Loved last week’s Bell Let’s Talk day donation of 5c per contact. There was nothing to buy, a fixed amount, it was Bell’s money, and it added up to over $7.2 million for mental health.
I am a big fan of helping charities. I’m an even bigger fan when a retailer donates all the sales proceeds to a cause. The best example is Tim Horton donating every penny of coffee sales one Wednesday in June to their Camp Day foundation.
A Wharton Business School study shows it’s part creating customer loyalty and part marketing. In the U.S. these donations were over $2 billion in 2015. People do take advantage of it, but it turns out not to increase customer loyalty. The study also found that a company donating a buck or ten bucks doesn’t change our behavior or loyalty. Certainly not good news for charities, and the reason it tends to be a pretty tiny amount.
The Bell and Tim’s full amount donations are very different than being hit up at the cash register. Do you have our credit card? No way. Do you want to apply for it? Never. Do you want an email receipt. No, you’re not getting my email so you can send me junk email the rest of my life. And then asking if you’d like to donate a buck or two to this or that charity.
My standard answer is always no. If I wanted to donate to your chosen charity, I’d be writing them a cheque. When retailers do it, THEY get one massive donation receipt as they’re making the actual donation with our pooled money. No I don’t feel bad. No, I don’t appreciate the implied pressure. No, I don’t think companies should do this. Yes, I could afford the two buck donation, and yes, I might like the charity.
Others donate, but only in a sort-of way. Dairy Queen has a “miracle treat day” where they’ll donate the net proceeds from Blizzard sales to a charity. But note that it’s not all proceeds, it’s only the NET proceeds. So, I have no clue if my six-dollar Blizzard is contributing a buck or a penny to a charitable cause. Do they just cost the cup and content, or also their rent, wages, taxes, franchise fees, and total operating costs? And DQ can’t tell you, or we’d all know what their actual cost of a Blizzard is…and then my guess that they’re really overpriced may turn out to be true.
Amex wants to get in on the small spending on credit cards wave. They have a new promotion with McDonalds. Pay at McDonalds with your Amex card and they’ll donate one dollar each charge to Ronald McDonald House charities. Great. But we spend almost 150% more paying at McDonalds by credit card. So Amex wins, McDonalds sales win, we overspend, and a few bucks go to charity. Not a total win-win in my opinion.
George Boelcke – Money Tools & Rules book – yourmoneybook.com