Buy a red T-shirt to fight AIDS. But does it really help?
Companies spent $1.34 billion on 'cause-related marketing' last year in the US, but critics cite a lack of transparency.
from the March 12, 2007 edition
Page 4 of 4
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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