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Buy a red T-shirt to fight AIDS. But does it really help?
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He is also a leader of a consumer watchdog group, which takes issue with the consumption-driven approach of campaigns like (RED). "I would look forward to being corrected by people who are in a position to provide a real answer," says Mr. Davis.
But the inability to obtain some numbers troubles him. "The good folks at (RED) should live by the same standards of transparency that other folks who deal with donated money have to live by," says Davis.
Among the unknowns: How much each company has contributed to The Global Fund, and in the case of Gap and a few others, including Giorgio Armani, how much each purchase of (RED) products counts. Gap says it contributes half the profit on each purchase of a (RED) item, but declined to be specific about how profit is calculated, citing competitive reasons. And, asks Davis, "what does that really mean to the consumer?"
Indeed, some people at Gap stores are confused. Cortez thought that half the purchase price of a RED item went to Africa. And even a couple of Gap salespeople in San Francisco – who were enthusiastic about spreading the word about the AIDS crisis – had the same false impression.
Some companies are more straightforward. Apple donates $10 per (RED) iPod to The Global Fund; American Express gives 1 percent of expenditures generated on a (RED) credit card; and Motorola gives $17 on the purchase of a MotoRazr V3m Red Cell Phone. Converse donates 15 percent of its net retail sales of (RED) shoes.
Though Gap is not as explicit, its commitment to the cause is undeniable: It has signed on for about five years, sent factory work to Africa, and devoted prime advertising, store space, and employee training to it. "The amount of real estate that Gap has given to this campaign – it's truly tremendous," says Mr. Feldman.
The company points to significant results, too. To date, contributions from Gap's (RED) products can cover the annual cost of AIDS treatments for more than 20,000 women and children in Africa, says spokesperson Robin Carr. "We're getting really amazing, positive feedback from customers and our employees."
And Gap, other companies, and (RED) at joinred.com hope to build a community of people around the AIDS cause who would be more willing to volunteer or donate directly.
Davis, however, suggests that (RED) and Gap have a chance to set the bar higher for cause-related marketing by embracing transparency, particularly at the point of purchase.
That may be sound legal advice. Eleven states have laws that say the exact amount on a per unit basis should be disclosed whenever a product is sold based on a representation that a purchase will benefit a charitable purpose, says Ed Chansky, a lawyer who specializes in this arena.
But these laws are rarely enforced so companies may not know about them, Mr. Chansky says. He adds that he doesn't know the specifics of the (RED) deal to judge it.
Ms. Smith of (RED) says she understands that people are still trying to grapple with the model and how to audit it. But how The Global Fund spends the money is clear, she says, and (RED) has been able to help solve some of their difficulties by raising it.
"Look at the end result. This is $25 million. None of these companies have written a check to The Global Fund before," says Smith. "The $25 million is only the beginning. And I have to be delighted with that number. It's found money."
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