Mark Rosenman: Commercializing the Public Good: "The first of these was cause-related marketing -- arrangements in which for-profit enterprises boosted their brand image and sales by tying some small portion of their profits to a charity or social need. Arrangements like Product RED, while generating some good, always seem to benefit the commercial enterprise more than the nonprofits they were intended to help. Indeed, studies have shown that such arrangements actually reduce individual consumers' donations to the causes they ostensibly support, as well as altruism in general. As tax-evading Product RED spokesperson Bono once famously said, You don't have to give money anymore, you can just shop. Similarly, when corporations try to build their customer base using social networking and crowd-sourcing for their contributions programs, it is principally the businesses and tech-savvy charities that win.
Cause-related arrangements were followed by 'social entrepreneurs' determined to use the wisdom and experience of the market to rationalize the charitable sector and bring it to higher levels of efficiency and impact. Often backed by 'social venture capital,' they sought a new way to 'do the deal' to leverage private resources for public good while still achieving significant returns on investment, thus disrupting the flow of capital into existing philanthropic foundations."
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