The 2009 Embedded Giving Challenge


(Photo by Roland. Flickr, Creative Commons)

It's that time of year again - giving season. Time to play: What is your favorite embedded giving experience of 2009?!*

While being asked to donate a dollar for [name your cause here] has become a year-round experience for anyone who a) shops at a store b) searches online or c) leaves their house, the "opportunity" to round up your bill for a good cause should present itself even more frequently in the mad dash to Christmas shopping that is the next 8 weeks. And shoppers this holiday season will no doubt have endless opportunities to choose between "Sweater A" and "Sweater B - the one that will save the polar bears."

After all, the $1.55 billion that companies are expected to spend on cause marketing (a 2% increase over 2008) is one of the few areas of charity-related spending that will show any increase in 2009.** NOTE: that is what will get spent on the marketing, not the amount that will go to good causes. It is notable that one can find very detailed predictions of the value of companies' spending on embedded giving but almost no data on how much money charities raised through these promotions.

So, let's get those stories rolling. Got a story about how many times you were asked to give in one shopping trip? Ever asked the cashier where the money really goes and gotten a particularly mind-boggling answer that you'd like to share? Or have you found a really odd partnership (pet food store and homeless person shelter? Electronic gadget and global warming prevention?) that made you scratch your head? Please send them in via the comments section, twitter (@p2173) or via email [lucy at blueprintrd dot com]. In true crowdsource fashion I'll collect them, post them, and let you - the readers - vote on them. Heck - I'll even let you the readers choose the categories for the voting - Most absurd? Biggest ripoff? Most asks in one day? You name it - I'll track it here in the first ever Embedded Giving challenge.

*Just to be clear: I think embedded giving is a ripoff. It puts far too many steps between donor and recipient, we have terribly lax reporting standards on what money is raised and where it actually goes, and the one true effect of this kind of giving is for an individual donor to give away their tax deduction to a company. I've been involved in the debate about embedded giving for years - you can read most of my blog posts on it here. I'll say it outright - I'm not promoting embedded giving as an effective donation practice. Still, if this post is like any of its predecessors I will get bombarded with emails from embedded giving platforms asking me to promote their version/product/tool.

**Source: IEG (sponsorship.com), reported on MediaPost, August 18, 2009. http://www.mediapost.com/publications/


13 comments:

David said...

Lucy,

I don't agree with your all embeddedd giving is bad point of view, but I do agree that some of these campaigns are poorly conceived and executed and that it would be great to have more aggregated information available on them.

Are you really arguing for the abolition of marketing funded campaigns that appeal to consumers who value company support of causes? Would you prefer, for instance, that each campaign that offers to give $1 per purchase to fight breast cancer or hunger instead try to drum up business by tying into a promotion with the latest sports star or movie release?

Or would you prefer that cause marketing campaigns be held to higher standards?

Eric said...

Interesting. I would disagree. I don't think embedded giving is a "ripoff"; there are those that give through embedded giving who would not give otherwise and I think that is a good thing. While people are busy shopping for endless unneeded items, why not take an extra buck from the consumer (said from an nonprofits point of view). I think it is important that people give more, even if they start with lower levels of giving (see 8 levels of Tzedakah). However, I do agree that giving a few bucks at the grocery store check out is not a sufficient way to fulfill the philanthropic requirement that I think we all owe each other in this world; and if somebody is using these small gifts/donations to satisfy that philanthrop-itch in attempts to walk away with a clear conscience and no commitment to give time, talents, or means anywhere else, I think they need to go further.

Lucy Bernholz said...

Thanks David
I'm not out to abolish cause marketing - that would be a fool's errand. However, I think there needs to be far better reporting about how much money is raised by each company and how much of it goes to the charity. This is a key place where greater transparency is needed. Companies can fund these efforts from marketing and advertising budgets. Sometimes they are doing it with their own charitably focused dollars - but how often? From a customer point of view it doesn't matter to me so much where the company's money comes from, but it does matter that I can't find out easily if any money, let alone how much, went to the charitable cause.

Other concerns I have:

Donors, also known as customers, have better options than giving their dollars to a cashier in hope that they go to a cause.

In the aggregate, is there a "zero sum" effect that these campaigns create, but can't answer? Do donors give less or more of their own accord because they gave at the cash register?

Nonprofits lose out - they rely on individual donors in the long run. They are building no relationships with donors through these deals - the company gets the "feel good" benefit, the donor never gets near the nonprofit, nor does the nonprofit get to create any kind of relationship to a donor...

So, in answer to your question - I'd like to see much better reporting and much greater transparency in this space. Only then will we know what it means for us as individual shoppers/donors, as nonprofits, and as a source of revenue.

It helps companies bottom lines and they spend billions on it. That we know. Not only does that not mean it helps anyone else(nonprofits or donors), personally, it makes me doubtful that it does. But most important - we don't know if it does.

Rambling a bit here - trying to respond while on the run. Thanks so much for writing in - would love to hear more of your thoughts...

Lucy

Lucy Bernholz said...

Eric

I wish I could agree with the assumption that "there are those that give through embedded giving who would not give otherwise" but how do we know this?

I don't know of any research that shows this is true or that these donors are giving more than they would if asked directly by a nonprofit.

For the sake of argument, assume they are giving a dollar they would not have given otherwise to a certain cause. They have no commitment to the cause, or to the organization. They may not even know what organization is theoretically benefitting or be able to remember the cause 20 minutes later when they are asked to give to another one at the next cashier. Admittedly, the costs of raising that dollar have been removed from the nonprofit itself - so if they see any of the dollar that is a net plus - in the short term. But that still leaves a lot of open questions in my mind.

Your thoughts?

Lucy

ERizzo said...

The one benefit to embedded giving is that such campaigns can raise awareness about a particular cause (The(Red)campaign, for example). However, from a financial standpoint, I agree with you entirely. Embedded giving campaigns lack transparency and are misleading at best. While consumers may feel positive about their purchases (and "contributions"), it is difficult for even the most conscious consumer to determine what percentage of the purchase price will go to benefit the cause/organization promoted. What, exactly, does the phrase "a percentage of the proceeds will go to benefit [insert your cause/charity here]" really mean? Is it a percentage of net profit, of gross sales? What?

Bryan de Lottinville said...

At the risk of being castigated as one of those "emails from embedded giving platforms", I would like to politely admonish you to perhaps apply your not inconsiderable grey matter to assessing the embedded giving and micro-donation landscape from the perspective of identifying best practices, rather than being satisfied to generate profile and discussion with a broad black brush.

We are a Canadian-based company that has developed a web services software platform that enables companies of all stripes to embed the opportunity for an optional, user-directed, receiptable micro-donation into their customer and employee facing online environments, such as e-commerce, loyalty, financial services, HR/benefits, etc. It is transparent, empowered, measureable and charity-agnostic, and otherwise addresses many of your often legitimate beefs around the practice you have coined. Our social mission is to embed this capability into so many environments that making a micro-donation to the charity of one's choice becomes as convenient and prevalent as leaving a tip at a restaurant. We think it is kind of cool, and hope to contribute to the "mass personalization" of philanthropy that is much needed.

There are of course reasons why even our approach is imperfect, and it will still only be as good as the campaigns and promotion around it, and is predicated to some extent upon people knowing to whom they want to give, but we believe it is embraceable by corporations, donors and non-profits alike.

Tim Ogden said...

I think there is minimal difference between transparency and abolishing cause marketing. If we had common sense rules along the lines of what Lucy describes:
1) Exactly what charity is getting the funds?
2) Exactly how much money is the charity getting from this purchase?
3) Exactly how much money is the charity going to get in total?
4) When will the charity get the money?
5) Are there any constraints to how the charity uses the money?

then the practice of cause marketing would quickly dwindle. While I of course have no data to back this opinion up, because there is no data to back up any opinions of cause marketing, I suspect that the reason that such transparency does not exist is because the answers would not paint a very positive picture.

Peter Golio said...

I haven't given this topic as much thought as you have, and 'rip-off' is a provocative term, but - after checking out a few of your previous posts - I think you make a strong case.
It's not clear that the "blurring of the sectors" is something we should celebrate, even though it may serve to reach people that would be out of reach otherwise. But why does philanthropy need a middleman or what you refer to as "too many steps between donor and recipient"?

grant said...

Your points are valid, but look at the field as if looking at foundation giving and saying it's a rip-off because of the high-level of bureaucracyand lack of commitment to funding general operations.

All giving needs to be transparent and accountable. Giving needs also to be an interactive process: If someone gives at the register, but don't choose a charity their gift won't connect them to the cause or the corporation; it's a lose-lose proposition. Embedded giving has its share of problems, but let's not throw the baby out with the bathwater.

Embedded giving has the opportunity to democratize corporate philanthropy -- which is traditionally driven by whatever pet causes a VP might have rather than focusing on the consumer's interests. It also has the ability to change the conversation between nonprofit and donor.

Both these hinge on choice. When a consumer stops to think where they want to give,that choice starts a conversation consumer to corporation and donor to nonprofit.. At once it get's outside traditional corporate giving and outside tote bag fundraising where the connection is one of sales pushing, rather than program pulling in.

But that takes choice, transparency, and accountability. The best way to do that is to professionalize the field. Organizations like JustGive and MissionFish are doing a great job of launching that effort.

Lucy Bernholz said...

Wow - thanks everyone for writing in. So let me try to take these incredible points in some kind of order:

ERizzo - re: "embedded giving raises the profile of a cause," even if not considerable money. Yes, in the best cases. No, I fear, in most cases. Think about the last time you were asked by a cashier to give to a cause. What was the cause? What was the nonprofit? I know I can't remember.

Tim - I agree completely.Especially with your concern that the reason we don't know how much is being raised is because its not meaningful from the nonprofit point of view. That said, I'd still like to see some data on it. In aggregate.

Peter - Yes, ripoff is deliberately provocative! Some philanthropic middlemen may add value - the ability of a community foundation to aggregate funds and do high quality due diligence for many donors at once comes to mind as a possible example. However, in the case of companies choosing a cause and taking your dollar to give to that cause - not so much.

Grant - thanks for writing in. I welcome your perspective - I'm sure there are better ways to do this kind of giving that do address the reporting issues (at least) - it seems to me that the more technology-enabled platforms should be better options for tracking the dollars - let's encourage them to report those dollars also - in easy to see and understand ways, like Tim describes...

However, I probably wouldn't go so far as to call this "democratizing corporate giving" as some VP somewhere is still choosing the cause but now he's giving it my dollar instead of his own...? And I'm not sure how embedded giving has the chance to "change the conversation between nonprofit and donor" when there is a company selling product standing in between them? Can you explain more, please?

Thanks - Lucy

Jennifer Olson said...

Hi, Lucy.
Recently I was at a national pet store chain, and when I was making my purchase, I was asked if I wanted to make a donation for animal causes. I asked what nonprofit they were partnering with, and the cashier couldn’t answer. I asked what kinds of work they were funding through this, and she wasn’t able to answer that question either. She seemed very uncomfortable that she couldn’t answer my questions. Needless to say, I didn’t make the donation. I wondered whether the store was training its staff about how their embedded giving program works.


Jennifer Olson

Matt in NYC said...

Hi Lucy,

what is your opinon of lands end program where you give your old coat fro a 20% coupon. bigwarmup.com ?

grant said...

Way late in the game to respond, but if there's full choice by the consumer for which charity the funds go to, no VP makes the decision (see: The Knot charitable favors program or JustGive's partnership with AmEx).

Even if there's mid-range choice (say 100 charities -- one example is WeddingChannel.com's embedded giving program) it's still getting us closer to consumer-driven philanthropy.

The most difficult piece of this is actually the somewhat-prohibitive costs to offering full choice.