's important to their employees.
PAGEMara, what's your view on this?
EINSTEINWell, it comes from both employees and from consumers. One of the things that, actually that I start talking about at the beginning of the book is, why did this become such a big issue for consumers to begin with and a lot of it has to do with how we use brands as part of our personal identities.
EINSTEINWe drive a Prius not only because it's environmentally conscious, but also, frankly, it's an expensive car and both of those things are communicated about us when we drive around in a Prius. But that kind of idea, in terms of using brands of part of personal identity, also relates to cause marketing because we want our brands to express our values. And so we want people to see us use brands that also have some kind of an environmental consciousness or giving back to the community.
EINSTEINWhere this is also started to take off was because of social media and whenever companies start to do things that consumers don't like it's very simple to get on to Facebook and on to Twitter and say, I don't like what this company is doing or alternatively to say, I do like what this company is doing and it's talking to my needs as a consumer.
PAGEAnd do you think that, is there evidence that people will pay more for a product to feel better about it, that if it's supporting some cause that they like that they will actually switch to that product?
EINSTEINAbsolutely, only a couple of years ago side by side if there was a cause attached and people had to pay the same amount of money, they would choose something that had a cause attached to it. Now the statistics are starting to say that if a cause is attached, people are willing to pay more for that particular product.
PAGEWell, that's pretty amazing. How has this affected how charities approach fundraising, Stacy? Does it change kind of, the ground rules for how charities go about their business?
PALMEROne of the challenges for charities is that most of them don't even have a chance at being able to get into one of these kinds of deals. So it's really the popular kinds of causes and as Mara points out nicely in the book, you know, a lot of the consumers that this is aimed at are women so you know, that's not surprising that it's something like breast cancer that has done so well in these kinds of things.
PALMERPeople aren't going to necessarily associate their brands with something that's a really tough problem, helping drug addicts or that kind of thing. So we're talking about a limited number of charities, but those charities that have done very well, some of them are raising a very big share of their money from these deals.
PALMERSo and it's getting more sophisticated so that people are going into solving more kinds of problems for charities. They have to be very careful to protect their image and so they've gotten very sophisticated at what they ask for from the companies. It's not one of those things where the company comes in and says, you know, we're going to do this, that and the other. The charity comes right back and says, what we're demanding, these are the kinds of things we want and they have very sophisticated people on their staffs as well.
PALMERSo there's a negotiated deal here. I think the problem for consumers in figuring out what's going on here, though, is there isn't a lot of regulation in this field and there's not a lot of ways to know exactly how much of your dollar is going to the charitable cause. And so the tricky part is to say, you know, what is it that gets to the charity? And then for the donor to say okay well I did that really nice thing.
PALMERI gave $5 by going to Starbucks and buying a cup of coffee that's going to go and benefit a good cause. Do I then have to give my charitable donation when they ask me for money next month? I've already given. I don't necessarily need to give and so I think that's one of the really big issues that charities have to deal with. People feel like, oh I made a difference just through my purchase, not through my donation. And those are two really different things.
PAGEIs there evidence that that happens, that people feel like they've kind of fulfilled their responsibility to others by spending a bit more on detergent?
PALMERThere is indeed. Unfortunately there's some research that has shown that people do feel that way. And the reason I say it is unfortunate is because the little amounts of money that go to charities from these cause-related deals are nothing compared to the billions and billions of dollars that Americans donate to charities. Nearly $300 billion gets donated a year and these deals are not producing that kind of money so we're talking about a very small portion of money going to the charities.
EINSTEINAnd piggy-backing on what Stacy was saying one of the big concerns around cause-related marketing is we don't know when we buy a product how much of that purchase price is actually going to the charity. Some organizations will say $5 from the sale of this product goes to this charity, but some just say a portion of the proceeds. We don't know what that portion of the proceeds is so something like a red t-shirt, a $28 t-shirt, only $3 from the sale of that t-shirt was actually going to the red campaign. That's not a very large percentage.
EINSTEINIn fact, everything associated with Product Red, which was Bono's campaign tied with The Gap and Apple and so on, each different organization had a different amount of money that was tied to what was going to that charity. So it's very confusing from a consumer standpoint.
PAGEWell, do you think there ought to be more regulation or should just consumers demand more information? Or how should we deal with that?
EINSTEINI think both of those things have to happen. I think minimally regulation needs to happen so that people have a better understanding of how much money is actually going to a campaign. But there's also got to be increased transparency on the part of the companies that are using these campaigns so people know how much money is going and if there's a cap which is what a lot of companies do, that when the cap is reached that consumers know it's been reached so that they're still not buying the product thinking money is going to the campaign and in fact there's no money going to the campaign anymore.
PAGEStacy mentioned risks to the charity and they want to be careful about who they're associated with. Rob, how about risk for the company? I mean you think about something like the controversy with the Komen Race for the Cure. I wonder, did that reverberate with some of the companies that have been associated with that charity?
VOLMERAbsolutely, I mean, you're seeing this on a re-occurring basis the vetting has to go both ways. You know, with Komen in particular, there's been a lot of sponsor fallout as a result, you know, in Komen, getting back to the pink ribbon part of this. That was the biggest mistake, I think, Komen ever made. They did not trademark or take under their wing the pink ribbon, allowing every other organization to do it so I think that was a misstep on Komen's behalf.
VOLMERSo yes, there's a lot that has to happen on the company's side as well on vetting. One point I'd like to make though is that, you know, looking at kind of the landscape as it is, the vast majority of cause-related marketing campaigns that are out there are not necessarily tied to dollars that a consumer spends for a particular product.
VOLMERIf you go to the grocery store, you can find dozens of examples where that is the case, but if you look overall at the number of cause-related campaigns out there, that's not what it is the majority of the time. You see a lot of cases of in-kind giving where Wal-Mart for instance does all of their. They'll provide logistical support in food banks.
PAGEWe're going to take a short break and when we come back, we're going to go to the phones. Our lines are open, 1-800-433-8850 or send us an email at email@example.com Stay with us.
PAGEWelcome back. I'm Susan Page of USA Today sitting in for Diane Rehm and with me in the studio today Stacy Palmer. She's editor of "The Chronicle of Philanthropy." And Robert Volmer, he's President of Crosby-Volmer International Communications. And we're joined by Mara Einstein. She's an Associate Professor of Media Studies at Queens College. Her new book is titled "Compassion, Inc.: How Corporate America Blurs the Line Between What We Buy, Who We Are and Those We Help."
PAGEWe're going to take some phone calls in just a moment, but I wonder, Mara, if this is a generational trend. I mean, is there evidence that aging baby boomers or millenials are most likely to be swayed and want to participate in this kind of charitable giving?
EINSTEINYes. In fact, it's very appealing to millenials. And they are a particular demographic group that marketers are interested in. You know, sort of that heart of the 18 to 49 age group that every marketer wants to try and reach. Boomers are also interested in it, but it's reflected in a slightly different way. There's something known as LOHAS, which stands for Lifestyle of Health and Sustainability. It's what Paul Ray called the cultural creatives back in the 1970s. He was a sociologist who called them cultural creatives.
EINSTEINAnd so what's happened is the boomers have aged. They're looking more at this in terms of where do they want to invest their money? So they're looking for socially responsible investing as opposed to maybe purchasing products. But in terms of millenials, yes millenials very much want to participate in this. And in fact are the ones who are most likely to volunteer and want to do good kinds of things.
EINSTEINWhen it comes to the really younger group -- and this was an interesting story that one of the people that I interviewed talked to me about. He was someone who was working at MTV and it was at the time of Hurricane Katrina. And what they had done in terms of a cause campaign was that people could buy a song and by downloading a song, money would go help people in -- from the hurricane. And the kids were just like, you know what, we get that this is not enough. There's got to be something else that we can do.
EINSTEINAnd so what happened was in conjunction with United Way MTV came up with this thing called Alternative Spring Break. And what Alternative Spring Break was, was that two kids from each state around the country could go down and actually help build houses with Habitats for Humanity. And by doing that, it gave them such a rich experience and it really got them invested in volunteering.
EINSTEINAnd I think that that's where we have sort of fallen off is kids at the younger generations want to do things. They're not quite sure how to get involved and how to get invested. Give them an opportunity to buy something, that they know how to do and they'll do that. But give them something else. Give them something bigger they can do and they'll certainly get involved in that as well.
PAGEThat's interesting. Well, here's an email from Tuscaloosa, Ala. and this emailer writes, "I'm one of those people who hates ads on TV and pop-ups on the internet. But after last year's April 27 tornado wrecked my city, I felt very warm and fuzzy towards Tide after seeing their free laundry centers in our town. I now buy Tide when before I didn't because I thought it was too expensive." Boy, that's got to be, you know, very sweet to the makers of Tide.
VOLMERWell, it's fantastic. I mean, it's fantastic that they were able to put their good deeds to work and attach it to a community. You know, one of the biggest things that corporations have an issue with today in regards to giving is making sure that there's a true impact, that there're metrics around what they do. This is an example where they can look at it and see that their product was actually put to good use and actually helped the community that was impacted.
PAGEHelped the community and also helped their bottom line...
PAGE...convinced that this person to have some faith in the brand. But, Stacy, you mentioned earlier that there're some charities that just might would have a hard time maybe building these kind of partnerships because while everyone is in favor of helping the victims of a tornado, there are very worthy causes that may be a harder sale or more controversial.
PALMERAbsolutely and it's very hard for companies to want to back those kinds of things and for the nonprofits to get attention to things. But one of the interesting campaigns that's out now is something that Starbucks is doing with a group of community banks to create small jobs. And that is a cause that most people don't really understand, don't think about and isn't necessarily your sort of warm and fuzzy kind of thing. But it's helping these community banks get out a message that they've never been able to crystallize in just a few words. So that marketing help was huge.
PALMERSo we often think about this in terms of the money raised but really it's about getting attention to causes that you might not think about. So at least we're starting to see some differentiation going on I think as this is getting more popular and as some of those warm fuzzy causes are being worn out. You can't keep going to the same charity again and again. And so as we're seeing things get more sophisticated I think we're also seeing a change in the kinds of things that companies are getting into.
PAGERob, do you agree with that?
VOLMERI agree wholeheartedly. I mean, if you look at a quick brief history on charitable giving, you know, up until the early 19th century, it was about giving alms or virtuous giving as part of a religious right. Then you had the industrial age where you had the Rockefellers, the Kelloggs, the Carnegies who had a lot of money, made a lot of money, in a lot of cases a lot of damage to the world, and they had also a lot of ideas for how to make society better. So they built hospitals, established foundations.
VOLMERThen you go to the technology age of the '90s and you almost have venture giving. These people are used to having metrics associated with everything that they do. And so when they go into organizations, a lot of times it's a multiyear gift where metrics have to be met, or they'll do in-kind gifts. SAP has a mantra that they want to change the way the world is run where they do a lot of community-based giving and educational partnerships for instance. So you're seeing this evolve.
VOLMERBill Gates is a good example of this metric-based giving going into different cities into the school systems giving large chunks of money. But they all have strings attached. And they're in there with their feet on the ground trying to perpetuate change.
EINSTEINI want to go back to the Tide Loads of Hope example because I actually write about that as a great example of an organization that has done well. And what's different between Loads of Hope and some of the other things that we've been talking about is there's not a direct tie to a product purchase in order to trigger the thing that the company is doing good. And so I'm fully behind any organization like Procter and Gamble that wants to do a Loads of Hope campaign. They're not asking you to buy something in order for that good to be done. Go out and do wonderful things in the community. Just don't ask people to buy a product in order for that to be triggered.
PAGEBut then they do run these very emotional ads highlighting the good that they're doing, which does make you feel pretty good toward Tide.
EINSTEINThat's fine but that's a decision that you get to make. The difference is, for example, I went out and bought a bottle of Dawn dishwashing detergent 'cause there was this picture of this sea lion or whatever it was with these big imploring eyes and this huge one dollar on the bottle. And I had to buy detergent anyway so I figured, okay I'll buy it and I'll feel good about myself 'cause I'm helping the environment, right?
EINSTEINSo I do it and I go home and I buy it and I use it and then I look on the bottle and this was after I'd already finished using it. I was actually taking a picture of it for use in the book. And then in teeny tiny little type it says, in order to trigger this donation, you have to input information onto a website. So here I was thinking that just by buying this product I had actually made a donation, and in fact I hadn't done that at all.
PAGEWell, in fact, there's a way for them to harvest information about you so that they can contact you again. Rob, is that fair do you think?
VOLMERWell, I think that we're missing a point here. Yes, they required you to go to the website to have your dollar donated but their overall goal was to develop wildlife champions, or I can't recall the exact phrasing. So they made you aware of local events so it wasn't just a onetime purchase. They tried to get you actively engaged in the process of real change. And this was just the trigger to get you to go to the website to learn more information about how you can make a difference in your community instead of a onetime gift.
PAGEOr was it an effort to get your email address so then they could send you further solicitations?
VOLMERWell, you can opt in or opt out to those. You know, in all of these you can do that. Of course, again, a marketing database is a great thing, but they allow you to opt in or opt out. And in my experience, they've been responsible with that. If you choose to opt out, they don't email you.
PAGESo, Stacy, do you think that generally this is a pretty honorable system or are there ways in which you think people who are consumers need to be a little buyers beware on some of these things?
PALMERConsumers very much have to look out for themselves, even though there are some regulations that apply. This isn't an area that most governments are spending much time looking at so we all have to realize that as consumers we need to be the ones who are asking the questions. New York is actually doing an interesting investigation though right now with breast cancer groups and asking them lots of questions. They sent questions to 130 groups saying, you know, how much of these purchases is actually going to charity? So we may see some regulations coming out of that kind of investigation. So I think, you know, it has gotten the attention of government.
PALMERBut consumers have to ask these questions about how much is actually going to the charity. If you really think that you're making a difference you want to know and you want to know is that charity a good one? Is it making a difference? So ask questions about that as well. It's absolutely on us to be able to do that. And as journalists we need to ask those questions as well to rate campaigns and, you know, be watchdogs.
PAGEAnd are you rating campaigns?
PALMERWe don't do that yet but one of the things we realized, we started looking in that question and we asked some state regulators to send us information. And they sent us piles and piles of paper, nothing in a database. And so for the average donor to be able to do this it's really a challenge. So we hope to be able to do it at some point, but it is not easy.
PAGELet's go to Eduardo. He's calling us from San Antonio, Texas. Eduardo, thank you so much for joining us on "The Diane Rehm Show."
EDUARDOWell, thank you for having me. This is a wonderful topic. I've been a grant writer for over a decade and I wanted to mention how I've seen the shift for the nonprofits having to behave more like a business that's marketing a partner for the foundations that have been established by these corporations. And, you know, you talk about the matrix that show the benefit of their product going to the community but the nonprofit has had to change a little bit of its focus in order to make it more of that marketing event for the donor then in order to focus on the actual service delivery.
EDUARDOI think it's an important shift that's happened over the last decade and I wanted to see if you would like to address a little bit of that.
PAGEEduardo, that's so interesting. Thanks for calling us.
EINSTEINYes, that's actually something that I've seen an awful lot of. And what has had to happen in looking at this from a broader perspective is exactly what you talked about, is that charities are having to change how they to business in order to be able to attract and be appealing to marketers. And something that we talked about earlier is that things that appeal to women are going to be the things that are going to get the most attention from consumer product companies. And it's also that the bigger charities are going to be the ones that are also going to be able to attract consumer organizations because there's more of a give and take.
EINSTEINIt's what I call the hyper charities, the Komens and the Product Reds and Feeding America that you've got to become a good and amazingly sophisticated marketer yourself as a charitable organization in order to be able to appeal to these consumer product companies.
PAGEIs that a good thing, Stacy?
PALMEROne of the things you have to keep in mind though is that charities have a choice about where they raise money from. They don't have to raise money from companies at all. Companies actually provide a very small amount of the charitable donations. And there are lots and lots of very wealthy people, affluent people and middle class people who give very generously and you can tap into those folks without ever having to touch the companies. And so some nonprofits, you know, have a very specific point that they won't take money from companies and that they think that that's not a good idea.
PALMERBoth in terms of practicality -- it takes a lot of time to do this and they don't necessarily want to be associated with it. So these nonprofits have chosen to go ahead and do this.
PAGERob, are there nonprofits that maybe a company says, boy we'd really like to have a partnership with you and they say no?
VOLMERAbsolutely, it happens on a regular basis. Either there's a misunderstanding of motives or they're not ready to take that step. And a lot of cases you see corporations now providing unsolicited grants to different nonprofits in-kind services so that they don't have to take that.
PAGEI'm Susan Page and you're listening to "The Diane Rehm Show." Well, we've talked about how this can make consumers buy a product because they like the charity. What about if a consumer doesn't like a charity of some product? They've used a brand they've used for years and suddenly, it's promoting a chartable cause that they disagree with. Can that cost them business?
EINSTEINI would imagine so. I haven't really looked at -- you know, most of these product companies are very sophisticated marketers and they've done a tremendous amount of research to find out where things are going to marry together with the people who use their product and the charities that they're going to marry it up with.
EINSTEINBut what I mention too is there's a spectrum of -- what I call a spectrum of responsibility that corporations can enact on. And so they can do something as simple as just complying with government regulations to what I'm more advocating for, which is social innovation. So cause marketing is sort of in the middle of the spectrum. It's a very simple thing to do but what I would like to see more and more corporations do is get involved in social innovation, which is actually embedding the things that the company can do and cares about into the actual business of what the company does.
PAGESo give us an example of a company that's done that.
EINSTEINOne that comes up again and again is this company called Interface Carpet. And Interface Carpet was run by a man by the name of Ray Anderson who unfortunately passed away last year. And what he did, all of a sudden he became very environmentally conscious and realized being in this company that created petroleum-based products he had to look up and down the supply chain and figure out what he needed to do in order to make a more environmental and sustainable product.
EINSTEINSo he changed the kinds of materials that the carpet is made from. He reduced the amount of petroleum, if not eliminated it. He's working toward -- the company is working towards by 2015 eliminating all petroleum products. They are recycling when the carpeting gets taken out of people's homes so it eliminated 100,000 tons of product into landfill. So it's thinking about the way that a company does business in order to wrap yourself around a charitable cause that you care about.
PAGELet's go to Eric calling us from Rockville, Md. Hi, Eric.
ERICHi -- Page and everybody else. It seems to me that Box Tops for Education has been around for a long time, but I don't really want to buy a lot of processed foods in order to have my school have their benefit. And I'm not even sure how much the benefits are getting, but if someone could tell me, I might just give that money straight to the PTA instead.
PAGEOh, interesting, Eric. What about box tops for schools? Has anyone looked at that? Have you looked at that, Mara?
EINSTEINI mean, I know that it's around. It wasn't something that I looked at in particular. But exactly what you are saying and the caller's comment is exactly right, is the best way and most effective way for you to give money is actually to write a check to the charity that you want it to go to. One other thing that's going on now also in terms of charities is that they're making it harder.
EINSTEINOne of the arguments has been is that cause marketing existed to make it easier for you to donate, right. But maybe clipping those box tops and saving them and giving them to your school -- and I've done the same thing for my daughter -- you know, you could actually write a $50 check to your PTA and probably do a whole lot more good.
PAGEYou know, we have a similar comment from Ron who writes us an email from Fort Wayne, Ind. He says, "I think that switching from direct giving to a particular charity to this method is a net loss for that charity. The only way this works for the charity is if it's a cause that I would normally not support." Because of course, Stacy, the point you were making, you don't give nearly as much to the charity as you might if you write a check.
PALMERRight. And the other problem is the charity doesn't know who you are. And so what the charity would really like when you give that even small $5 contribution is to know that I can come back to you and ask you for another gift and get you really excited about the cause. So really the best thing you can do is also provide your name and email address to the nonprofit you care about.
PAGEAll right. That's Stacy Palmer. She's Editor of "The Chronicle of Philanthropy." We're going to take a short break. When we come back, we'll talk about your questions and comments, we'll take some phone calls. Stay with us.
PAGEWith me in the studio Mara Einstein, an associate professor at Queens College who's written a new book called, "Compassion, Inc." and Robert Volmer from Crosby-Volmer International Communications and Stacy Palmer from "The Chronicle of Philanthropy." Here's an email from Ann. She writes, "My husband and I give a great deal of thought each year about which charities to make donations to."
PAGE"We balance our giving among local, national and international organizations and I resent being asked in the checkout line at my local grocer and drug store and bookstore if we want to donate on the spot. I feel uncharitable saying no, yet I know that I want to save my giving dollars to the charities I chose." I wonder how you all feel about that.
PALMERThere was a study recently, actually, that looked at people who go door to door and ask for solicitations and they found that people are so embarrassed and want to get the people away from them that they give more as a result. So I think that guilt tripping, unfortunately, does work, but you know you really have -- it's wonderful that you're such a generous person and as, you know, giving in those other ways really is helping the charity more. So I think you can smile and decline and, you know, really not feel bad about yourself for a second and know that you are a giver.
VOLMERYou know, I mean, I agree with that statement. In general, though, I look at this as impulse giving. It started with the Salvation Army bell ringers and, you know, you felt guilty if you walked around and waited until someone else was donating so you could get around and not give money. Then it became the Girl Scout cookies. You know, you see these smiling little 12-year-old faces with these big boxes of cookies and it became very difficult not to give.
VOLMERThen it was roundup to the next dollar at Safeway or CVS give five dollars for St. Jude. It's a myriad of different ways you can do it. What I can say is when they do that, that money all goes to the charity. When it's roundup to the next dollar or five dollars at CVS organizations like St. Jude Children's Research Hospital that by all accounts are -- it's the second largest charity in the United States behind Komen. You know, these organizations are receiving quite a great financial impact by these smaller gifts.
PAGEAll right, let's go to Tom. He's calling us from Florida. Hi, Tom.
TOMHello. I am disabled Vietnam veteran and I'm dying of cancer at the moment from exposure to Agent Orange. But when I was in better health for more than seven years twice a year my organization, the Veterans of Foreign Wars of the United States, has a needy veterans relief fund drive. And we donate 100 percent because all our workers work for free. We donate 100 percent of donations toward keeping the thing going and helping the veterans in need.
TOMNow, I run across organizations that are phony. They send people down to the army navy store, they buy uniforms, they pose excuse me, as veterans and they only give 20 percent or less towards helping veterans. We give 100 percent towards helping veterans. This is the Veterans of Foreign Wars of the United States.
PAGEAll right, Tom, thank you so much for your service to the country. We're sorry to hear about your illness. You know, I know that people who want to be generous to causes, including the cause of vets, want to do it in a way where the money really goes where they want it to go. How can they make sure that happens, Stacy? What are some tools that people can use?
PALMERThere's a lot of information available online that you can get and charities have to file every year an informational tax return with the IRS and that's how they spell out exactly how they're spending their money. And you can get a copy of it. There's a website called guidestar.org that you can go to and get it. There are also a lot of watchdogs that you can get more information about. And you can always ask the charity itself.
PALMERIt's a sign of a fraudulent charity if they won't tell you anything or they pressure you to give or any of those kinds of things. So if you start feeling like this isn't a legitimate cause go away. There are plenty of great groups that really need your money and, sadly, there are people who prey on causes, especially, it's the ones that tug at our hearts that sadly have the most phoniness going on so you really do have to ask hard questions, which is difficult of asking charities, but you can do it.
PAGEHere's an emailer who writes, "I felt like everyone jumped on the pink ribbon bandwagon. It became a marketing ploy not a real fundraiser. The whole mess with Planned Parenthood sealed the deal for me. I wouldn't buy anything with a pink ribbon on it ever again." You know, Rob, you were talking about some of the repercussions from that controversy with the Komen Race for the Cure. Tell us what happened as a result.
VOLMERYou know, well, first of all, the person who headed on the Komen side has left the organization. Komen has been in a case of turnover as of late. They've had an interim CEO. Now, they have a new CEO who's coming from the science field for the first time. They have all these different affiliates a lot of them, which if you go out to -- a great case study I like to look at is sororities in the nation. So you go college sororities and they all participate in these races. Ask what percentage of them know if they're -- the actual racees -- if they're representing the Breast Cancer Research Foundation or Komen. They don't know. There's such a -- it's so convoluted.
VOLMERThe whole Planned Parenthood, it was just a debacle to begin with. It was a no-win scenario for the charity. There are probably...
PAGEI mean it was actually a big boost for Planned Parenthood wasn't it?
VOLMERIt was a big boost for Planned Parenthood, but it was a big -- it was a debacle for Komen. It was a no-win scenario. You know, they had put certain guidelines in place that required them, per their bylaws, to actually end the funding. And by making that public there was a big backlash. Now they put the funding back in place and they're trying to recover from this. And it's a road. It's a struggle.
PAGEWell, Mara, you mentioned earlier the new power of social media of things like Twitter and Facebook, which, you know, we now take questions off Twitter and Facebook...
PAGE...for "The Diane Rehm Show." How did this Komen controversy -- what role did the social media play in that?
EINSTEINWell, it was everywhere. It took off immediately. Somebody asked me to blog for something, as a matter of fact, based on how he found me on Twitter or Facebook or someplace. And it's so fast and the ability, not only to be able to post things, but to be able to re-Tweet somebody else's information, it just gets sent out so quickly. And that's the issue is organizations don't have an opportunity to make a mistake and then when they do make a mistake, it gets hit on very, very quickly.
PAGEAlthough it also gives them a way to instantaneously respond if they're willing to do that or are able to do that.
EINSTEINYeah, for sure, for sure.
PAGELet's go to Marian calling us from Roachdale, Ind., hi, Marian.
MARIANHi, thank you for taking my call. I'm a nurse and health educator in Indiana. I've done clinical trials at major university hospitals and I advocate now for the health of our food and the animals in confinement and our earth here in Indiana where we're devastated by agribusiness. And what bothers me is these companies are promoting charities to take care of diabetes, heart disease or of cancer or all these things and yet, at the same time, they're promoting products like processed food for our children and dairy products and tainted meat from animals that are treated cruelly. They're promoting that.
MARIANI mean, the best example here is the Ronald McDonald Houses. You know, they're kids get -- you know, everybody's great that McDonalds provides these places for the parents to stay while our children, who 70 percent are overweight and most of them have type II diabetes and have been raised on white bread and bologna, and they're perpetuating the very diseases that they pay the charity -- that they're...
PAGEMarian, what a good point and appreciate your work as a nurse. Mara, what do you think about that, the point that she was making?
EINSTEINWell, one of the examples that I -- one of my, quote/unquote, "favorite examples" is ConAgra Foods and they had a tie in with feeding America. And the commercial that they have is this little girl running around the supermarket picking ConAgra foods off of the shelves. And she has pictures of children who were supposedly hungry, but these are the cleanest, you know, smiling faces of, quote/unquote, "hungry kids" floating over her head as she's running around the supermarket putting these foods into the basket.
EINSTEINAnd it's, you know, excuse me, but Chef Boyardee and Marie Callender's are not really things with a whole lot of good nutritional value. And so what that campaign really epitomized for me is this idea of how separated we've become from the reality of the ground of people really in need, people really hurting and children really being hungry. And what we're doing to our own children by giving them really not very nutritional food in order to help some other kid who's not getting fed. You know, the hypocrisy there is just beyond anything I can even put words to.
PAGEBut that seems so risky. When it seems so clearly hypocritical or there's clearly this disconnect, that seems like a risky campaign to me because won't consumers call you on that?
VOLMERAnd they should. Whether it's we'll donate a percentage of the proceeds to charity consumers should ask how much. When something says organic or sustainable or we're associated with this charity they should always call them out and always ask questions. You know, there is a lot of hypocrisy in America in general. And, you know, corporations have to be careful about what organizations they partner with. You know, consumers, as there are more and more sources, as the internet's opened up, they can basically find any set of facts that they desire to find.
VOLMERAnd so I encourage consumers to use those facts. If they have questions about a particular campaign, email the public relations department of a particular company or ask them on Twitter or on Facebook. They will usually respond in a very short period of time to your questions. I think one thing, though, you know, that I don't want to get lost is that, in general, we all agree the best way to make a donation is directly to a charity. It's not through a third party. And so when consumers are looking at all these campaigns don't become so disenfranchised that you decide not to give in general. You know, look at the charities directly.
PAGEHere's an email that we've gotten from Ashley. She writes, "Often times when federal funding for nonprofit organizations is cut they have no choice but to go to corporate partners and private donors. Such was the case for the literacy organization, Reading is Fundamental, which lost nearly $24.8 million in federal funding last March when Congress made sweeping cuts to the budget. Fortunately, Macy's is now partnered with RIF to raise some of that money." Is that true, Stacy? Is this what you think is happening in some of these cases?
PALMERIt absolutely is. The federal and state budget cuts are hitting a lot of nonprofits very hard and many of those groups don't really have strong fundraising operations because they always got their money from the government. And so now they're having to develop them. And so some of these partnerships that companies have reached out and helped nonprofits have really helped them raise a lot of money and attention for their causes. So those kinds of things are very good, but it's also possible to raise a lot of money from individuals and get the word out.
PALMEROne of the things that often happens -- we were just talking about Facebook and Twitter. You know, some of these campaigns where people all of a sudden raise money from their friends and family and do those kinds of things. There are lots of ways to raise money for charities that really don't need the companies to get involved. So while it's helpful there are alternatives for every organization.
PAGEI'm Susan Page and you're listening to "The Diane Rehm Show." We've been taking your calls and reading your emails. Here's an email from Fred. He says, "Are companies using our money to save them money on their taxes." Is there a tax benefit to companies when they have cause marketing like this?
EINSTEINThe tax benefit comes from -- what has happened is that it's been moved out of the public relations department and into the marketing department. And in so doing any money that is used in terms of a marketing expenditure is a legitimate business expense and all of that can be written off as part of their taxes.
PAGEWe'll go to Anna. She's calling us from Miami, Fla., hi, Anna.
ANNAHi, I know that -- I think it's generally agreed upon that the U.S. and Americans have a culture of giving and philanthropy that's (word?) us around the world and I have a two-part question. One is what do you think might be the role of these type of marketing programs to try and acculturate some immigrants that come to this country that might not be used giving and community engagement and of being kind of a soft way of engaging them in an initial effort to support causes.
ANNAAnd on the other hand, some of the companies that you've mentioned during the hour are global companies. And I'm wondering to what degree they are either engaging in this type of marketing and promotion in other countries or that their choice of charities in those countries might help to develop more of a charitable or (word?) culture in those communities.
PAGEAnna, what an interesting question. Is this a global phenomenon this new cause marketing?
VOLMERAbsolutely. I'm just going to talk about companies we talked about earlier. Go to -- type in SAP corporate social responsibility and go to their site. They list it by country by community. Microsoft does the same thing, Wal-Mart has programs in China, Wells Fargo has them through South and Central America. Most big companies, if you type in corporate social responsibility, CSR sustainability, you're going to get fact sheets and information about what they do. And they do, for the most part, try to regionalize it or localize it on a global level.
VOLMERThe other part to your question, I mean, about America's culture of giving, you know, that's one of the reasons that makes us great. You go to France and, you know, the government does it. They're the safety net. In the United States the government is not the safety net. Historically, it was the churches or the religious institutions that were the safety net. Government tried to play more and more of that role and has since backing down somewhat.
VOLMERAnd you do you see corporations, you see individuals, you see them stepping in and taking over where others left off. You know, I think the first thing that we have to do with the immigrants coming in is acculturate them to tipping. That was the worst part. You know, leave a 15 to 20 percent tip versus a two percent tip.
PAGEWell, you know, we're just coming out of this long recession, Stacy, and it's been so hard for so many Americans. And I wonder has that affected a willingness of Americans to contribute to some of these causes?
PALMERWhat's really remarkable is that giving has held up as a percentage of income fairly well. So people are still being generous, but charities have taken a very big hit as people are jobless or worried that they're going to lose their jobs. They are not able to give to charity. And we've had some of the deepest cuts in charitable giving that we've seen in history in the past two years. And there's starting to be a bit of a rebound, but one of the things that's happening is that smaller groups are really struggling the most.
PALMERThe bigger groups are starting to see a recovery, but there's a big difference between the haves and the have nots. And so it's incredibly important for people who are care about charity to think about the causes they care about and try to -- if they're able to afford to give. Most nonprofits really are hurting and nobody expects a recovery to happen until at least 2016 for most nonprofits. So it's a tough time.
PAGEWe've gotten a lot of emails about specific things and let me just read one from Linda in Pennsylvania. She says, "Every single day I click on Freekibble. Click the give and the six sites of the breast cancer site. It only takes a few minutes, but is it worth my time?" Is this worth -- you know, these things where you're supposed to go on a website and click and then a contribution will be made?
EINSTEINYeah, I mean that's fine. And there's also -- there's one called Free Rice, which is great if you have little kids and you answer questions and free rice is given through United Nations. Again, they're not asking you to buy something. If you're online anyway, it's going to take 10 seconds of your time and money is actually going to be donated to a charity, sure, go ahead and do it.
PAGEMara Einstein from Queens College, author of "Compassion, Inc." and we've also been joined this hour by Robert Volmer from Crosby-Volmer International Communications and Stacy Palmer from "The Chronicle of Philanthropy." Thank you all for being with us this hour on "The Diane Rehm Show."
PAGEI'm Susan Page of USA Today sitting in for Diane Rehm. Thanks for listening.
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