The (PRODUCT)RED Campaign is certainly causing a lot of buzz.  There was a letter on the Red Campaign in the NY Times 2/15/2008 from Jennifer Howse, President of the March of Dimes.  Her main point was about the transparency of the level of donations given as a result of purchases of RED products from participating companies.  “Red participating companies would be wise to initiate a high-profile announcement of their annual contribution in the aggregate. No one expects companies like Gap, Dell or Armani to disclose proprietary sales data — but more transparency in reporting contributions could help remove doubts. And it could help sustain this interesting and productive approach to corporate social responsibility. ”

I totally agree with her sentiment about this.  As I mentioned in my previous post about Hallmark, they have clearly posted on their website that they contribute 8% of the net wholesale price to the effort.  I went back to their website to do a little detective work to find specific figures for how much they actually donated to (PRODUCT)RED last year.  The Hallmark website has a community involvement page which lists RED as one of its partners.  When clicking on the link, a press release from October 12, 2007 announcing the start of the partnership pulls up.  The release talks about the overall amount of money generated by the campaign but gives no specifics on Hallmark’s contribution as this is the announcement of a new effort by the company.  I hadn’t realized Hallmark has only been part of the campaign for four months.  It does, however, state “Eight percent of net wholesales from all Hallmark (PRODUCT) RED products will go to the Global Fund. For the consumer, this means the purchase of one (PRODUCT) RED Card with Sound (retail price of $4.99) will result in a contribution equivalent to a single-dose treatment used to reduce the risk of transmission of HIV from mother to child during childbirth.”  So, next year Hallmark should have some specific figures to share.

Next I went to the Dell website and found their press release from January 28, 2008.  It states, “With each purchase of a (PRODUCT) RED branded Dell personal computer including Windows Vista Ultimate (PRODUCT) RED, Dell and Microsoft will make a combined contribution of $50 to $80 – depending on the PC purchased – to the Global Fund. Purchase of a Dell (PRODUCT) RED printer generates a $5 Dell contribution. One hundred percent of the funds contributed go to Global Fund-financed grants in Africa.  An $80 contribution generated by the choice of a Dell (PRODUCT) RED all-in-one PC with Windows Vista Ultimate (PRODUCT) RED is equivalent to more than six months of life-saving antiretroviral treatment for an individual living with AIDS in Africa.”  So that is pretty clear.  Again this is a really new partnership so there are no figures yet for how many dollars are flowing to the campaign.

So what about some of the other companies?  I went to the RED site to figure out who else is a partner so I could keep digging.  Motorola became a partner in 2006.  From their Corporate Responsibility page, I linked to a May 7, 2007 press release on their website says, “$30.8 million donated to charities and good causes by Motorola and the Motorola Foundation — In 2006, the company became a contributing partner of (PRODUCT) RED to help fight HIV/AIDS through mobile phone sales, mobilized employees to community service through its first Global Day of Service and inspired the next generation of inventors by funding initiatives that boost science, technology, engineering and math education.” The figures are not RED specific however so I went to their full Corporate Responsibility Report to see if I could find any figures.  I did!  In 2006, they report having contributed $12 million of which $7 million came from RED phone sales plus another $5 million from their foundation.  On Page 8, I found the following.

That is a lot of money considering, “In the US, a $8.50 contribution is made on the sale of the red MOTORAZR V3m phone. In the US, a $2.50 contribution is made on the sale of the red BluetoothT Headset H500.”  Having now at looked at many of the other participating companies’ sites, I would like to applaud Motorola for making their data so clear and easy to find.  They get the prize!!

 The Gap page on the RED website states 50% of the profits from sales of items go to the Global Fund to help eliminate AIDS in Africa.  Gap has its own RED pages, as well.  I went to their Social Responsibility pages and found the link to another RED page.  There is information in A LOT of places – but I am still having trouble finding what I am looking for!!!!  I went to the Social Responsibility Report’s community investment pages and found figures for other initiatives but not RED.  So I gave up.

Armani contributed an average of 40% of gross profit from the sales of RED products to the Global Fund.  I couldn’t find any information about dollars contributed on their site or in their Annual Report but I can’t claim having done an exhaustive search.

American Express RED  gives 1% of your total spend to the Global Fund.  Unfotunately, this card is only available in the UK at this time.  For more info, click here.  Too bad we in the US can’t get one.  The monthly statement tells you how much your personal contribution to REDMoney was from using the card.  I looked around on their American Express RED site and in their Corporate Citizenship Report for details.  Couldn’t find any figures though RED was mentioned on page 22 of the report – they may be there somewhere but I couldn’t find them easily.

The Global Fund website does give pledge dollars but aggregated amounts for PRODUCT RED.  Couldn’t find any company specific data there either. 

OK…so I now TOTALLY agree that it would be a good idea to add a page to the www.joinred.com site that not only tells the aggregated total contribution by all partners but also breaks out the contributions from each individual company partner.  Not many people will go through what I just did to try to figure it out and it IS frustrating to come up empty handed in many cases after all that effort.  Please…make it more transparent starting now!

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!!