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?