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A Portion of the Proceeds?

A Portion of the Proceeds?

“It’s virtuousness as a marketing gimmick run amok. The potential for it to be a scam is huge.”
-Lucy Bernholz, founder of Blueprint Research and Design, a consulting firm specializing in non-profits.

December 14, 2007 —

Have you ever wondered what it means when a company claims that a "portion of the proceeds" from a particular product go to a cause like breast cancer research or the World Wildlife Federation? It's not always the easiest thing in the world to find out, as New York Times reporter Stephanie Strom found in her research for an article about so-called "embedded giving."

It turns out that in some cases, the companies making these pledges have no preexisting agreements with the charities they're promoting. The Times article sites an example in which the upscale retailer Barneys trumpeted a partnership involving multiple charities, some of which were completely unaware of the program's existence.

Such situations are not the norm, but there plenty of other reasons to be skeptical of "embedded giving." For one, there is very rarely mcuh transparency as to the amount of money donated with each purchase — brands like Newman's Own or Gap's (Product)RED are the exception, not the rule. Strom also raises the question of corporate tax deductions; are companies using these programs to set themselves up with massive tax cuts?

Most of these questions can only be answered on a case by case basis, but they are troubling and unless you can find specific claims made by the company in question, chances are they've got nothing specific to brag about. The next time the cashier at the supermarket asks you to add a few dollars onto your purchase for a charity, it might be best to decline in favor of sending a check later. That is of course, assuming you remember to send the check in.

 

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