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Marketing Masquerades as Charity

Question: Where do you draw the line between altruism and advertising?

Dec 1, 2008

by Fil Fraser

The Case: Most businesses try to “give something back” to their communities, especially at this time of the year. How they do it can say a lot about them. Some make unheralded donations to families or individuals in need or to help fight poverty or disease overseas. Some make donations to community organizations, and are pleased to see their names prominently displayed. Some make significant contributions to the capital projects of arts or community organizations, and insist that their names be on the building or facility. Still others make contributions clearly tied to marketing initiatives, along the lines of “for every one you buy, we’ll send a dollar to…” What are the ground rules for mixing marketing with philanthropy, if any?

The Panel: KEN CHAPMAN: lawyer, principal in Cambridge Strategies Inc., a public policy consulting firm, and a blogger | JANET KEEPING: lawyer and president of the Sheldon Chumir Foundation for Ethics in Leadership | D’ARCY LEVESQUE: vice-president at Enbridge Inc., responsible for public affairs and corporate social responsibility

Janet Keeping: Corporate social responsibility lies at the heart of this issue. But there is much confusion about what CSR means. For example, does the concept of altruism apply to corporations? The Canadian Oxford Dictionary defines altruism as “regard for others as a principle reason of action” and “unselfishness; concern for other people.” This does not look promising as a basis for corporate decision-making because it is the duty of corporate management to maximize the return to investors within, of course, the limits permitted by law. The public will turn quickly against an obviously unethical company and that will be bad for business. But on the other side of the ledger, we shouldn’t expect “unselfishness” or “regard for others” ever to be the principal reason for corporate action, for it would go against the very reason for the existence of corporations.

Is this some kind of Wild West, right-wing view? Quite the contrary! To understand what a corporation is and the limitations on its ability to act altruistically is to also understand where the responsibility for protecting the public interest lies. It lies not with corporations but with government and with knowledgeable, involved citizens ready to blow the whistle when corporations overstep their properly understood bounds.

So when businesses “give something back” – unless they are sole proprietorships and [the owners] can therefore do whatever they want with corporate funds – they are always acting in their own self-interest, which is the way it is supposed to be. The primary ethical issue for the public arises when we fall into the trap of thinking otherwise; to view the corporate world as acting unselfishly is wilful self-deception. If they were [acting altruistically], they would conduct their core businesses very, very differently. And when we fail to insist that government play its part in protecting the public interest, we renege on our responsibility as citizens. This is just laziness, which is not, to put it mildly, one of the ethical virtues.

D’Arcy Levesque: This is really about corporate social responsibility versus altruism. We view this as an essential part of being a good neighbour, whilst demonstrating our commitment to CSR. Fundamentally we view this as simply good business. We use our dollars, corporate resources and human capital to support organizations that contribute to the economic and social development of communities where we live and work.

Enbridge takes great effort to ensure that we promote and support our community partners over and above ourselves and unconditionally understand the reputational risks in positioning ourselves over the organization. By respectfully featuring the brand of the non-profit organization in the community, we are providing an opportunity to champion our partner and to showcase their community leadership and the good work that they do in our communities. By helping them tell their story and raise their profile to the general public, we believe this is a good thing to do.

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