Every year, hundreds of billions of dollars are spent promoting and advertising goods and services. While most are straightforward and obvious in their goal (to get you, dear consumer, to use the product), others are a little more creative in nature. Take, for example, philanthropic efforts that double as business promotion. Three companies taking a unique (or controversial, depending on how you look at it) approach to marketing through charitable work are Domino's Pizza (NYSE:DPZ), Pfizer (NYSE:PFE), and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL). Important lessons can be learned for investors looking to make a positive difference in the world with their money.
Saving roads, saving pizzas
In a point for libertarianism, Domino's Pizza has decided to do its part to help fix America's failing infrastructure. Potholes in particular have the world's best-selling pizza brand concerned. According to the company's new "Paving for Pizza" campaign, a rough commute prevents many pies from reaching their end destination safely.
Domino's has already helped four cities fill in some craters: Bartonville, Texas; Milford, Delaware; Athens, Georgia; and Burbank, California. The scale of work has been small so far; Athens received the most help, with 150 square yards patched. The program could be expanding soon, though, as concerned citizens can currently nominate their city for a grant at pavingforpizza.com.
No doubt Domino's has lost revenue from an errant driver falling into a pothole and the subsequent filing of a "damaged pizza claim." However, the more likely reason for the campaign to smooth out America's roads is some positive PR and advertising. Repaired potholes get painted with a Domino's logo, and road crews fixing the streets don the pizza chain's red, white, and blue colors. The program is sure to drum up a few more orders in benefiting cities and keep a few more pizzas out of harm's way.
Curing disease...for free?
The pharmaceutical industry consistently ranks as the most hated among consumers, with only the Federal government receiving more ire, according to surveys conducted by Gallup. It may come as a surprise, then, that pharmaceutical companies also rank as some of the most charitable, giving away hundreds of millions of dollars in drugs and cash contributions to charities. One of those companies is Pfizer, which says it donates billions of dollars a year in medications and cash.
One area of note is the company's work to end trachoma -- an infectious eye disease that can cause pain and irreversible blindness if not treated. Several hundred million people live in areas affected by trachoma. Through the International Trachoma Initiative (ITI), which it co-founded with the Edna McConnell Clark Foundation, Pfizer has donated 500 million doses of its antibiotic Zithromax to treat the illness, and it has promoted education on facial hygiene and good environmental practices to reduce transmission.
Since 1998, when the ITI was established, the company reports that it's treated over one hundred million people in 33 countries. That's a big impact on communities that deal with poverty due to this eye affliction. Those gallant efforts haven't helped Pfizer live down the angst here at home, though. Critics argue that big pharma's ability to choose which diseases are treated for free isn't fair, while other sky-high drug prices in more affluent areas essentially foot the bill for what amounts to a public relations campaign.
Then there are questions as to how drugs get priced in the first place, a complex process that takes into account factors like economic impact if the disease is cured, and available alternative treatments. Despite the controversy, pharmaceutical companies like Pfizer can benefit by curing diseases for "free" in less affluent but emerging markets with higher pricing elsewhere, not to mention the tax benefits gained from making the donations.
Educating the masses
Improving the quality of and access to education is a worldwide concern, and Alphabet's Google has been trying to help. Through its Google.org charitable arm, the tech giant has a five-year goal to award $1 billion in grants to nonprofits, many of which do work in the global education space. The company's donations have gone toward things like book translation, digital lessons and curriculum for teachers, as well as offline lessons for kids who don't have internet access.
Lots of companies support education, which is a good long-term business practice. Educating the masses improves standards of living, which in turn increases the chances that beneficiaries will end up using a donor's products and services. In many cases, though, Google has taken a unique approach to supporting education. A few years ago, an interactive "poster" Google set up in San Francisco allowed people to vote on which local causes Google would donate to.
More recently, the tech giant has doubled down on its direct support of education in the classroom itself. Through its AIY Projects segment, Google is selling inexpensive kits designed to teach kids how to build and program artificial intelligence devices like smart speakers and cameras. The idea is to enrich science and technology curriculums, especially in primary schools. A nice byproduct for Google, however, is that the initiative gets kids working in its ecosystem of software early on, which could translate to loyal software engineers and programmers down the road.
The benefits of marketing and promotion through philanthropic activity are debatable and sometimes controversial, but a creative campaign that creates buzz and positive feedback from the public can be a winning strategy for many businesses. It can also attract the attention of investors who are looking to put money into businesses making a positive impact on the world.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Nicholas Rossolillo and his clients own shares of Alphabet (A and C shares) and Pfizer. The Motley Fool owns shares of and recommends Alphabet (A and C shares). The Motley Fool has a disclosure policy.