Striking the Right Balance of Philanthropy, Marketing & Business

Two news stories caught my attention last week. The first was the report that Panera had opened a "Community Cafe" that encourages customers to “take what they need and give all they can.”

The cafe is like any other Panera except there are no prices. Customers pay what they want and what's raised --minus expenses-- goes to charity. Or something like that.

It doesn't really matter. Three things are clear to me. It's great marketing. A terrible business idea. And the philanthropic impact will be minimal.

It's great marketing because as Edward Boches notes, it's well, everywhere, and the program is a great calling card for Panera when folks ask "what have you done in the community lately?"

It's a terrible business idea because when the bloom is off the venture the cafe won't be able to sustain itself from customer donations, much less give back to causes. The cafe may become a venue for community programs, as Panera envisions, but a fully functioning Panera sustained on the goodwill of customer donations, with money left over to give back to causes?

Sorry, Panera. This is one dough that will never rise.

The second story was that Absolut is launching another city-themed vodka - this time Brooklyn - which will join New Orleans, Los Angeles, Vancouver and Boston. And like previous city-themed spirits, Absolut is making a donation to a local charity, $50,000 for affordable housing in Brooklyn.

Absolut wouldn't be on its fifth city-inspired vodka if they weren't good for business. But they haven't been as great for the charities they support since New Orleans causes got a $2 million windfall from Absolut. The next city vodka, L. A., got a fraction of that amount. The Charles River Conservancy in Boston got $50,000. While the marketing for these city-themed vodkas began promisingly, they never evolved beyond a flat donation to a good cause.

What a buzzkill.

The lesson here for cause marketers is that we have to carefully balance philanthropy, marketing and business in the programs we create.

If we overweight philanthropy we may miss the real opportunity corporate partnerships offer. Just think if U2's Bono had been blinded by philanthropy when he first solicited companies to support Product RED. He would have accepted their checks, which many offered, instead of signing cause marketing pacts, which raised millions more and established RED as leading philanthropic brand.

If we underweight philanthropy, companies run the risk of putting  marketing first and reducing philanthropy to "go away" money that gives them a cheap halo that everyone knows the company didn't earn.

If you underweight the business component you rob the program of its ability to leverage market forces for good. That's exactly what's wrong with the Panera venture. Panera can best serve nonprofits by leveraging their company "as is" to support nonprofits. I see Paneras in Greater Boston do this everyday with tremendous results.

The fact that Panera is a for-profit is a good thing for nonprofits. But their "Community Cafe" is too much of a good thing.

But what if you throw off the balance by adding too much business, instead of too little? You blind yourself to the greater good. Even when the philanthropy is in the millions and the marketing even more, and seemingly well intentioned, people see it for what it is: a dumb ploy to sell more buckets of fried chicken that ultimately do more harm than good.