I believe that if you do receive something in return for helping, it can still be charity, but I need to defend my position. I completely understand the perspective that if you are giving away something and expecting something for yourself in return, it does not seem like act of charity at all.
First, Merriam-Webster defines charity as:
- the act of giving money, food, or other kinds of help to people who are poor, sick, etc.; also : something (such as money or food) that is given to people who are poor, sick, etc.
- an organization that helps people who are poor, sick, etc.
- the organizations that help people in need
According to these definitions, the key part of charity is "the act of giving" and "helping." Nothing regarding returns is mentioned here.
I believe there is a part missing in this definition and that this missing piece is the part that @L_staff believes what truly defines charity. We will get to that in a few paragraphs though.
To keep the definition black and white, would it be better if charity meant acting to help others and receiving nothing in return? What would we consider an act of giving that helped people that included a benefit for the giver?
What if the person receiving the charity has to fulfill requirements upon receiving them? For example, in a charitable program that provides an apartment, job, counseling and food for someone who is homeless but the person must attend work everyday. Then, if it turns out one of the sponsors of the program is the ones providing jobs. Is this a bad thing or a good thing? Is the business taking advantage of the person who is homeless or providing an opportunity? Some businesses are not willing to take chances to provide actual jobs, so I would think this is a good thing. When expecting a return, does this become just an exchange of capital?
I think the definition cannot be black or white; it is muddled. Again, I think there's a part to the definition that is missing.
Secondly, the goal for businesses is to be profitable while completing its mission, not to give away profits. Even B-Corporations, despite having the flexibility to make decisions to benefit cultural and environmental needs over shareholder profits, still pursue generating revenues as a top priority. When businesses are able to donate money, resources, or time, they are not technically acting on behalf of their fiduciary duty to give its shareholders its largest gains; thus they should not have to work with charities. However, with governments providing tax deductions and incentives for businesses to donate as well as today's consumer desiring corporations to act to help the community, there is an expectation for businesses to give back.
With these expectations from stakeholders of businesses, businesses need to incorporate its charity practices into its operations formally for efficiency. This means they need to: set goals for measuring; create tracking devices to collect data around impacts being made; and use information to educate and report to stakeholders.
Regarding these two factors, I believe it is a necessity that businesses work with charity and why it is okay businesses work with charities to create win-win relationships that contain benefits for all parties involved.
The Missing Part of the Definition
The piece I believe that the Merriam-Webster definition is missing is the sincerity, genuineness, and proven passion to help a cause. Without that, it is easy to see the fine line @L_staff mentions as businesses can easily disguise an initiative under charity when, in actuality, they are obtaining more of the benefits.
A few minutes after our response, @CraftBrewingBiz joined the conversation:
Case #1 - Breast Cancer Awareness
October is Breast Cancer Awareness month and pink can be seen all over to help spread awareness. However, some people will agree that corporations have clearly commercialized the cause to benefit themselves more than pushing to making a real difference.
In an article "Sick of Pink" by Boston Globe Magazine in 2009, numerous women claim that the cause-related marketing actually makes them cringe as it's a constant reminder all month about the battle they are going through. Some of the objects sold to raise money for breast cancer research or raise awareness have actually been linked to chemicals that possibly cause breast cancer. This is called pinkwashing according to Breast Cancer Action.
A company or organization that claims to care about breast cancer by promoting a pink ribbon product, but at the same time produces, manufactures and/or sells products that are linked to the disease.
From Think Before You Pink
Another pinkwasher example that occurred more recently is Baker Hughes, who made pink fracking drill bits to raise awareness. A report in 2013 shows there are 750 known chemicals in fracking fluids have been linked cancer and other health issues.
An important point raised in the "Sick of Pink" article comes from Chris Mann, associate brand manager of marketing for New Balance. New Balance has a "Lace Up for the Cure" line of shoes, apparel, and accessories. A percentage of sales go to the Susan G. Komen Foundation. Mann claims that the money used to produce and sell the line comes from the actual marketing budgets, dollars that are not earmarked to go to charity. Essentially, this becomes extra funds to support the charity.
Several opponents in the article claim that the hoops that customers have to jump through are unnecessary to have the company make a donation. In the Yoplait example, each lid mailed back to Yoplait is a ten cents donation from the company. One person would have to purchase and eat three yogurts a day plus mail back the lids just for Yoplait to make a $36 donation for one year. Wouldn't it just be easier if Yoplait and customers made donations without the program? According to the reasoning from Mann, the dollars generated from the "Save Lids to Save Lives" would not be created because it comes from Yoplait's marketing budget and not given people the motivation to respond with an action to donate.
Businesses need to make a positive impact but also need to show that cause-related marketing is not meant to be a reason to charge high premiums and make more money than before. Sincerity to make a difference is key here and one way for businesses to do that is by becoming more transparent about how the cause-related product sales will impact the charity and the business.
We highly suggest reading the "Sick of Pink" article. It points out other ways corporations abuse the pink ribbon. There are now several watchdog groups such as BC Action's Think Before You Pink that look at breast cancer programs across the US just because of corporations taking advantage of charity.
In 2013, McDonald's was accused of not giving enough to Ronald McDonald House (Ronald McDonald House was started by McDonald's but is now independent). It was found that the charity received 20 percent of its budget from the McDonald's. In this news report, the reporter found that Philadelphia branch of Ronald McDonald House received no funding from McDonald's.
At the end of the video report, reporter George Spencer states:
The charity tells us it helps some 12,000 families every single night. They say it is work that would not be possible without McDonald's support and the visibility the company provides on so many street corners."
Of course, no foundation would ever talk poorly of a corporate partner who funds 20 percent of its budget and is the only $1 million+ corporate partner listed, but the statement highlights how integral McDonald's is for the awareness of their charity and being able to operate.
So, how much or what percentage is McDonald's supposed to donate to support the Ronald McDonald House charities? What is a number that you would have expected? Isn't Ronald McDonald House doing a good thing by diversifying its funding sources?
On the Ronald McDonald House website, the charity shares the importance of not relying on just one way to get the cash it needs for its programs:
Although the McDonaldâs system is our largest corporate partner, RMHC is a non-profit 501(c)(3) corporation and no one company can solely fund the growth of RMHC programs and services necessary to serve more families. We also rely on the support of the entire community and greatly value any donations you can afford to RMHC, whether itâs through cash and/or in-kind contributions, your time or fundraising efforts.
Again, what is the appropriate amount McDonald's needs to donate?
McDonald's could have been more transparent about their support with Ronald McDonald House charities. If they publicly stated what their annual contribution percentage of the charity's budget will be, including the reasons why, and spoke about how they support each location with money, volunteers, events, etc. the story would not seem to be as quite as big of a shock.
When businesses are using charities to primarily benefit themselves, people will notice and take a stand, as was the situation in both cases we looked at. Of course, not all instances will be caught or noticed.
Charities have different needs and must get the resources they need from all different people and organizations in order to do the work they do. Charities should look at Breast Cancer Action's model of establishing guidelines on whom they can accept gifts from. Cash is a need for charity, but fit of partnership is just as important. Taking money from a group that benefits from the source that causes the problem leads to bad brand imaging for that business and the charity.
If businesses are going to continue to give back to the community through charity, ensure that there is substance and integrity to make a difference. Focus on causes that are more directly related to your business.
Finally, a business is inclined to look at what benefits exist with all of its operations, including its work with charity. However, a business is apart of the bigger world. A business has built itself a platform larger than the individual and can construct a larger positive impact. It is without sincerity when businesses can get into trouble and be seen as abusing its charitable work as a platform for itself more than the cause it hopes to help.