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When Embedded Philanthropy Works (Hint: It's All in the Story-telling)

By Tom Watson on May 29, 2009One Comment

Lucy Bernholz coined the term “embedded philanthropy” a couple of years ago to describe a growing phenomenon in the consumer marketplace – well, let’s let Lucy tell it:

Embedded giving is the (apparently) increasingly common practice of building a philanthropic gift into another, unrelated, financial transaction. For example, rounding up your phone bill to make a gift to charity. Or using your own grocery bag and donating the nickel that the store gives you to a local homeless shelter. Or using a specific search engine because it donates a small portion of its advertising revenue to charity.

This post is part of a series sponsored by Telecom for Charity, yet another “small percentage of charity” premise promising to divert a portion from the sale of something we’d buy anyway (in this case, telephone service) to charity. These offers suffuse our consumer lives nowadays – and despite the cynic in me, I do believe they represent the desire to “give something back” on the part of the entrepreneurs behind these efforts … in somewhat equal proportion to their just-as-strong desire to leverage the proven consumer interest in causes and “good brands.”

But I also think that the basic (and I might add, seemingly majority) reaction in social sector circles that embedded philanthropy just isn’t worth the effort – or worse, may divert real direct giving by giving people a cheap way to feel like they’ve done something good – misses one crucial point. And it’s a very typical one for those who work in nonprofitland to miss: causes should be using these opportunities to broaden the attention they get.

In other words, even if a lot of embedded philanthropy looks like an attempt to take advantage of nonprofits desperate to raise money by using them to hook into a consumer market hungry for causes, so what? If the cause can latch on to a marketing campaign to garner more attention, it may be worth it. Sure, the money is small – especially for organizations who don’t have exclusive fundraising partnerships with the consumer brands and start-ups plying these waters. And I do not believe the money ultimately raised will ever tilt the philanthropy scales by all that much.

That said, causes need exposure in our saturated consumer-dominated culture.

So the key is in the story-telling – in changing the value of perceived embedded philanthropy from raising tons of money to raising tons of attention (with a few dollars as a bonus). To me, the best of the embedded philanthropy schemes work to educate consumers about important causes – with the small-percentage offer serving as merely the hawker outside the door.  In his post for this series, Sean Stannard-Stockton gets at the root of it:

Maybe embedded giving will prove to increase the amount Americans donate to charity each year by presenting consumers with an option that makes them behaviorally more likely to donate. But for now, I have to say that I see embedded giving as an indicator that Americans have an increasing interest in philanthropy rather than as a driving force of that interest.

And just taking Sean’s observation a step further: if embedded philanthropy can be used to bring more attention to important causes, maybe its rise is more than an indicator – but a potentially important tool in recruiting a higher percentage of consumers to become more active philanthropists in general. Has RED increased attention for the African HIV/AIDS pandemic? Have the ads for Tom’s Shoes increased consumer empathy toward children living in poverty? To me, those are key questions to ask – in addition to counting the dollars raised.

This blog post is part of the Embedded Philanthropy Blog Series, sponsored by Telecom for Charity. The blog series was launched in May 2009 to highlight expert thinking and encourage discussions on the state of embedded philanthropy in today’s economy.

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One Comment »

  • Tom, I couldn’t agree more that these campaigns are first and foremost an opportunity to draw attention to causes and the nonprofits dedicated to them. The question then becomes: will that attention translate into support? Will we be less or more inclined over time to lobby our politicians, give of our financial resources, and/or dedicate our own time to create some change we want to see? And in the aggregate, will we come to expect these kind of embedded philanthropic connections, and if we do what will that really mean for our collective well-being?

    Thanks for the nuanced post, and for inspiring more questions…

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