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By Jonathan Bacon

A growing number of international brands are using in-house charitable foundations to not only help developing nations but also promote their values and global reach.

coffee

Many brands would claim to be pursuing corporate social responsibility policies long before the onset of the economic slump four years ago. But against the ongoing backdrop of flat growth and austerity, companies of all shapes and sizes have stepped up their efforts to show a more caring, compassionate side by expanding their charitable activities.

Next week, McDonald’s will launch the “biggest” push for its Ronald McDonald House charity that provides accommodation to families whose children are in hospital, while shoe brand Crocs relaunched its Crocs Cares charity in Europe this summer.

The US-based charity, which has been running since 2007, has pledged to donate 20,120 pairs of shoes to people around the world if it could secure the engagement of customers on the Continent.

Michael Marshall-Clarke, European marketing director at Crocs, says: “It’s a great way of engaging customers by telling them about our philanthropic side and our social responsibility but also by enabling customers to give something back to other people by the action of shopping.”

Feet first

The European relaunch is closely tied to Crocs’ celebrations of its tenth anniversary as a trading company, with the 20,120 target figure made by multiplying ten by 2012. To achieve the target, Crocs is pledging to donate a pair of shoes for every customer who signs up to the campaign with their email address either in-store, on the Crocs website or on Facebook.

“I think it’s a great way of using a marketing campaign budget,” says Marshall-Clarke. “Whereas a lot of other businesses might just mark an anniversary with discounts and giveaways to customers, we chose to take this 20,120 target and encourage people to sign up. That’s why we’ve incorporated a lot of customer touchpoints for this campaign.”

unicef

This engagement serves to reinforce the Crocs brand by highlighting the robust materials that are used in the shoes and the fact they work particularly well in developing nations, claims Marshall-Clarke. He points out: “In some countries where children have to walk to school with no shoes, they end up with all sorts of skin infections that come in through the foot. As a result of wearing Crocs, though, parasites can’t burrow up through the shoe because of the materials used.”

While Crocs Cares focuses on what its parent brand does best, other in-house charities have expanded into a much broader range of activities to reflect the global scale of their brands.

The Ikea Foundation, for example, started life 30 years ago as a funder of innovative design projects for the home. But as Ikea experienced huge growth, the foundation’s reach has also expanded massively to cover large-scale development projects around the world (see Case Study, below).

The charity, which is funded from Ikea’s profits, now works with Save the Children and Unicef to support programmes “that encompass the full circle of a child’s basic needs”. Jonathan Spampinato, head of communications and strategic planning at the foundation, says such activity supports the Ikea brand by engaging all the company’s stakeholders in worthwhile causes.

“People now expect global companies to participate in all communities throughout the world that are touched by their business,” he notes. “We share the same name as Ikea, and we want Ikea staff, customers and people who work for Ikea along the supply chain or live in communities that participate in our supply chain to know that we are taking our sense of responsibility seriously and that we are being proactive about how we give back.”

This engagement with Ikea’s “shareholders” includes harnessing the expertise of Ikea employees and transplanting it onto broader global causes. One recent example saw the foundation host a series of workshops in which it shared ideas with the UN’s refugee agency on flatpacking tents to help it respond to crises more quickly and efficiently.

Supporting internal brand values

In-house charities can also serve to consolidate and support internal brand values. The Body Shop Foundation is another charity that draws extensively on the resources of its parent brand, owned by L’Oreal, to support its activities, says Adelle Scott, the foundation’s fundraising and communications manager.

“Our main source of expertise from The Body Shop comes from its 30,000-plus staff,” she says. “Who better to tell us about a small, grassroots project in Spain, for example, than a staff member who knows the area? We use this expertise and wisdom to find and fund projects.”

The foundation’s chosen causes also reflect The Body Shop’s focus on ethical products and practices. The charity describes its three main funding pillars as animal protection, human rights and environmental protection.

Other major brands have set up foundations that are distinctly independent from their parent company. The Shell Foundation asserts that it is not part of the energy brand’s corporate social responsibility policy and is run completely separately. Richard Gomes, communications and business manager at the foundation – which was established in 2000 with an endowment of $250m (£157m) – says it uses the Shell brand name to “open networks” and achieve long-term, sustainable goals. “If you want to achieve a big impact then you need to give a lot more than just money – you need resources and a whole set of targets if you want to avoid that perpetual dependence on subsidy.”

He adds that because of the foundation’s huge endowment and subsequent annual top-up payments, it has been able to take “well considered risks”. This has seen it move into a wide range of activities, from nurturing small businesses in Africa, to supporting pollution reduction schemes in ‘mega-cities’ like Mexico City.

Focusing on social values

The foundation’s independent identity from the parent brand suggests there is not always a clear marketing angle behind an in-house charity, particularly where it is engaged in a huge range of development work.

Spampinato at the Ikea Foundation, says the same is true of his charity. “In the countries where we work, we tend to focus much more on the social value rather than the brand value,” he says. “We don’t go in and do market testing and think about how the brand is supported.”

Entertainer

But Spampinato does concede that: “In markets where we’ve got retail presence and customers are familiar with Ikea and our activities, charitable activity probably helps our brand because people have expectations about our responsibilities.”

Philanthropy and brand-building aren’t always mutually exclusive. Pennies, an electronic charity box concept which launched in 2010, offers participating brands the chance to highlight their existing charity work and boost their reputation among customers while raising more cash for good causes.

Operating on in-store payment terminals, online and on mobile, the concept is a replacement of the traditional charity box on the store counter. Pennies’ software calculates a top-up payment on till balances and offers this as an option for card-paying customers to donate to the retailer’s partner charities. It is currently present in ten national retailers, including Domino’s Pizza, Travelodge and Zizzi, and has so far recorded over 2.5 million donations.

Liz Kearsley, communications and marketing manager at Pennies, says the system helps retailers “magnify” their corporate responsibility work. She cites The Entertainer toy shop, another chain using Pennies, which has increased awareness of its charitable work with children’s hospitals while also raising more donations from its customers.

“There’s obviously a cutback on funding charities due to the economic climate, so having new avenues and new ways to give is great for charities, and retailers can join in too,” says Kearsley. “Consumers definitely love it.”

Case Study: Ikea Foundation

When the Ikea Foundation was established in 1982, the parent brand was a much smaller company than it is today and the foundation’s social ambitions were closely aligned with the home furnishing business. The foundation focused initially on funding innovations in designs for the home, as well as designs related to living communities and towns.

However, as Ikea developed into a major global brand, the foundation’s interests grew too. In 2009, it expanded its charter to include a broader mission of improving the opportunities of families in the developing world, with a particular focus on women and children.

All global Ikea social and philanthropic work now falls under the umbrella of the foundation and in 2011 it spent €65m (£51m) on projects around the world.

Jonathan Spampinato, head of communications and strategic planning at the foundation, says it aims to increase that figure to €100m (£79.1m) a year. “Our strategic thinking is that we want to achieve large-scale change and we want to help hundreds of millions of children in the developing world,” he explains.

“A lot of our programmes are focused on partnering with large agencies that are capable of replicating and scaling to reach that many children and help improve that many lives.”

The foundation is directly funded by Ikea’s profits, which are allocated by the group’s holding company, although it also makes in-kind donations of Ikea products and shares Ikea expertise. For example, the foundation has connected Ikea logistics experts with relief organisations to share their knowledge of how to purchase, store and move masses of goods quickly and efficiently.

Spampinato says the foundation supports the Ikea brand by engaging all of its “shareholders”. That includes Ikea customers, who fund the foundation’s work; Ikea workers, to whom the foundation turns for expertise; and people engaged in the Ikea supply chain, who live in many of the areas in which the foundation funds projects. “People have expectations today that global companies participate in all communities throughout the world that are touched by their business,” he adds.

Stats

305 – the number of Ronald McDonald Houses globally

£51m – the amount the Ikea Foundation spent on funding children’s projects in 2011

15p – the amount per pack that Tesco will donate to its Halo Initiative charity from sales of its own Halo sanitary products

£150,000 – the total amount that Procter & Gamble gave to 29 mothers as part of its P&G Champion Mums Foundation in the UK

$164m (£103m) – the total amount that the Walmart Foundation has given to charity, up until the end of 2011

Sources: Company websites

From Jonathan Bacon, MarketingWeek.

Copyright 2012 by Centaur Media plc. Reprinted by permission.

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