Tuesday, December 18, 2007

Giving when it hurts

You know it as a surefire way of raising money for charity. Experts call it “imbedded giving”—channeling a portion of sales from a particular menu item to a popular cause, and thereby encouraging patrons to buy more of it. Now politicians are redefining it as a practice rife with the potential for abuse and therefore in immediate need of regulation. If they have their way, you’d have to follow certain rules if you want to donate a dollar from the sale of your signature gingerbread-man cookies to some toys-for-underprivileged-kids program.

Sen. Robert Menendez, a Democrat representing New Jersey, has already disclosed plans to introduce legislation this week that would govern the practice. Menendez wants to require any retailer that uses imbedded giving to get prior approval from beneficiary group before its name can be used, and to disclose how much money is actually channeled to the charity.

“Too often consumers have no way to know if their dollars are actually going to the intended causes, and some charities are not aware that their names are being used by retailers,” Menendez said in a statement. “We need to ensure that charity is not being used solely as a sales pitch.”

Menendez aired his plan after The New York Times reported that some of the charities it contacted for an article on imbedded giving were unaware they were the beneficiaries of the promotions. Yet their names were prominently used in the sales pitch. Some expressed outright horror that their cause was being associated with businesses with which they would rather not have any connection.

No restaurants were mentioned in the article or in Menendez’s announcement on Friday. But the industry has frequently used the technique, most notably for Dine Out America, a fundraising effort undertaken in the wake of Hurricane Katrina. Restaurants nationwide were encouraged to channel proceeds from a particular night to victims of the catastrophe, and were lauded for their effort.

You have to wonder if such a thing could be undertaken again if it also involved the rigmarole of proving the money was actually donated.

1 comment:

  1. I think restaurants need to be very careful in their giving. Having worked for a national, hugely successful concept, we received at least 20-30 requests per week for donations, and were not very diligent in finding out exactly what those organizations were about.

    I also worked for a company that would only give donations to companies that they checked out with phone call/web research, and would focus on small, local organizations. The big hitters like the Heart Association, Susan Komen, etc have a huge list of annual donors, so we focused on the very small area ones and felt we made a bigger impact.