Brand Health and PepsiCo

I remember some excitement and some controversy when huge corporations began running contests for grant money. You prepared your pitch and emailed it. You waited. If enough people "voted" for your cause, you won. If your project didn't win the competition, you didn't win. American Express and others got involved in this competitive scheme for the public good, and won some brand recognition.

Today, the New York Times published an account of PepsiCo, makers of Pepsi Cola and other brands, going into the market of selling their brand on social networks by offering money if you can collect enough votes for your cause. PepsiCo, in a surprise move, withdrew its advertising from the 2010 Superbowl, and they will do it again this year, better to invest the $23 million in something more worthy, and more advantageous.

If you read the New York Times article carefully, you will see that the corporation is not trying to finagle a purchase out of you and not even a heartbeat of affection for their product. No, they want to promote the health of their brand by getting it in front of the Millennial Generation. I'm for it, number one because it will benefit a wide array of worthwhile causes, and also because it presents a new way of getting grants, besides the old way, to which I have become accustomed, of working very hard on the proposal and then tossing it out there to see what happens.

Graft Strikes At The Heart of Giving

Yesterday's announcement that contributors to the Global Fund to Fight AIDS, Tuberculosis and Malaria, notably the Bill and Melinda Gates Foundation, were victims of fraud came as no surprise to those of us involved in international work, especially in the developing world where governments and economies are shaky and corruption is a way of life. I'm reminded of work I did for causes in Ethiopia, where graft is rife. I quickly learned that the USAID and the World Bank had reduced funding there because their grants were being passed along to officials whose approval was needed to dig for water, build clinics or distribute food and clothing. Now, because of this latest controversy, foundations that might have felt it necessary to go ahead with the extortion, bribery and assorted lesser crimes just to get their missions accomplished, see the downside: not only public embarrassment but harm to their relationships with donors.

The Gates Foundation issued a statement late yesterday (1/24/2011) saying that "the Global Fund is doing a tremendous job of ensuring that critical health interventions reach those who need them most. Fraud allegations that have recently been reported in the news refer to a small portion of the Global Fund's resources - only four of 145 countries and $34 million out of a total disbursement of $13 billion. This fraud was discovered and reported publicly by the Global Fund, which has a rigorous audit and investigation system in place...we know that dealing with these hard-to-reach places is challenging, but not trying to save these lives is unacceptable." If the last sentence reads a little defensive, it may be that it foretells what everyone may expect to hear: "how much of my donation will go to graft?"

It appears that dozens of supporters who have pledged over $30 billion, are now holding off on fulfilling their commitments "until money is recovered or more is known about alleged misappropriations". What effect will this trend have on smaller donors, foundations and organizations that are doing good work in the developing world?

Rise of a New Giving Elite

In the January/February 2011 issue of the Atlantic you'll find an essay by Chrystia Freeland titled "The Rise of the New Global Elite". I can recommend it if you have a strong stomach for hubris. According to Ms. Freeland, who has impressive creds, the very, very, very wealthy are not among us, they are floating somewhere very high up there, well beyond the stentch of our pathetic needs and desires. I'm only mildly exaggerating this. Anyway, of interest to us is the author's description of these Masters of the Universe coming to the realization that they have some sort of obligation to share their money with the rest of humanity. It's all the rage since the formation of the Gates/Buffett alliance, except these new foundations are being formed by people who are oddly, sadly out of touch. They are funded to support conclaves (like the one in Davos) or pet projects (like endowments for ski resorts). You see, these folks don't think our worthy causes are worthy enough for them. Read the article, it's alarming.