In this article we will examine the conundrum of spending by a company or customers spending what they save by paying less for the company`s product. We will also examine the motives of donating corporations.
Why does a company donate to charity?
The primary reasons is to become bigger; have more sales, as the company is perceived as a positive influence. In this they negate the image of a rich shareholders doing nothing but enrich themselves. The best way to achieve such an image appears to be by spreading the message that all donations are done from profit. So no other expenses are added to the product price. Naturally, a growing company will be able to donate more, thus creating a self fulfilling prophecy, assuming they actually donate based on sales/profit, instead of a fixed/pre-determined amount.
Note from author: If sufficient profit is available that they can just spend it without expecting any gains, chances are that the sale price is rather high. Above we state that there is a gain, however it is not a quantifiable gain, nor is it guaranteed so donating remain a risk, if done for growth.
There is a small difference in companies in this; some have it in their founding charter to give back to the community. It is unclear how many cases there are of adding this without a ulterior motive. A company that genuinely wants to give back without expecting anything in return, should not seek out the press, simply report it on their site (with news and such, instead of front centre on the main page) and all relevant filings.
A entity that spends millions a year on television commercials bragging about how much they have donated, is likely to have done so for growth. if consumers pick up on this, the result would be opposite and a big PR campaign becomes obligate, with actually paying up what you promised.
Why would a consumer spend money on charity after saving a buck?
No real reason other than the standard ones; either because they genuinely care, or have a guilty conscience to silence. For the former, this article is not really relevant, since they are already donating. But the latter is precisely who should be targeted by the discussed campaign; the company you bought from did not donate so you should donate something.
Possible campaign to seduce people to donate to charity
The campaign to achieve this; donate what you save, is in itself a good campaign: Without actually donating anything to any charity, you are linked to whatever people donate. As with all other options, this campaign will have to be repeated every once in a while. Partnering with a news outlet or big charity is recommended, to avoid the mishap that nobody reports on their donation. But this is also a chance for the charities to gain publicity; by publishing their received donation, they also get attention and possibly more money.
The cost of the campaign is negligible, as you have to spend money on advertisement anyway.
Overall effects on charity
Giving people the possibility to choose what they donate to, to a greater extent, can lead to either more local donations and creation of local organisations. Or it can lead to the big charities sucking up everything as they launch campaigns of their own, to get as much cash out of the company`s campaign. In reality a combination of the two is likely, with a big portion of saved money not donated.
Not donated money is still a good thing; more money to either have when you need it (some charities focus on locals with spending trouble, so they become less busy), or to spend on something you really need/want. Either way, more money floating around in the economy is rarely a bad thing as it tends to lead to more investments and growth. The main exception to the growth rule is senseless spending on short lived pleasure; alcohol, entertainment and overpriced food.
