Should a company expect to get back when it gives?

By Ed Nicholson

Joe Waters has an excellent post today, "Are Non-Profits Ready for the End of Corporate Philanthropy," in which he posits a new world order is emerging, in which corporations will demand ROI for their philanthropic engagement.  Joe’s post was prompted by a Scott Beaudoin post in PR Week, prompted by comments by Nestle SA Chairman Peter Brabeck-Letmathe made stating that he opposes corporate philanthropy because shareholder money can be misused.   So this discussion is going around recently, mostly focusing on cause marketing as an alternative to "pure" philanthropy. 

At Tyson, it’s been going around for a while.  You see, unlike a lot of companies that trade in higher margin products, our philanthropy budget is in relative terms quite modest.  We don’t begin with a large budget.   We’ve had to build what we’re doing in hunger relief from a very modest position, showing greater good, but also illustrating ROI for the shareholder resources we’re using.  We do that in a number of ways, including measuring media attention and stakeholder engagement.  As a result, we’ve been able to grow the pounds donated each year over the past ten years.  We haven’t done much cause marketing. 

It’s been our direct experience that proof of ROI makes philanthropy more sustainable.  It’s easy to give when profits are plentiful.  But when there’s red ink flowing, the "nice to do" things tend to get jettisoned quickly.  I believe our showing ROI kept the Tyson hunger relief efforts through some pretty tough financial times, from which we’re just now emerging.

Our marketing groups (at least at this point) don’t see a self-sustaining ROI from cause marketing.  They tend to perceive it as marketing application of philanthropy dollars, or as I’ve heard it described, "strategic philanthropy."   In my humble opinion (not necessarily that of Tyson Foods, Inc.), that’s all good and well as long as the marketing communications paid media spend doesn’t dig too deeply into the benefit to the recipient.  I recently heard the head of a large (extremely large) corporate foundation declare,  "I don’t like cause marketing because the resources allocated to the marketing are generally greater than those going to the cause."  Something to think about.   

So where do you think this is all going?  Do you like it/agree with it?

 

3 thoughts on “Should a company expect to get back when it gives?

  1. Megan Strand

    Wonderful, thought-provoking post, Ed, thanks.

    I’ve been thinking a lot about the philanthropy/cause branding distinction lately and you raise some incredibly good points about dollars being spent on marketing efforts taking away from dollars going to the cause.

    In my humble opinion, not every company should participate in cause branding efforts if it’s not a natural extension of their brand.  We all recognize that consumer expectations are shifting and more customers are looking for socially responsible companies that demonstrate an awareness for more than just the bottom line.  That said, authenticity rules supreme.  

    The trouble I see brands having with this is that, suddenly, philanthropic donations have to be spun into a "cause marketing" initiative…even if it really isn’t and even if it’s not a good fit for the brand.  And consumers cry foul.  Which is too bad.  Because shouldn’t we commend and respect philanthropic efforts in their own right?

    I guess my point is that if you’re a philanthropist at heart, fabulous.  Own that and communicate it well.  Don’t waste valuable time and resources dressing it up like a dog and pony show under the auspices of a "cause branding" effort.  We’ll respect your honesty and your generosity more in the long run. 

    Appreciate the discussion, thanks for continuing it!

    @meganstrand

     

  2. Joe Waters

    Ed, this is an outstanding post. I really appreciate your candidness about how Tyson views its philanthropic program and how cause marketing fits into the mix.

    One thing, and it concerns your last comment about the executive who said her concern with cause marketing is that sometimes more money goes to the marketing than to the cause. But that’s just where people miss the "marketing" component of cause marketing and still view it as a form of philanthropy.

    Product RED faced the same criticism a few years back. What people missed, however, is that in addition to being part of a marketing budget that would have been spent anyway, this spending on marketing helped propel RED to one of the top nonprofit brands in the WORLD in just a few short years. Think of how incredible that is–and the incredible amount of good that came from it. We owe those brands that joined Bono early a great debt. Instead, they’ve received nothing but criticism.

    This is why we need to continue to educated companies and consumers about what cause marketing is and where it fits in with other types of giving.

    Joe @joewaters  

  3. Jen @PhilanthropyInk

     

    Great post, Ed. Thanks to Joe for starting the conversation at selfishgiving.com.
    My initial reaction to this post was total agreement. If companies start measuring ROI on their donations in addition to the impact these donations have on greater good, the nonprofit world would be a better place. The strong, effective nonprofit organizations would survive and we would truly start solving problems.
    Or would we? Where do we draw the line when philanthropy is concerned? As an individual donor, if I only focus on how the donation I make impacts or benefits ME, is it truly philanthropy? I understand that individual and corporate philanthropy are two very different beasts, but we do need to consider the true sense of charitable donations. If we take away donors who give with no strings attached and no tangible benefits in return (individual or corporate givers), many nonprofits would not survive.
    This is the start of a great discussion and I look forward to hearing from many more corporate philanthropists.  
    – Jen @PhilanthropyInk

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