Who benefits more? Companies or causes?

By Sean O'Driscoll and Marcia Stepanek

updated 3:10 p.m. ET Dec. 20, 2007

At the 2007 Advertising Club's Advertising Person of the Year Award lunch in Manhattan in September, some of the slogans for the Product (RED) brand were fixed prominently at the center of each table. “My Narcissism Has Gone Global,” said one; “Be A Good Looking Samaritan,” said another. Bobby Shriver, one of the two founders of (RED) receiving the club’s top award, was cheered on by his sister, Maria Shriver, and her husband, California Governor Arnold Schwarzenegger. Organizers projected a slideshow: gaunt, skeletal figures replaced by photos of the same people after (RED)-sponsored HIV treatment — healthy, smiling, double their weight, and earning their own money.

Product (RED), an AIDS fundraising effort co-founded by U2 singer Bono and Santa Monica, Calif., Councilman Shriver, has taken Madison Avenue consumerism to African AIDS clinics. With the help of corporate partners American Express, Apple, Armani, Converse, GAP, Hallmark, and Motorola, the campaign has raised tens of millions of dollars for the Global Fund to Fight AIDS, Tuberculosis, and Malaria, a joint government/corporate initiative established in 2002 at the urging of then-UN Secretary General Kofi Annan to increase resources to fight three of the world’s most devastating diseases.

The idea behind (RED) is simple: persuade youth-oriented brands to produce a Product (RED) line, charge them a licensing fee, share the proceeds, and then (RED)’s share of the profits go directly to The Global Fund — no heavy overheads, no nonprofit bureaucracy. With celebrities dripping from the cause, it attracted major corporate interest. But 18 months into its existence, (RED) is still struggling to define itself — and has yet to tell consumers precisely how much of their donor money is getting to the needy.

The founders of (RED) are unabashedly unapologetic about it, and don’t seem to know, nor care all that much, whether their corporate partners are benefiting more than the HIV-positive mothers (RED) is trying to assist in Africa. What matters, they say, is not a strict accounting of that balance but rather that (RED) is able to siphon off some consumer and corporate dollars for a desperately necessary cause. “When you see people dying and you realize the money could go at any moment, I don’t really think too much about whether a company is taking advantage of me,” Shriver told CONTRIBUTE in an interview. “You’re giving me 50 percent of your profits? Nice to meet you. Congratulations. Have a nice day. And you’re going to run all that advertising that says there’s an issue called AIDS in Africa? God bless you.”

'Definitely not a charity'
But is (RED) simply a short-lived marketing gimmick that backlights celebrity careers or is it an innovative approach to fundraising in which the deepest desires of capitalism and philanthropy finally find each other? The Wall Street Journal was forced to issue a correction earlier this year when it called Product (RED) a “nonprofit.” (RED), itself, says it’s somewhere between a “nonprofit” and a “forprofit nonprofit” — but it’s “definitely not a charity,” says President Tamsin Smith.

Daniel Berehulak / Getty Images file Product (RED) was co-founded by Santa Monica Councilman Bobby Shriver, left, and singer Bono, shown here posing during the May 15, 2006, London launch of a (RED)-branded Motorola phone.

Certainly, a brand that raises money for a good cause by combining the mutually beneficial support of philanthropy and the marketplace sounds like boilerplate cause marketing — the type used so effectively by the breast cancer pink ribbon campaign to raise millions of dollars each year. “(RED) is really no different than the Pink campaign for breast cancer with its product and celebrity endorsements, and that’s okay,” says Trent Stamp, president of Charity Navigator, which rates the spending practices of 5,000 nonprofits. Yet where the Pink campaign is about covering as many bases as possible with profits gained from the critical mass of many different products (Pink-ribbon wine, Pink-ribbon yogurt, Pink-ribbon gummy worms, and so on), (RED) has been daringly exclusive and surprisingly secretive in disclosing how much its cause and corporate partners each benefit. Does (RED) provide the kind of marketing advantage companies say or think that it does?

MORE FROM GIVING

Giving Section Front

Profits for a better world Ohio charity sues feds Economy dives, thrift shops thrive Scientist warns cash woes 'devastating' to science Clinton to stump for stem cells Petra Nemcova's heart for children Woods' caddie raises funds for children Giving Section Front   Add Giving headlines to your news reader: