Tech Companies and "Product Red": A Good Idea

The new Product Red charity initiative has its detractors, yet this example of what Bill Gates calls "creative capitalism" is an idea whose time has come.
Posted January 24, 2008

Rob Enderle

Rob Enderle

I’ve been watching Product Red with some fascination of late and this week they picked up Microsoft and Dell. Product Red, you may have heard, is a charity launched by U2 superstar Bono and philanthropist Bobby Shriver. It’s a brand name that is licensed to participating companies; when these companies sell a product that’s branded Product Red, a percentage goes to charity. (The proceeds are used to fight AIDS, malaria and tuberculosis.)

What I find fascinating is the amount of criticism Product Red gets largely because the organization has figured out how to come up with a commercial offering that probably generates more actual cash for the needy than many other more traditional groups.

While Bill Gates was an early supporter, and like him or not few seem to challenge the belief that he is the world’s leading philanthropist, the fact that Project Red picked up Apple is an indicator of the power of the program (Jobs is known for many things, Philanthropy isn’t isn’t one of them.

Or, in short, it doesn’t pull from a constantly depleted pool of philanthropic funds, it pulls from a constantly well-funded pool of advertising dollars and, if the true goal is to get money to people who need it, pulling from an ocean of funds rather than what often seems to be a nearly dry lakebed would seem to be a more successful path. You only have to look to Google to see how deep the pool of advertising dollars is. (And it should be mentioned that they, too, have what looks to be a unique and possibly brilliant philanthropic program.)

Product Red

This thing draws criticism like a magnet. The criticism seems largely based on three things (there clearly are others but most of them seem to focus on execution issues that might apply to any related medication-based effort).

The first is Product Red is commercial as well as charitable; the second is that it obscures the charity behind attractive celebrities; and the third is that overshadows more traditional charitable efforts. In reading many of the critical pieces my BS meter redlined as virtually none of the critics seemed to have an idea on how to do this any better and many seemed to think that doing nothing was on stronger moral high ground.

On the first issue the beauty of this thing is that it is commercial and therefore should be more sustainable than most other charities. I can think of nothing worse than to give someone hope and then tell them you are out of money and they are going to die anyway. In that instance you probably would have been better doing nothing because, at least then, you would have reduced their suffering rather than simply prolonged it.

On the second and third point, they are contradictory. If the charity is obscured then there is no impact on other charitable giving, or if there is an impact than the charitable effort certainly isn’t obscured. You really can’t have it both ways. Back to the second point on obscuring the charity: if the goal is to generate money what does it matter – as long as it does that for the target group in need – whether it obscures that part of the effort? I’m not saying it does, I’m saying it doesn’t matter.

On the third point this is often used to suggest that rich people shouldn’t be philanthropic because others who would otherwise donate see these massive donations and use them to justify not donating themselves. I would argue, and I have a bit of a background in human behavior, that if folks want to donate they will donate and if they don’t they will always find reasons not to. Personally I think that the fact that some charities have been caught falsifying records and misusing funds is a much stronger discouraging rationale than some rich person giving a ton of cash.

Buying and Selling Red

The beauty and elegance of this program is that it has two solid messages that go out to two distinct groups – and so it pulls in cash that otherwise would have gone to something else.

To the business participating in the program it promises they will sell more premium products AND they will do something good for the world. To the consumer they say you will get a distinctive great looking product at a competitive price AND you’ll do something good for the world. If the decision maker doesn’t care about doing something good for the world, the charity still gets money and people’s lives are still saved.

Think about it, how many other charities can pull money from folks who otherwise wouldn’t be giving at all? In product sales terms this is called broadening the market, in financial terms this is called increasing revenue, and from a personal standpoint I think this is brilliant.

Steve Jobs, Michael Dell, and Bill Gates are all rather sharp folks who appear to immediately get that this is a good thing. And the fact that the resulting products are actually very desirable shouldn’t be lost on anyone either.

Wrapping Up

Given this is an election year here in the U.S. and there seems to be an unusual amount of flagrant disregard for the truth (which on a personal note is really starting to piss me off and I’m a Republican), I can understand anyone being skeptical.

However my view is if we had every company and charity thinking as creatively as the Product Red folks are doing we would be generating far more for the folks who need help and the world would, in fact, be a better place. I think we can all agree it would be really great if the world became a better place.

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