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.
4 comments:
Hi Alan, Always a pleasure to receive your latest issue. I think for a politician and for a non-profit organization to stay true to their ideals and mission they need to secure their source of income, whether by delivering a valuable service or product or securing an endowment, preferably with no strings attached. Otherwise, sadly enough, money will sooner or later twist their arm. Warm regards my good friend, until next month, CA Restrepo
Hi Alan! good to see you are back in the game!!
Personally it just seems odd that wanting to create a "supposedly" completely independent foundation from its commercial activities, Shell was simply unable to come up with a more creative and independent name for it than "the Shell foundation". Makes you wonder about its intentions from the start...
This comment aside, have to say that based on your examples of Ben & Jerry's, The Body Shop etc....it seems that the only succesfull cases for simultaneoulsy generating profits and social dividends come from companies which from the start have had a very strong social component to their set of objectives and goals (thus a social enterprise). For the rest of "normal" profit-driven-companies and donation-thirsty charities who wish to combine efforts, not only do they need to communicate better what their intentions are...but also spend MORE time and thought on trying to figure out what these common intentions actually are, and what unitended outcomes could emerge from their love affair and ruin their honeymoon.
Un abrazo....¡y no dejes de escribir más seguido!
Hi Alan,
Good to have news from you. I think ca restrepo has a good point, in that at the end money tends to end up ruling. However, one aspect I think could make a difference is that corporations creating branches for charity/social work should do it under a differnt name. In the case of Shell I perceive that if the name "Shell" was used in the social work division, that was by itself a commercial interest. Therefore if corporation want to really play in the social/charity arena, they need to be able to separate their own interests and focus on the goals of the charity/social work they want to focus on. I admit this is difficult to achieve since corporation want to build a good name around the social work, but then again, they are using it as a mean to improve corporate image rather than do good. Therefore, my conclusion is that corporations do not seem to be really interested in helping, they want goo public image. The challenge: how to incorporate true philantropy at the corporate level?
My friend Alan, lately I have been thinking a lot about this topic - non-profit organizations and the real deal on helping others.
One thing that came to mind was, instead of having corporations funding some projects just for the sake of improving their images while getting some tax benefits, imagine that people would start businesses that would be for-profit. But 100% of the profits would go to improving the business (hiring people for communities and giving them opportunities and income) and the rest of the funds would go to some projects that other non-profit organizations would be responsible for. I am sure that if companies like this existed, many lost souls (like myself) would be interested to join the team. Pure altruism – and talk about a marketing-ready campaign totally based on word-of-mouth. Wouldn’t you tell your friends that there is a company that gives/invests 100% of its profits back to the community while having a good quality product/service with a competitive price? Anyways, just food for thought, while I do not have the guts nor the funding to kick-start such project. Cheers!
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