My last post about (PRODUCT) RED talked about the campaign and what it is designed to do, as well as some concerns about how socially responsible the products being sold actually are.  (RED) continues to create a lot of buzz - I think the Super Bowl ads run by Dell computer last Sunday featuring their (RED) laptop brought the campaign front and center as it was such a widely watched event. 

Today there was an article by Ron Nixon in the NY Times  titled “Bottomline for (Red).”  Nixon reports that at one Rwandan Treatment and Research AIDS Center, things have much improved according to the center’s managing director, Dr. Anita Asiimwe.  She “thanks an unlikely benefactor for all these improvements: the American shopper.”  In his article Nixon states, “Just over a year ago, the rock star Bono started Red, a campaign that combined consumerism and altruism. Since then, consumers have generated more than $22 million to fight H.I.V. and AIDS in Rwanda by buying iPods, T-shirts, watches, cologne and most recently — as anyone who watched the Super Bowl knows — laptops, with all of them branded “(Product)RED.”  Nixon then goes on to express concerns that in spite of the clear good from the campaign in Rwanda  –33 new testing and treatment centers built, medicine supplies provided for more than 6,000 women to keep them from transmitting H.I.V. to their babies, and counseling and testing financed for thousands more patients — there are issues with the campaign.  “Detractors say Red has fallen short. They criticize a lack of transparency at the company and its partners over how much they make from Red products, and whether they spend more money on Africa or advertising.”

Depending on the participating company and their (RED) item, there are varying amounts of money allocated from the sale of the product to the campaign.  For example, “1 percent of all spending on American Express’s Red cards goes to the fund, as do 50 percent of net profits from the sale of Gap Red items and $8.50 from each sale of a Motorola Red Motorazr.”

So this is a tough one.  Where exactly is the line between doing well and doing good in the eyes of consumers and companies themselves?  Corporate advertising dollars are used to promote the Product (RED) campaign.  Consumers buy (RED) items made by various participating companies because they want to offer their support of programs in Africa to combat the AIDS epidemic.  And for every item purchased some percentage goes to fund the programs and services.  The company wins - it’s good for PR, reputational capital, and sales to be part of this high profile campaign that IS doing a lot of good on the ground.  The consumer wins - they get a cool product that makes a clear statement about their values and they know their purchase helps fund good things.  Obviously  the company is in this to make money - and why not?  If these products weren’t generating income, many would NOT be donating dollars at this level in a focused campaign as part of an alliance with other companies as a way to counter the AIDS epidemic.  I agree where it gets sticky is in the allocation of resources - how much of the sales earnings go to advertising and how much to (RED) programs in Africa.  But, it is a chicken and egg problem - less dollars for advertising probably means fewer sales which results in reduced dollars to give so fewer people can be served.  

I am all about “all win”, authentic, enlightened self interested involvement by companies with causes and nonprofits/NGOs.  I believe that we need a new paradigm for how better to tap business resources to make things happen locally and globaly to address the social ills of our times — and it’s not all about charitable contributions.  I believe the “unwritten requirement” of having a totally altruistic, charity mindset limits possibilities for businesses.  For me, there is a difference between individual philanthropy and BUSINESS PHILANTHROPY.  Strategic community involvement means building on the core business strengths, mission, products/services, and resources of a given company to make a unique contribution in the world.  Increasingly, companies are choosing to use a commerce model instead of “handouts” which I think helps with sustainability for the effort and introduces innovation into solving social ills.  Clearly the model of charitable contributions alone has not solved the world’s problems.  Let’s try some new things!!