Intending to Do Good – Corporate Donation and Public Opinion

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Intention is an interesting concept philosophically. The question is I seek to answer is this: Does having an intention other than just charity matter if the outcome produces a social good? My immediate reaction was, yes this does in fact matter. For our intention shades everything going into a project or initiative, and things selfishly intended are not as beneficial as they could be. What then is to be said about an action with unintended consequences? There are many examples of products or services being created due to a latent need found purely by accident, or technologies arising from another research project. Michael Hobbes uses PlayPump International, a company who made water pumps powered by children playing, as an example of good intentions but a failed execution. They raised a huge amount of money, and instituted their idea in many towns. Unfortunately, though well intended, the pumps created issues. In some towns, locals were paying children to play with the pump to get water. Others show women pushing the pump around to get their water. Obviously the company did not intend for this consequence, but does their intention matter since these things did happen? Not for some people. Critique of this idea as well as others with similar unforeseen outcomes is high, and in hindsight, there are obvious mechanisms to used for evaluation to prevent such outcomes. But they wanted to do good. They set out to do good.

 

Which brings around the point of the authors in this post. Themed as “With the Best Intentions,” these authors all focus on different pieces of the nonprofit sector, highlighting this that work and things that do not. Mark Manson in his article Everything Is Fucked and I’m Pretty Sure It’s the Internet’s Fault, he explores the intentions of the internet. He said “There was a near-utopian level of optimism during this time. Technologists envisioned a highly-educated global population that would tap into the infinite wisdom available at their fingertips.” This is not the internet we see today. What our internet looks like is Kim Kardashian, Donald Trump, and cat pictures. The internet has done a lot of good, too. It allows the instantaneous sharing of information, and it allows us to reach people on a grand scale. Manson argues however, the internet does the opposite. The internet allows us to find our tribes and seek comfort, Manson says “The internet in the end was not designed to give people the information they need. It gives people the information they want.” This is a problem. It allows people (including myself) to retreat to the safety and comfort of an echo chamber instead of having a continued and diverse conversation. When we look at charities online, there are horror stories and success stories abound with many organizations. Scathing reviews exist for almost anything now, and it’s difficult to figure out what is true and what is not.

 

My contention here is that intention, when considering charitable donation, does not matter, to a point. Basically, if an entity (company or private individual) wants to fund charitable organizations, this should not be looked down on. This is my opinion, and seek to support it further. Take for instance the product(RED) campaign. This is huge, and to this point, has raised $465 million dollars for charities. A criticism of this charity during for some time was the limitation of their effects. During its inception, the Global Fund was only targeting a few countries in Africa, but now it has expanded affect to over 100 countries, and also gives money to support local initiatives. Their goal is to end the AIDS epidemic in the world by providing treatment, prevention and education. The major criticism of this organization centered around its income source, using consumerism to bolster charitable donation. Some even said it was stealing donations away from other organizations with similar missions, whilst failing to provide relief on the scale necessary. Since such critique, it seems as if they have expanded, according to their site, to a much wider reach than in 2010, but an important consideration remains—their funding source is still the same. Another point to make is this: there is no precedent for corporations making donations, save donations of profits directly to organizations. By extending this to consumerism it is a bit questionable, but ultimately, they do not have to do anything. This argument is weak, but still true. Previous to this, what percentage of sales went to charity? Marginal in comparison I’m sure.

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Controversial? Most definitely. But, is use of this revenue channel bad or good? It’s hard to say, but this is unfortunately why intention becomes a large part of this distinction. You can frame the idea in a few ways. For instance, RED was created because GAP and Bono were hoping to provide social good through a new revenue stream. It’s certainly logical in hindsight; allowing consumers to choose a specific product bearing the logo and color of product(RED) and a portion of the proceeds go to charity. That’s great; it makes charitable donation available wherever these items are sold. On the flip-side, the enrolled companies are using this as a veiled publicity stunt to further their image with the public. They use this good intention to make themselves look better than other companies with prospects of gaining an edge on the competition. Because after all, the world runs on emotions–the things causing people to donate to charities in the first place. We know companies are aware of the weight of these actions.

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The intentions of this movement are good, at least in part. The product(RED) campaign has raised money for the Global Fund. No one is disputing this. They have delivered on their promise of products with their brand giving profits to charity. They have also allowed private companies to increase profits by marketing with product(RED). The intention seems to be selfish in nature, and it can be a struggle to see what good may come out of this. What if instead, the real effect, though some years removed, is a precedent of charitable donation from for-profit companies and corporations.

 

In Alex Holder’s Sex Doesn’t Sell Anymore, Activism Does article, he describes companies like Lyft using charitable donation to a public cause to outstrip the user base of their direct competitor: Uber. Uber responds in kind by making a donation larger to cover their loss of consumer base and to cleanse their public image. Holder quotes Will Fowler as saying “Brands are allowing people to pat themselves on the back without them personally having to sacrifice anything.” The defining piece of charity is not self-sacrifice, it is the voluntary help. So, is the move to donate to charity for an overall profit for the company, and an overall net good, a bad thing?

 

My opinion is no. At the Austin Center for Design, the faculty teach and believe in the idea of a “social” business. A self sustaining profitable business also producing a net social good from its interactions and/or product offerings. Muhammad Yunus describes social businesses as connecting to both the selfishness of humans as well as their selflessness simultaneously. The goal of the business is to grow and scale, maintain a profitable margin, while also providing a social good or service to address a specific social problem. Seemingly, this is what product(RED) is by definition. Their model is taking profit made from product sales or credit card transactions and distributing the money made to their non profit organization of choice. It’s a simple value proposition, and to this point, it has been succeeding. Scaling and growing a customer base as well as increasing donation and the ability to make change for The Global Fund.

 

If we think about the other businesses who fuel product(RED), their primary goal is profit, but they also have a social good packaged in as well in offering the choice to donate by buying certain products. Whether the intention is to publicize their efforts, or gather a larger customer base, the question remains–is it not still a social good? When first considering this, it seemed to be a less than well intended campaign, but as I read Jon Kolko’s Design Strategy, Product Management, Education and Writing, I found myself conflicted. He states “[The future for designers] …lies instead in encouraging behavioral change and explicitly shaping culture in a positive and lasting way.” The intention of product(RED) could be a beginning step in the right direction for all business. As with Uber and Lyft competing with donations, other companies have joined the repertoire of donors. Amazon with their Smile campaign, alongside many others. Charity is possible alongside consumerism; in fact it works pretty well. Now, all told, none of these organizations are in the top 100 of largest recipients of donations, but the amount of money they are raising is certainly not trivial. The product(RED) campaign has enabled the Global Fund to fund local charities all over the world to address the issues at the ground level by the people in the communities. This model could be a tipping factor for other businesses ensuring their profitability and wealth is used in part to fund social initiatives around the world.

 

If implemented properly, models like these, percentage of purchase, a percentage of profits overall, etc, would create a large sum of money for charities. It would also be a reminder that everything you buy has a portion going to charity. There are obvious potential downfalls. The number of normal donations could fall dramatically. If people are getting their warm and fuzzy feelings from normal purchasing, why would they donate directly to the cause? Arguably, knowing everything included donation might be a catalyst to make people more charitable overall, and be more mindful of what we are buying and where our money is going. Behavior change is difficult, but much easier when prevalent. If you give people the tools and the precedent, they will adopt in kind from the scaffold built around them.

 

There is a lot of criticism for Amazon’s smile movement, similar to how Phu argues disqualifies product(RED) as a truly beneficial initiative. My question to her focuses on the final sentence of the article, which sounds like a call to action, “Ultimately it means that individuals need to start taking personal agency to advocate for social change and look into the how their consumption may impact others.” If these campaigns allow people to see how their consumption can impact others, why not start there? Why not have consumers push for the increased donation of corporations and for profit companies? Why not make this an accepted and necessary practice? If the expectation is that all companies will partake, then it may gain traction and proliferate. 2015 was the most generous year from the United States, with around 373 billion dollars raised for charities. The highest portion given was from individuals, at 264.5 billion, and corporate giving placed last at a mere 18.45 billion, even though their profits are far higher than the net profit of the individuals in this country. The money and capability is there, but the expectation or, better yet, requirement is not.

 

The next question is: how do we decide who gets the money? Money is great, but when it’s thrown into the wrong programs, the effect, dollar for dollar, diminishes. The intention of charitable donations is to make a difference in the lives of whomever the organization targets. Their execution defines how successful their endeavors are, and the hope is as much money donated as possible goes to the end recipient of the aid. We analyze intentions and the potential executions and invest that way. Unfortunately, the results are not always as projected. From small organizations just starting out, to large organizations who have been doing aid work forever, there are diverse ways of implementing solutions to the community at large. Some organizations like the PlayPump story start out successful in a single small community, scale up operation due to public support, and fail in other markets because the context and need is different.

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In Michael Hobbes’s articles Stop Trying to Save the World, he gives us a concise understanding of his view when he says “What I want to talk shit on is the paradigm of the Big Idea—that once we identify the correct one, we can simply unfurl it on the entire developing world like a picnic blanket.” Here, Hobbes is calling out organizations for not testing their solutions, by hoping their method will apply to everyone everywhere. Unfortunately organizations do not always take into consideration the human component of the systems they are trying to impact. They believe, our method will work for everyone because it works for us. The push needs to be funding companies who show the ability to adapt to the level of diversity existent in human cultures. Not only does this take practice, testing, and consistent reflection, but it also may take organizations being smaller or paying more rigorous attention to outcomes.

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New story community pictured above.

For this reason, organizations like New Story, who builds housing currently in seven cities in Central and South America, are wildly successful. New Story makes connections on the ground where they plan to take effect, and work with the local governments and organizations to build in the best locations and build the most effective forms of housing. Not only do they help the communities they go to by giving them shelter and building homes, but they also hire local workers which also bolsters local economies. Adele Peters tells us how New Story built 151 homes in Haiti with a much smaller budget than the six home producing initiative made by the Red Cross costing $500 million. This story highlights what is wrong with the nonprofit industry: there is not enough communication. Whether it is organization to organization, or organization to community, the channels of what will work and what is not working are broken. When you consider the transparency of New Story’s practices compared to most other nonprofits, you see a stark contrast between the moving parts and money understanding from an organization like New Story versus Red Cross. The effectivity and efficiency of the smaller organization is huge in comparison because they are able to dive deep to see what matters instead of using established business channels to solve a new problem. The highlight here is that a larger organization takes time to adapt to a new situation and can afford to fail. But what cost does their failure bring? In this case, there is an obvious net negative as funds were not appropriately used for housing and furthermore, did not make a dent in the problem of 60,000 displaced individuals. Currently, the Global Fund, the recipient of the funds from product(RED) does just that. Not only do they fund their own projects, but deliver funds to other local organizations to extend their reach to as many areas as possible. They are changing with the criticism they receive, and are making sure their solutions are applicable to as many people as possible. They are moving in the right direction.

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If efficacy starts to deteriorate within organizations, why not push for smaller models or for a model more akin to what the Global Fund does? Or give money directly to the small nonprofits like New Story. Their models of empowering local groups and local people to do the work they need within constraints they understand is more effective than throwing money at a situation and hoping for the best. Jessi Hempel explains this well in The [Human] Codebreakers when she explains how Jan Chipchase and Serota undertake research projects. She says that Chipchase “believes the problem lies in their intent: Instead of entering new markets with an open mind, they approach with a strategy in place, then look for the people who prove their theories right.” In the nonprofit world, these strategies, even when considering providing for the most basic needs, can lead to failures like PlayPumps or the Red Cross housing initiative in Haiti. I’m not discounting the efficacy of these ideas, either. The Red Cross does many things well, and it is an incredibly important organization. However, failures give us the chance to learn and grow, and hopefully these situations provide their leadership with a learning experience on how to approach projects in the future.

 

The need for charity is real, and companies are approaching this from a variety of ways. From using increased prices on consumer goods for a cause, or taking a small portion of an ATM or transaction fee, to nonprofits being funded by the people of a country, product(RED) is trying to help. This was the intention, and it was well executed, and has raised a decent amount of money. Their charity is doing great work. GAP’s intention was to sell products that would help this effort, but also profit. Their intention was fulfilled on both ends, and the question was: Does it matter if there is a profitable intention? No. Not really. The consensus seems to be it would be better if it were just a donation, but they are increasing money delivered to a cause. The next question we sought to answer is: who should get this money? The answer to that is much more straightforward: the people who can recognize where it’s needed. Not a building corporation here, or a developer from another country. Hire the most local people and find people who understand the true needs, not only of the people and their culture, but also those who have fluency in the local regulations and laws. Simply put, we need to be taking all of the money we can from anyone who is willing to give it. If we can trick other companies to do the same and contribute by having charitable contributions be publicized, let’s do it. After all, they are the smallest contributors to charities in the United States, making up only 4% of the donations from the US. They have the power to do more, to donate more, to make a difference in countless lives, and they should be. They should do it by fueling efforts to understand the culture and by uplifting the local people instead of applying a generic solution to every area and hoping it sticks. We need to treat people like people and seek to understand them. Use our skepticism and our ability to ask why to truly understand. This is how we will make a change for the better in the world, this is the behavior change we need. Ask why and seek to truly understand.