Is strategic philanthropy really ethical?

thomas.jpgMy English muffin came with a pink ribbon this morning. Seems the folks at Thomas’ are doing a promotion with the Susan G. Komen Foundation — an effort that will contribute $100,000 to the popular charity while also supporting breast-cancer awareness.

The proliferation of pink ribbons in product-marketing campaigns has me wondering if “strategic philanthropy” may have gone too far. It has me wondering if charitable donations have become just another way to buy consumer preference — nothing more than an inexpensive advertisement, albeit one that helps folks in need.

Why would I question such a benevolent campaign? Isn’t that a classic win-win proposition for marketers and cancer research? Not necessarily.

Breast-cancer is the hot charity these days, and with good reason. The disease is on pace to kill over 40,000 Americans this year, almost all of them women. And because women buy some 80% of groceries and packaged goods, they’re the targets of the the pink-ribbon promotions. Companies across the land are hitching their wagons to “pink” — because it sells. That’s fine, but I’m troubled that so much of the cash flowing from strategic philanthropy/marketing programs is finding its way to one charity niche when others deserve consideration.

Would Alzheimer’s research sell English muffins? Maybe, but not like the “power of pink.” Lou Gehrig’s disease? The Lupus foundation? Don’t think so. It’s all about what the market will embrace, or I’m just way too cynical.

Husted & Allen looked at the issue on a more macro level versus one specific charity. I like the way they present the central question:

“Increasingly research in the field of business and society suggests that ethics and corporate social responsibility can be profitable. Yet this work raises a troubling question: Is it ethical to use ethics and social responsibility in a strategic way? Is it possible to be ethical or socially responsible for the wrong reason?”

It’s Monday. So maybe I’m just cranky. But I think the authors raise a point worthy of more discussion. It’ll be on the agenda of my Ethics class this week at Kent State. But I’m betting it gets little consideration in the corporate boardroom.


5 Responses to Is strategic philanthropy really ethical?

  1. This is an eye-opening Web site that I use when lecturing on cause marketing. Might be worth a look as you prep for class:

  2. Bill wrote: “Is it ethical to use ethics and social responsibility in a strategic way? Is it possible to be ethical or socially responsible for the wrong reason?”

    The answer to the latter question certainly is yes. But the answer to the first surely must by yes as well. Is there a moral or ethical requirement for a company to give money to charity? I would say absolutely not — the moral and ethical requirement of a company is to its owners. Indeed, especially in a publically traded company, there is a fiduciary responsibility that is primary to any other. Therefore, if a company’s management undertakes any action, it surely must be consistent with its primary obligations. Further, it can be argued that philanthropy (speaking of companies, not their individual leaders) should only be undertaken in support of a company’s business objectives.

    KeyCorp, the national bank, supports all kinds of organizations. Its geographic districts decide where best to lever the dollars they receive from corporate in their communities; at corporate some years ago the strategic mantra was financial education — though not at the exclusion to any significant extent of other charitable activities.

    Key used charitable dollars to convert unused branches to community financial centers, outfitted with computers, printers, internet access, and volunteers from the bank and from an organization that matches experienced retired business people with small businesses which need help. It funded a financial education center at a community college, and increased funding of the United Negro College Fund, establishing scholarship programs and internships in finance.

    Are any of those things unethical because they fit with KeyCorp’s business strategy? I would hope no one would say ‘yes.’

    There are many other examples, but perhaps we can suffice to say that despite the admittedly objectivist argument I present here, companies do perceive a value from their philanthropy — whether as an awareness booster or a “just feels good” perspective. If, as a shareholder, I note that philanthropy isn’t helping advance my company’s goals in some fashion, I’ve got to ask the question…. Otherwise, we’re simply using companies as surrogates for charities…

  3. […] marketing programs colored green, red, pink or purple. If this topic lights your lamp, I expressed other concerns about cause-related marketing back in […]

  4. […] is less about beneficence and more about currying favor with the marketplace. (For more, see my post from last […]

  5. Adam Harris says:

    “Strategic Philanthropy” makes the hair on the back of my neck stand up just a bit when I hear it. The companies that participate in this are looking for tax write offs and public support in my eyes. Maybe I’m not the most trusting person in the world, but is that fire person with his or her boot off in the intersect actually give my $5 to kids in need, or is the old fire engine getting a new set of brakes. I have heard so many stories about the minimal percentage of donations that actually make it to the intended subject that I would rather give a bum on the corner 5 bucks for and see him spend it on a beer, than have the red cross buy a ream of office paper with it.

    Anyways that’s getting of the topic at hand, back to ethics. This, to me, is a conflict of interest in the business world. While the good that the company is doing, raising awareness and money for a cause, is positive, is the underlying reason sales? Yes! We live in a capitalist society and nine out of 10 of these companies could care less about the environment, breast cancer, MD and so on. They want you in the store to say “oh Quaker Oats supports little lueage in my city, I’ll buy this over the other brand” and subsequently we pay 20 cents more for our selection.

    Lets revisit the J.D. Rockefeller example from the other day in class. Rockefeller made millions when millionaires were few and far between. So he donated a good amount of the money to various things of his choosing. He didn’t care who knew that he did it, because it was just the right thing to do. Along comes PR and tell J.D. to let the world in on his philanthropy. His image in the history book is for ever changed for the better.

    So these big companies that donate tens of thousands of dollars to charity wouldn’t do it if they didn’t have some value added bonus for spending the money on developing the ad campaigns to raise the money. If large companies were playing by ethical and moral standards they would give without the businesses related strings attached, like increased profits and sales. They would give like J.D. did before PR.

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