CSR Trends: "Consumer Driven Aid" For Haiti
Remember Haiti? Okay, good. Just checking. While it’s been hardly 4 weeks since the 7.0 magnitude earthquake rocked Port-Au-Prince, destroying over 200,000 lives and an entire capital city, the media cycle has already seemed to move on. It’s back to health care, elections, tea parties, and the economy.
Lives have been lost, families torn apart, people displaced, and now what? As the first massive wave of relief has passed, and corporations have pledged their initial aid (over $130 million thus far), I’m sure some might be planning their next move to help in the reconstruction efforts by offering more financial, technological, and expertise-based assistance. Yet some might have moved on to their next “Socially Responsible” initiative. Some may be returning to business as usual, patting themselves on the back for being able to give $1 million to Haiti in a (post?) recession time.
Many Americans and the companies they work for immediately pitched in resources to help Haiti, and with every catastrophic event that becomes a catalyst for widespread giving, it’s worth stepping back and examining the trends.
In the case of Haiti, we saw the growth of a corporate social responsibility strategy that intertwines the interests and efforts of both individuals and corporations- we’ll call it Consumer Driven Aid. Once upon a time, people would give for the sake of giving, out of compassion for those in truly desperate situations. Companies would give because they felt it was their responsibility to society to set an example (or they just wanted to look good.) While the incredible outpour of support for Haiti is testament to the fact that giving for the sake of giving certainly hasn’t vanished, corporations and consumers are engineering new ways to mutually benefit from corporate philanthropy.
To put it bluntly, we’re all starting to get a better ROI (Return on Investment) on our donations.
The rise of Consumer Driven Aid highlights an increasingly popular model of corporate philanthropy; one that creates a co-dependent, cause-based relationship between brands and consumers, with the end result being consumers helping nonprofits and receiving something tangible in return from a brand. The more consumers engage, the more money is given.
Let’s examine one of the most recent example of Consumer Driven Aid:
Ralph Lauren created a polo called the “Haiti Relief Polo”, of which 100% of the proceeds go directly to relief efforts in Haiti through United Way Worldwide Disaster Fund. The Polo, which is offered in 5 styles and multiple colors for men and women, sells for $98.00.
- The Haiti Relief Polo can effectively be tagged a good CSR campaign for Ralph Lauren, since they are donating 100% of the proceeds to charity. Needless to say, this makes them look like a “responsible” brand and reinforces a positive brand image.
- The shirt probably only costs a couple of dollars to make, so while Ralph Lauren isn’t giving much out of pocket, it appears to be a significant amount since the markup for a “Ralph Lauren” product is so high. I’m sure this also comes in handy for tax write offs.
- Ralph Lauren doesn’t dictate the amount given; it’s up to the consumers. So if no one buys the product, they can at least say they tried.
- If a consumer is going to make a $100 donation to a cause, they might as well get something for it, right? By purchasing items in which 100% of the proceeds go to charity, consumers basically see it as getting a (sweet) return on their donation. Or, if they were going to get a polo anyways, now they can feel good that it went to charity as well.
- The polo says “Haiti Relief” on it, so they get the conversational value of explaining that their purchase went to help Haiti. This also benefits Ralph Lauren.
- The only downside is that consumers don’t get a tax write off- it is passed on to the corporation.
- The brand helps raise attention to the organization (United Way) and its efforts.
- They get a much needed fiscal contribution, that was generated from a collaborative consumer-brand interaction.
Consumer Driven Aid creates a very interesting new dynamic between Consumer, Company, and Cause. The consumer essentially makes a donation to the brand-vetted nonprofit, and gets rewarded for doing so. It wouldn’t be a stretch to call this brand-incentivized donations, or rewards based donations.
What Consumer Driven Aid effectively does is turn a brand into a donation clearinghouse for consumers- which is a pretty interesting paradigm shift. It’s wonderful for companies to be using their power and influence to help bring attention to and raise money for a particular cause, nonprofit, or humanitarian crisis. However it’s an entirely different story if consumers begin looking towards brands when making important decisions regarding their charitable contributions. What happens to smaller nonprofits? What happens to the personal feeling of connection to a single organization?
Lastly, will people begin to feel the need to be rewarded every time they make a donation? Will “consumer giving” become a primary force for giving, putting brands at the forefront of orchestrating philanthropic dollars?
I would love to hear readers thoughts……