The other day, I read about how several companies, including Apple (Nasdaq: AAPL), American Express (NYSE: AXP), Motorola (NYSE: MOT), and Gap (NYSE: GPS) have been involved in the (RED) campaign, raising millions of dollars to fight AIDS, tuberculosis, and malaria. This seemed like a good thing to me, and here's how it works: The companies join the campaign and co-brand certain products with the (RED) tag. When you buy such a product (such as a (RED) iPod from Apple), the company gives some of its profits to The Global Fund, to support health and community initiatives in Africa. It seems like a win-win proposition, no?
Well, according to some critics, no. A piece in Advertising Age claimed that the companies involved have spent some $100 million on marketing, while raising just $18 million for the cause. Hmm ...
That does look bad, but stop and think about it for a minute. If the campaign were cancelled today, the millions it has been raising would cease to materialize. But the companies would still be spending millions on marketing -- because that's what these businesses do. Meanwhile, awareness of Africa's problems and needs would be reduced, and people would still be buying their iPods and cell phones and jeans.
The campaign was started by Bobby Shriver and Bono. Shriver defended the model, explaining that "this marketing [money] would have been spent anyway, on other product lines. It never would have been (nor will it ever be) given to the Global Fund. We were able to divert existing marketing dollars for RED." That makes sense to me.
Meanwhile, elsewhere in the media, the campaign is being supported, and Advertising Age's numbers are being refuted. Some are arguing that $25 million has been raised and that the marketing expenses have been considerably lower.
What to do
So what should we make out of this mess? Well, if you ask me, any campaigns to increase awareness of vital global issues are good, and if they can raise millions of dollars to help, that's good, too. It's true that it's dumb to spend $2 to make $1, but if the $2 was going to be spent anyway, and a total of more than $2 will be raised, for the company and charities combined, then the math works out, too.
Companies have long been associating themselves with good causes, and while the motives may often be financial, the results can be rather effective.
We at the Fool have long been interested in innovative fund-raising for effective charities, which is why we established Foolanthropy way back in the early days of the Web (the mid-1990s, that is). Check out our nifty charity drive, which has itself raised several millions of dollars and is sponsored by Hilton Hotels (NYSE: HLT).
Gap is a recommendation of our
Inside Value
and
Stock Advisor
newsletters. Check out either service free for 30 days.
Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.
Terms & Conditions
RSS Headlines
Fool UK