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Brand StrategyMay 6, 2022

Brand Donations: How Transparent Should You Be?

May 6, 2022
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Cory Schröder
Senior Content Marketing Manager

So, your brand has decided to donate a certain amount of money, goods, or services to a worthy cause. Fantastic! More often than not, that cause aligns closely with your brand’s values and reinforces its mission statement.

After all, you wouldn’t waste money or resources on a cause or idea that your brand disagrees with, would you?

For example, consider TOMS’ 2020 donation of one-third of its net profits to its Global Giving Fund. This donation fell in line perfectly with the brand’s professed values and allowed TOMS to show support to its customers during a hard time in a public way.

Or, think about Sephora’s participation in the 15% Pledge, which dedicated 15% of its inventory & shelf space to Black-owned businesses. The brand’s Chief Merchandising Officer, Artemis Patrick, stated that the donation was about:

“diversifying (their) supply chain and building a system that creates a better platform for Black-owned brands to grow while ensuring Black voices help shape our industry."

The goal of this donation fell in line with one of Sephora’s overarching brand values: empowerment. Sephora strives to empower its customers and impact their lives “through the unlimited power of beauty” — and was able to uphold that value through its involvement in the 15% Pledge.

So, if your brand is looking to donate money, time, goods, or services in 2022 and beyond, what are your options? And how transparent should you be? Do you shout it from the rooftops for all to hear or do you donate quietly and privately?

There are pros and cons to each option to be sure, and we’ll break them all down here.

What is A Brand Donation?

Source: Pexels

First, let’s start with a simple definition. A brand donation can be defined as any instance in which a company donates money, time, goods, or services in support of a cause, charity, or movement.

Most commonly, brands donate money to charities that align with their values or provide non-profit organizations with free contributions of the brand’s products or services.

No matter how your brand decides to donate, there are a few different ways that you can go about doing it. We’ll outline the top three options next.

What Options Do Brands Have When Donating?

When making a donation to a cause, brands have to carefully consider the “how”. After all, it’s much more complicated for a brand to make a donation than for an individual to do so.

Brands need to consider their values, mission statement, and goals — as well as how consumers will perceive said donation.

Keeping all these factors in mind, let’s discuss the three top options.

1. Donate Publically & Share Amount

The first option is the most transparent — as it means a brand publicly announces both the charity or organization it’s donating to, as well as the amount of money, goods, or services it’s donating.

While this is a common option for many brands, it does have both pros and cons to consider.

Pros:

  • Free publicity & increased brand awareness

  • Increased trust with customers

  • Positive consumer perception

  • Improved employee morale

  • Tax deductions

Cons:

  • Open to public scrutiny

  • Can alienate some consumers

  • Diverts resources

Should your brand decide to go with this option — making both the donation and the amount publicly known — there are plenty of reasons why it could benefit your company.

From increased marketing opportunities to improved employee morale and engagement, it makes sense that many brands choose option 1. But, keep in mind that, as the most transparent option, this method can leave a brand open to a great deal of public scrutiny and may even alienate some consumers.

If you choose to go with this approach, be ready to deal with a certain amount of backlash — as you’ll never be able to please everyone. But, if the benefits outweigh the risks for you, then being as transparent as possible is the way to go.

2. Donate Publically, But Do Not Share Amount

As the second option for a brand donation, this approach allows for a company to show their support for a cause or organization, but to remove some of the candor — which some view as a safer route.

While you can make the act of donating known, option 2 is a less transparent version of public donation and leaves a brand open to less intense scrutiny.

Of course, there are (very similar) pros and cons to this version, as well:

Pros:

  • Free publicity & increased brand awareness

  • Increased trust with customers (less so)

  • Positive consumer perception

  • Improved employee morale

  • Tax deductions

  • Less opportunity for scrutiny

Cons:

  • Some public scrutiny

  • Can alienate some consumers

  • Diverts resources

  • Less transparent (can decrease levels of trust)

Many brands choose to go with this approach, as it’s a more conservative strategy that leaves them less open to the court of public opinion. Plus, instead of consumers hearing about a brand’s donation and focusing solely on the amount given, they can focus more so on the act itself.

3. Donate Privately

For brands that want to show support for causes or movements they agree with without drawing attention, the final option is to donate privately. In this instance, there are levels of privacy that one can choose from.

Perhaps only the C-level leaders are aware of the donation? Or maybe all employees are aware, but only the C-levels know the exact amount?

If your company chooses to donate privately, you have to do so in the manner that best suits your individual needs.

For this option, the pros and cons are:

Pros:

  • Support a cause that matters to your brand

  • Avoid offending consumers who disagree with your chosen cause

  • Increase employee morale (depending on who knows)

Cons:

  • No improvement of brand awareness

  • No impact on brand image/consumer perception

  • No impact on consumer trust

By far the most conservative and safest option, this approach allows a brand to give to a cause they feel is worthy — without having to deal with the PR angle. After all, for some brands, donations are given simply for the impact they’ll have on the cause or organization chosen.

Which Style of Donation Fits Your Brand?

Source: Pexels

Never forget — modern consumers have strong opinions and they’re not afraid to share them. And it’s a well-known fact that you’ll never be able to please everyone. While making a donation to a cause may improve your brand perception among some consumers, it could damage it with others.

Of course, the thoughts and opinions of your target audience always matter the most — but amplified by modern cancel culture and social media, sometimes a few angry voices do end up being the loudest.

Therefore, you have to consider some important factors when deciding which donation style would be the best option. To do so, ask yourself questions like:

  • Are we ready to deal with possible backlash from angry consumers?

  • Do our target audience’s values align with this cause/movement?

  • Does the benefit of publicity/positive consumer perception outweigh the possibility of backlash?

These questions and more should be seriously considered — with input from a myriad of sources, such as HR, Marketing, Sales, Finance, and Product. Make sure to get perspective from multiple teams, as each department will bring a unique perspective.

However, at the end of the day, only you and your colleagues know what’s best for your brand — and no one else can make the decision for you. But, if you do end up making a blunder, fear not — there are concrete ways to recover from a brand scandal.

How Would Donation Transparency Benefit A Brand?

There are many ways that making a transparent brand donation can benefit a company — and we’ve covered most of them already. Still, it doesn’t hurt to briefly discuss the overall concept of transparency and the impact it has on modern consumers.

According to data from The Light Digital, 86% of people reported that “transparency is more important than before” and 94% of consumers said, “they are more likely to be loyal to a brand that offers transparency.”

Now, brands can show transparency in many different ways — from being open about where they source their products to how they treat their employees to their pricing. Having “transparency” as a brand value means that a company does its utmost to be honest, open, and candid with consumers wherever possible.

And for many consumers, this extends to brand donations. So, if one of your brand values is transparency, then you should consider being as truthful and open as possible when making donations.

Final Thoughts

Ultimately, there are compelling pros and cons to both public and private brand donation strategies — it’s all down to your existing brand values, your target audiences’ preferences, and your company’s goals.

Keep in mind, full transparency might not always be possible when dealing with more sensitive issues. You have to be realistic and weigh all the possible outcomes before deciding on an option. But no matter what you choose, what’s most important is that you support a cause your brand believes in.

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