Companies give back by linking products sales to charitable donations

More manufacturers are linking product sales with charitable contributions to not only impact society, but also to strengthen their brands and give retailers interesting stories to tell.
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While hatching plans to form the Hydroflask water bottle company, company founder Travis Rosbach was reading Yvon Chouinard’s “Let My People Go Surfing.” Rosbach told SNEWS® that the book inspired him and his partner, Cindy Morse, to create something that was much more than a bottle company.

“When I finished reading it, I said, ‘Holy cow. What can we do that helps people?’ The book really told me that we can be a business, but we can also help empower our customers to think about what they’re doing in their everyday lives,” he said.

At the same time they formed Hydroflask (www.hydroflask.com), Rosbach and Morse established the website FivePercentBack.org, and through that organization the bottle company donates 5 percent of gross revenue of product sales to numerous charities.

Hydroflask is one of a growing number of outdoor industry companies leveraging product sales to benefit social and environmental organizations. Manufacturers told SNEWS that this method of giving not only allows them to impact society, but also helps define their brand, differentiate their company and provide retailers compelling stories to tell on the shop floor. (Click here to read a SNEWS Fitness magazine article about "passion marketing.")

A shift in corporate culture

Anyone who has seen the recent trailer for the movie sequel, “Wall Street: Money Never Sleeps,”is reminded of the 1980s corporate culture where greed was good. But that’s not the case these days, as company owners are more focused on social responsibility, partly because consumers demand it.

“It’s become more important to consumers,” said Phyllis Grove, vice president of marketing for Keen (www.keenfootwear.com), which is funneling sales from its new Santiago shoe to fund micro-loans that will help revitalize the Gulf Coast and communities throughout the world. “The expectation these days from consumers in general is that companies should have strong corporate responsibility. Fifteen to 20 years ago, it was an exception.”

While companies seem to have developed more of a conscience, they are also hitching product sales to charities and other giving groups because it creates great stories around products, and these stories appeal to consumers.

“You always hear about form and function, but there’s a third ingredient a lot of brands are missing, and that’s ‘fable.’ Consumers want to buy into a story,” said Eric Barnes, founder and CEO of Kor Water (www.korwater.com), which gives 1 percent of its water bottle sales to the giving organization, 1% For the Planet (www.onepercentfortheplanet.org). “You can’t just sell on features and benefits anymore when you’re selling a premium product.”

Defining the brand

Though consumer attitudes have spurred this change in corporate culture, business owners have likewise placed a premium on social responsibility and made it a cornerstone of their companies. For some manufacturers, the primary reason they exist is not to build the latest widget, but to serve a greater cause.

“When Paul Shustak and I started Kor, we wanted to be more than just a reusable bottle company,” said Barnes. “We felt deeply about creating Kor as a brand focused around water, which is such a critical issue, and not just a Third World problem, but also a domestic problem.”

Barnes said the mission of the company is to tell the story of water through its products and raise awareness of issues surrounding ocean protection, wetlands protection, container recycling and the global water crisis. Barnes said that Kor’s support of water-oriented organizations actually shapes the brand’s identity and makes its mission clear. “We understand what we stand for when we wake up every day,” he said.

These days, companies view charitable programs as a means to affect the very culture of the company. As Eagle Creek began a comprehensive re-branding effort this year, it recognized an opportunity to refine the company’s core values. Eagle Creek’s leaders wanted to emphasize the idea that the company and all its employees are tied closely to the places where people enjoy adventure travel, so it implemented a micro-loan program to benefit communities all over the world. Eagle Creek gives each employee a $25 credit, and the employee can give that money to a charitable organization through Kiva.org, which has facilitated $100 million in micro-loans. 

“With the re-launch of the brand, we had an opportunity to look at who we are and the culture of the brand,” said Veronica Cox, brand director for Eagle Creek (www.eaglecreek.com). “Our company is really a group of travelers, and one of our values is to understand the world around us, and let that trickle into every part of the company.”

Strategies for giving

In the past, the main giving strategy for most U.S. companies was to simply write checks to charities. But companies today are employing a number of different strategies that involve them more deeply in the process of giving back.

As with Eagle Creek, micro-loan programs have emerged as an increasingly popular method of directing funds to beneficiaries. As a company, Keen has always been very active in supporting social and environmental causes, but it realized that it could impact society in new ways by supporting micro-loans through Kiva.org. The company tapped into the intriguing story surrounding its new Santiago shoe -- built by hand in the Dominican Republic on refurbished equipment -- and donates sales of the shoes to micro-loans for people in developing communities throughout the world. “Maybe someone wants to start a food cart business, or a cobbler wants to buy equipment,” said Grove. While most micro-loans through Kiva.org are small (sometimes as little as $25), they can add up and really make a difference, she said.

While Keen wants to serve struggling communities around the world, it is currently focused on directing micro-loans to people on the Gulf Coast affected by the oil spill, and its greater goal is to help areas all over the United States. Grove said Keen will set up a micro-website to inspire people to make micro-loans to benefit people locally, as well as abroad. “We want people to be able to take a micro-loan and take their business to the next level and support themselves and their family, and rejuvenate their community,” she said.

Of course, some smaller businesses do not have the resources or the expertise to create additional websites and launch complex giving programs. For these reasons, Kor Water opted to donate sales from its bottles to 1% For the Planet, an organization created by Patagonia founder Yvon Chouinard and Craig Mathews, owner of Blue Ribbon Flies, in 2001. Barnes said this organization, which has more the 1,400 members, offers a structure that simplifies the giving process and also lends credibility to the company’s charitable efforts.

GivingBack_1PercentforPlanet.jpg

“There’s a lot of skepticism out there due to greenwashing,” said Barnes. “And 1% For the Planet is respected. It gives us a sort of Good Housekeeping seal of approval.”

Rosbach of Hydroflask also considered partnering with 1% For the Planet, but he wanted his customers to be able to choose from a wider variety of charities than is approved by 1% For the Planet. So, his company set up its own organization, FivePerentBack.org, and he allows customers to suggest which group they would like to benefit. “It’s really about choice for the customer,” he said.

While Hydroflask has focused on allowing consumers to determine who benefits from the product sales, Patagonia Footwear has added a new twist on giving by allowing retailers to choose environmental education groups in their area to receive funds from product sales.

“Rather than us determining where the dollars go, we thought, let’s have our dealers do it with us,” said Sue Harvey Brown, marketing manager for Patagonia Footwear (www.patagonia.com). The company is piloting a new program through 16 dealers, in which 1 percent of sales of the Advocate Moc (photo - right) go to a group chosen by the retailer. The beneficiaries are approved by 1% For the Planet, which facilitates the giving. Also, as part of the program, the retailers host special Advocate Weeks, and during these two-week periods, $10 from the sale of any Patagonia Footwear shoe goes to the retailer’s designated organization.

Benefits for retailers

Brown said a great aspect of the Advocate Week program is that retailers gain as much from the experience as the environmental groups.

“Some retailers may have not done this type of thing, and now they’re making a connection to a local organization and showing their support of their community,” said Brown.

Also, during Advocate Week, the environmental groups are encouraged to have in-store events to discuss their work, and this creates a compelling gathering for employees and customers. Also, it’s pretty much a turnkey operation, with Patagonia providing support for everything from online promotion to in-store signage, so it really helps retailers that lack experience hosting such events.

Programs that tie product sales to giving not only build ties between the retailer and the community, but they also generate great talking points for retail staff. 

“It brings up another topic of conversation,” said Barnes of Hydroflask. “Any time you can engage your customer more, you’ll benefit.”

Companies are particularly focused on providing retailers training and educational materials to tell the story behind their products and the groups they benefit.

“We’ve tried to really incorporate the FivePercentBack.org logo into our branding, and we’re now developing countertop POP materials,” said Barnes. “In places where donations aren’t as strong, we tell the reps to emphasize it with those retailers. We want the retail employees on the floor to know just as much about FivePercentBack.org as they know about our bottles.”

As with Hydroflask, Kor Water’s retail training emphasizes the company’s mission to support water issues as much as it deals with product education. Barnes said he wants retailers to understand that the company is not just selling bottles but also trying to raise public awareness of all issues surrounding water. And he hopes that the direct link between bottle sales and advocacy will raise consumer awareness of what he calls a “new normal.”

“The new normal is carrying a reusable bottle,” he said, “but a new normal happens over time, like everybody wearing a seatbelt.”

As for companies, they’re realizing a new normal as well. In the ‘80s, Gordon Gekko preached that greed is good. But these days, giving is good.

--Marcus Woolf

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