Branded philanthropy

Posted on November 20, 2014

If they really wanted to, brands could change the lives of millions of people around the world.I’ve often advised brands on ethical marketing and know how counter-productive it is to constantly berate them for wanting to make money. They are businesses driven by profitability, so if you want to get them to be more ethical you need to work with their capitalistic instincts, not against them. Ethics and profitability are not mutually exclusive – it is possible to make money and be benevolent too. As always, it’s about balance.

Last year Coca Cola did something genuinely meaningful. Following the devastation wreaked by Typhoon Haiyan in the Philippines in November, the company announced a suspension of its festive marketing spend in the region and donated all of it, some US$2.5m, to support the disaster relief and recovery efforts. It was a fantastic gesture of goodwill and a brilliant PR exercise.

Back here in the UK, John Lewis has reportedly spent £11m on this year’s Christmas ad campaign (production plus media costs). Next year, they could take Coca Cola’s example and spend a fraction of that on a simple campaign announcing that there’ll be no traditional Christmas ad and then donating the balance, maybe £10m or so, to good causes. Think of all the lives that could be changed up and down the country, all because of John Lewis. Would those who benefit mind that it came from a brand? Would a homeless man worry that the roof over his head on Christmas Eve came courtesy of John Lewis? What better advert could there be? And what a philanthropic precedent it could set for other brands in years to come.

Branded philanthropy like this could change the lives of millions of people around the world whilst also generating fabulous PR for the brands themselves. But it could go much further…..

Apple CEO Tim Cook has said that Apple wants “to leave the world better than when we found it.” When he said this, he was referring specifically to re-cycling, reducing emissions and reliance on fossil fuels. However, re-cycling and sustainability are already key measurement indices that will soon be non-negotiable for all large corporates. There’s no leadership here, they’re just doing what they have to. Perhaps the company that made so much noise telling us all to ‘think different’ should lead by acting different too.

In 2013, Apple’s cash reserve was US$159 billion. To put that in perspective, the UK’s total cash reserve is US$70b, Canada’s is US$58b, the United States’ US$48b and Germany’s US$39b. Apple’s cash reserve is higher than most of the nations in the G7. That is astounding.

If Apple really wants to leave the world a better place it has the ability to do something genuinely and mind-blowingly meaningful. With that kind of money it could build schools, irrigation systems, alternative energy installations and fund vaccination programmes in third world countries. The list is almost endless and it would not affect their ability to keep selling products. I doubt that the beneficiaries of these programmes would mind if they all came with an Apple logo. Apple could pay off the entire national debts of Angola (US$25b), Bangladesh (US$36b) and Ivory Coast (US$25bn) and still have US$73bn left for themselves and their shareholders to play around with.

It’s not just Apple. Here are the top 10 American corporations by cash reserves in 2013 (US$):

  1. Apple $159bn
  2. Microsoft $84bn
  3. Verizon $54bn
  4. Google $59bn
  5. Pfizer $49bn
  6. Cisco $47bn
  7. Oracle $37bn
  8. Qualcomm $32bn
  9. Johnson & Johnson $29bn
  10. General Motors $28bn

American companies alone are sitting on a cash pile of US$1.6 trillion, 12% up on the year before and double what it was in 2008. And this is all in the post-financial crisis period. What are they actually doing with it all? Not much.

In a previous post I talked about brand citizenship, and how brands have the power to change the world, probably more so than any other human controlled assets. The sums of money that these brands have are astronomical. They could lift billions out of poverty, clear national debts, change the world and still have plenty for themselves to invest in product development and future profitability.

(Note: figures shown are from the IMF and Moody’s)

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