Where Bono Blunde(red)

A bad PR week for (Product)Red orchestrated out of San Francisco raises doubts about the prospects for a long-term sustainable charity campaign (sorry, business model) based on product sales without grassroots fundraising. 

This past week, AdvertisingAge (Mya Frazier) rocked Bono's world with a report belittling the results achieved so far by the (Product)Red program to support the AIDS efforts of the Geneva-based Global Fund to Fight AIDS, Tuberculosis, and Malaria (EIN 98-0380092 Form 990).  The headline claimed that the program's partners (Motorola, the Gap, Apple iPod, Converse, Georgio Armani, and American Express UK) have spent up to $100 million promoting it and yet the program has raised only $18 million. 

Paul Vallely, a British journalist who ghost-wrote Bob Geldof's autobiography and works with Bono on development issues, defended the program in the Independent UK, claiming that (Product)Red has actually raised $25 million and the costs are less than a third of those reported by AdAge (that would be $33 million). 

But the AdAge article was just one of a number of critical pieces that have popped up, wrapped up by this summary story (Bono Rebrands "Sexy" Africa, Nina Brenjo) in the Alternet blog, a project of the Reuters Foundation (UK registration 1082139, 2003 annual report).

It appears that Bono walked into a buzzsaw of bad press in part due to the efforts of a handful of PR and design organizations in San Francisco Bay area who put together the parody site buylesscrap.org.  The firms listed on the site are Words Pictures Ideas (Bob Davis), Mindful Public Relations (Debra Amador), and Romantic Static (Aaron Feiger and Ashley Marcinczyk).  The premise of buy(less)crap is that people should give money drectly to charity rather than purchasing consumer goods.   

What's fascinating to me is that Ms. Amador of Mindful PR lists in her bio that she volunteeers with the organization now known as Susan G. Komen for the Cure (I'll talk about its Form 990 in a bit), which is by far the reigning queen of cause marketing tie-ins (relating to breast cancer awareness).  Komen has been subject to a similar (though far less publicized) line of criticism in the book Pink Ribbons, Inc. that I talked about awhile ago (August 26, 2006). 

I noted then that the once-popular AIDS bicycle rides sponsored by Dan Pallotta's Pallotta Team Works were brought down in 2001 by a similar campaign against commercialization, while breast cancer fundraising athletic events and product tie-ins continue to proliferate pretty much without comment.  Now I'm wondering whether the buy(less)crap site could be something of a dirty tricks campaign in the war of Pink vs. Red. 

Be that as it may, a closer look at the Komen income shows what Bono is leaving on the table with his exclusive focus on fundraising tied to product purchases.  Komen's web site offers us a mocked up Form 990 that combines the results of the parent organization and its affiliate organizations in 125 cities.  (Go to the financial statement web page and click on "2006 Form 990 Foundation Consolidated Mock Return" to view or save the PDF file.)  Line 9 shows that the organization raised $48.6 million from local events, which also netted an additional $21.0 million.  Once you have invested in brand recognition, that's the kind of grassroots fundraising you can enlist.   

Moreover, without that grassroots support, it's hard to see how (Product)Red will be able to sustain sponsor interest:  as with any fashion, consumers and sponsors will want to move on to the next promotion. 

Another example we've talked about before is Jerry's Kids, the  Muscular Dystropy Association (EIN 13-1665552 Form 990) (Jerry's Kids & Biker Dudes, June 7, 2006).  Despite the prominence of the annual telethon, which raised $38 million in 2005, a wide variety of other local events raised an incredible $107 million.  When a well-known brand can yield this kind of grassroots support, why would an organization not pursue it as part of their brand strategy?  I doubt that any organization can sustain a contribution levels in excess of $100 million a year without some kind of local fundraising. 

So here are my (modest) suggestions to Bono:

• Build a grassroots fundraising structure to go along with the corporate product strategy.  Local music events provide an obvious basis for a grassroots fundraising structure. 
• Consider changing the focus from AIDS to saving kids from malaria, to avoid the anti-consumption vibe left over from the AIDS activists in the US and to emphasize the impact on kids.  (Maybe change from red to blue.) 
• Reach out to products sold in supermarkets, not just malls, to avoid the extreme seasonality that goes with discretionary consumer products.  And give consumers a charitable choice other than pink when they do their food shopping.   

Comments

[Debra Amador]

Dear "Underalms,"

Thank you for your blog entry, which further shines a light on the need for change within cause-related marketing. In response to your query, The BUY (LESS) campaign is an all-volunteer effort and not affiliated with any other organization. I did personally work on a cause marketing campaign that benefited the Komen Foundation a number of years ago. Having worked on this and other cause-related marketing efforts reinforces my desire to see standards adopted for all corporations and organizations that receive donated money through their affiliation with a cause. I also support the good will and intentions of groups attempting to make a difference. What I'd like to see is transparency with their financials...and the option for consumers to give directly without requiring a purchase.

Thank you for doing your part to make a difference.

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