In June 2000, Shell established the Shell Foundation in order to create a fully independent charity that would be in charge of the firm’s social programmes. The Foundation’s website specifies that its work cannot have any direct financial benefit to Shell.
Six years later, the Foundation was facing an investigation by the UK Charity Commission, as some evidence suggested that Shell was using it to promote its commercial interest. The investigation concluded that The Shell Foundation had “fallen short of good governance and decision-making”.
Although many charities have been investigated in the past, this case helps to illustrate how in some cases it is difficult to distinguish between charities and corporations. In simpler terms, businesses and charities are trading places. Consider the following examples:
Ben and Jerrys is educating consumers about the US National Budget and encouraging them to write to Congress in order to have them spend more of the discretionary budget on children.
Tom Shoes gives poor children a free pair of shoes for every pair of shoe it sells.
In 1998, a cocoa cooperative from Ghana (Kuapa Kokoo), The Body Shop, Christian Aid, and Comic Relief founded The Day Chocolate Company in order to produce, brand and sell chocolate directly to western countries. This company was created with the purpose of helping cocoa farmers increase profits from their cocoa.
These examples are very straightforward and more of these initiatives should be encouraged. These organisations are not only creating social dividends but they are also responding to how society is expecting them to behave. In return, these companies are able to generate an emotional bond with consumers and their own employees. For charities, this means meeting their goals by developing more efficient and innovative programmes.
However, some of these initiatives - in particular those employed by corporations - are becoming more aggressive and tactical. In many cases, the campaigns or charities do not communicate properly who the founder is. This, in turn, raises many questions of transparency as these initiatives go beyond supporting causes to also using consumers to disarm competitors. The following examples will help to elaborate this point further:
Stock The Choc! Campaign aims to persuade local shops and national supermarkets to stock Fairtrade chocolate. The campaign is a joint partnership between UK charity Comic Relief and Day Chocolate (manufacturer of Divine and Dubble Chocolate).
Cafédirect, the UK's largest Fairtrade hot drinks company, is a sponsor of Black Gold, a documentary film that explores poverty in coffee producing countries. The firm endorses Fairtrade as part of the solution.
Climate Counts, a non-for profit organisation, is a collaborative effort to bring consumers and companies together in the fight against global climate change. The organisation is funded by Stonyfield Farm, Inc, which has recently launched the only carbon neutral yoghurt in the UK.
Companies and non-profit organisations need to be more careful when they engage society and communicate more clearly as to what their real intentions are. Otherwise, society will not only become more sceptical towards businesses but will also begin to trust the third sector less. This will undermine corporate social responsibility and sent us back to the time when companies were only concerned about money and when charities survived on donations.
