Sunday, May 31, 2009

The final word on embedded giving

Ah, yes, embedded giving. It may just be the buzzword with the greatest traction of all time. And widespread discussion of it is back, this time in a series on the concept sponsored by Telecom for Charity - you may have seen posts on Causewired, TacticalPhilanthropy, SocialEntrepreneurship on, SocialCitizens, ThePhilanthropicFamily, or GiveWell.

These fine bloggers have asked all the right questions - does it matter, does it add up, is the right metric awareness, not dollars? So what do I have to add to this? Here are a few thoughts on wither it all:
  1. Embedded giving is here to stay* - as long it keeps working for the merchants. It is not inherently new (we've been rounding up our phone bills for decades now), it won't disappear without either a massive scandal or regulatory prohibition, and it will get more technologically "embedded" - witness search engines for good, telecom for good, etc..
  2. Embedded giving has grown so much that it now comes in different stripes - (a) The first kind is really about building a brand around a cause and using commerce to raise funds. I'd put Product RED in this category and note that it is its own brand. It is one massive awareness raising and fundraising campaign that can (sort of) report out on products sold, dollars raised and donated. (b) At the other end of the spectrum are campaigns that are much more about adding a little "feel good" to expected purchases - these are the campaigns where a merchant asks you to add $1 to fight childhood diabetes, MS, or breast cancer. You either give or not, take your groceries, and that is pretty much the end of it in terms of your awareness, the merchant's reporting, and so on.
  3. Embedded giving is just one more example of the blurring of sectors and roles between commerce, philanthropy, and public good.
Looked at this way, embedded giving is one of those data points that may mark an important generational turn. Maybe today's teens and kids who have seen so much embedded giving will grow up to expect that every product and every service comes with a charitable affiliation. If this is true they may run their nonprofits differently, run their marketing campaigns as Fortune 500 CEO's differently, and have fundamentally different expectations and beliefs about the relationships between commerce and charity, corporations and social responsibility. CSR won't be a "new concept" for them, it will be basic management practice.

This would be one more ripple in the shifting expectations of sectors. Almost twenty percent of the 2009 Harvard Business School graduating class signed a voluntary ethics pledge that touches on corporate responsibility. This is the age of social enterprise, of American youth and teens with a heightened volunteer and service ethic, of the National Service Act, AmericaForward, Office of Social Innovation and predictions that "recession era" teens will focus their careers on public service jobs. If this is where we're headed, embedded giving is not the story, or even the end in and of itself, it is simply one more way in which we can see the world shift around us.

*There is at least one looming irony about embedded giving. As it becomes more embedded it may become less of a distinguishing factor for a merchant - at which point type 2(B) above may lose its point and cease to be everywhere. Remember, embedded giving is as much (if not more) of a merchandising tactic as a fund/awareness raising tactic. In this case, embedded giving could die out from its own "success."

**Links to organizations, companies or legislation in this post do not indicate endorsement.

This blog post is part of the Embedded Philanthropy Blog Series, sponsored by Telecom for Charity. The blog series was launched in May 2009 to highlight expert thinking and encourage discussions on the state of embedded philanthropy in today’s economy.


Angie said...

Hi Lucy,

You raise some great points here. I've been thinking about this too but unfortunately, did not use the term embedded philanthropy:

We do, I think, need to understand more about how the next generation views this kind of "giving," especially in the context of their thoughts and behaviors related to other types of giving and engagement, and what the implications of these are more broadly.

Lucy Bernholz said...

Thanks for writing in - the discussion about embedded giving has included some of the issues you raise in your post about hidden costs - including in the interview I did on PRI's Marketplace with Kai Rysdal in Dec 2007 about it. The big issue on this, as I see it, is that we don't know what we need to know about funds raised, distributed, costs of those funds, etc. - this type of fund raising is so poorly monitored (because its actually a brand-building marketing tactic more than a fundraising strategy) that we simply have no idea how much money, where it goes, if it does what we're told it will do, etc etc. We don't enough to know if we should praise it or damn it, or worry about it.


revvedup said...

Hi, Lucy:

I work with an organization that is trying to maximize transparency (100 percent of contributions go directly from the business to the nonprofit) *and* move toward a more "core business-related philanthropy model."

Briefly: and (our parent organization does not ask a business to "add on" a cause. Rather, we embed the philanthropy in the daily "must do" actions that directly affect top-line/bottom-line business outcomes. For example, hotels must build trust with guests, and offer outstanding service. As part of being "of service," the hotel offers guests an opportunity to contribute $1 per might to local charity chosen by the hotel staff.

End of commercial.

Point being, instead of thinking of philanthropy as something added on by "corporate" (and often ignored by front line staff and distrusted by customers), we are looking for ways to embed philanthropy at the most local level into the daily "to do" tasks that are the basis of the business model.

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