No good deeds go unpunished? So what else is new?
The findings of a recent study by the Yale School of Management, published in Psychological Science, shouldn’t surprise anyone in the corporate sector or among foundations wholly dedicated to charitable giving.
The study indicates that people tend to reject philanthropic initiatives that benefit the givers. In terms of public relations, Corporate Social Responsibility (CSR) programs could actually do worse than nothing by diminishing rather than enhancing the reputation of well-heeled donors.
The researchers, Yale professors George Newman and Daylian Cain, call it the “tainted-altruism effect.” They looked at the Gap (RED) campaign, which donates profits from designated clothing items to fight the spread of HIV/AIDS and malaria, and found that their research subjects reacted very negatively when advised that Gap profits as a result. They also looked at one entrepreneurial philanthropist, Dan Pallotta, whose reputational ordeal, after people learned he was highly salaried, first inspired the research.
I have three thoughts to share before corporate America flies into a tizzy and abandons its millions of global dependents to their own devices.
First, we need to do a better job explaining why it’s often appropriate to highly compensate people like Mr. Pallotta. Here again, non-profits are also businesses. If a spirited soul like Dan can provide substantial returns on our investment in him, then we should invite the public to at least consider the possibility that it’s in everyone’s interest to attract and motivate such galvanic leaders. Pallotta earned $400,000 per year as he raised $305 million over nine years for healthcare causes. You do the math.
Second, companies like the Gap can deflect cynical perceptions by focusing more eloquently (and visually) on the people they’re helping – why they’re helping them, and the specific benefits these people enjoy as a result. An eloquent enough narrative will overwhelm jaundiced notions about corporate self-interest.
Third, companies like the Gap can further defuse negative perceptions by openly acknowledging their motives. People are receptive to enlightened self-interest if it’s out in the open. Why not honestly admit how and why, by doing good, businesses also do well?
I offer this advice to corporate givers as disinterestedly as possible. You see, the Melvin and Bren Simon Foundation is not a corporation. We give because we want to. If cynical people don’t buy our toothpaste, that’s ok. We don’t sell toothpaste.