After a Tragedy, the Conundrum of Corporate Donations

Every time there's a tragedy — be it 9/11, Hurricane Sandy, or the Boston Marathon bombing — there's an expectation that corporations will do something to aid the victims. "Something," however, has gotten ever more complex. After all, how do you support those affected without looking like you are cashing in? And, in the case of Boston, who are you raising money for? Unlike Hurricane Sandy, for instance, where the Red Cross was an obvious recipient, this was an event where individuals' homes weren't destroyed; their bodies were.

In the days after the bombing, John Hancock, a marathon sponsor and mainstay in the Boston business community, donated $1 million in cash, which became the "cornerstone donation" for the creation of The One Fund Boston. I suspect this charity was created for a couple of key reasons, aside from the obvious goal of helping those affected by the incident.

First, for those inside — and importantly outside — of Boston, the fund becomes a focal point for those wishing to help out. People were talking about "Boston" — the city, the marathon. It's that one word that is on people's minds. They aren't thinking "Red Cross" or "United Way"; One Fund Boston provides a direction for people's generous impulse.

Second, in the wake of September 11th, a slew of charitable organizations appeared. Many were legitimate, but just as many were simply raising funds to cash in on the tragedy. Creating One Fund Boston enabled the city to get ahead of those sorts of abuses.

For Adidas, another Boston Marathon sponsor and an integral member of the running community, doing something meant creating a t-shirt for which the proceeds would go to One Fund Boston. Ever the smart marketers, they had the shirt out almost immediately; they priced the shirts at $26.20 reflecting the 26.2 miles of the marathon; and the company logo was prominently displayed on the sleeve as you can readily see in the picture below.

Adidas shirt

With people not knowing how or where to donate money, Adidas provided a focus and the product was successful beyond measure, selling out within a day according to Businessweek. Through the sale of this shirt, Adidas donated more than $1 million dollars, a company spokesperson told the Huffington Post.

Not to be a naysayer, but let's ask a question: Why create the t-shirt and not simply give a donation? With a market cap of $21 billion and more than $2 billion cash on hand, it's not like Adidas couldn't give the money themselves and take the accompanying tax write-off.

The answer, in part, has to do with why any company engages in a cause marketing campaign: it generates goodwill, it provides significant and overwhelmingly positive PR, and, in this case, for as long as those t-shirts last, the purchased item acts to promote Adidas as a corporation that cares. A donation is a one-time event with no visual reminder; a t-shirt lasts forever.

But this doesn't necessarily mean that Adidas is simply being opportunistic. The reasoning behind creating a tangible product as a memorial actually has a lot to do with how we behave as consumers.

After a tragedy, there is a natural need for a talisman, something physical to hold on to in order to control your fear. A psychology theory, called terror management theory, hypothesizes that a function of culture is to help lessen anxiety around death. Awareness of one's own morality is heightened after violent events like Boston, and people look for ways to manage their fear of the inevitable. One way fear can be lessened is by bolstering your self-esteem, which we often do by acquiring possessions.

In other words, we go shopping. Buying and wearing the t-shirt increases your positive sense of self (while assuaging your terror) because it reminds you that you have helped others while simultaneously demonstrating to others that you are a caring person. This is something that writing a check simply cannot do.

So which is the better corporate response — John Hancock or Adidas? And what are other types of aid should companies consider?

Both a direct donation and a sponsored product are acceptable, within context. Even though I am not a big fan of attaching donations to the purchase of a thing because it tends to do more to propagate sales for the corporation than it does to raise funding for the charity, we cannot negate people's urge to have something physical to hang on to. I give Adidas kudos for making clear that their donation is based on profits, not the total cost of the shirt; better would be if they said "$10 from the sale of this t-shirt goes to the One Fund Boston."

In terms of John Hancock and One Fund Boston, the issue is going to be one of transparency: about how much money is raised (there is a tally of funds prominently displayed on the website) and about how the money is being distributed and to whom.

And while donating money can help, it's important for companies to remember that other ways to provide support should be considered, based on their unique market position. For example, after Hurricane Sandy, Home Depot not only donated $1 million, which including cleaning and building supplies, but they also organized volunteers and used their stores as drop-off sites for donations. Did this generate goodwill for the company? Yes. Was that the only reason the company did it? I don't think so. I'm not that cynical.

It's also important to remember that, unlike other heartbreaking events, the need for immediate funding seems less acute in Boston. People will need assistance over the long term, learning how to walk again, laugh again, and maybe even run again. We have all heard the heartwarming stories of people who were injured vowing to run the marathon. Maybe there is a company that can donate a lifetime supply of shoes, or a sports company with trainers that can help people access the skills or therapy needed.

In the end, each individual company needs to think long and hard about their own expertise and how they might use it for good after this tragedy and others. Now is not the time for gimmicks; it's the time for tangible, transparent help that actually makes a difference.

A version of this post originally appeared on the author's website.

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