McDonald's Lesson to Companies: Charity, Impact Better be on the Menu
McDonald's has a public relations problem. In a new report, Clowning Around with Charity, McDonald's is portrayed as cheap, deceptive and selfish. Here are the highlights.
- McDonald's charitable giving is just .32 percent ($34 million) of its pre-tax profits. Compare that to the one percent of pre-tax profits that generous companies donate to good causes.
- McDonald's raises $50 million from customers at over 34,000 restaurants worldwide. According to the report, McDonald's takes "undue credit" for their customers' generosity.
- Ronald McDonald House Charities are not 100 percent funded by McDonald's. I was shocked! Company donations only cover ten to twenty percent of houses' operating costs. Like every other nonprofit, houses have to fundraise for the rest.
There are so many lessons here for companies. But I want to focus on three.
Give before you ask. Any company that asks customers for donations, but isn't dipping enough into their own coffers is asking for trouble. Don't just rely on OPM (aka other people's money). That's like offering to host Thanksgiving dinner at your house and then expecting everyone else to bring the food and trimmings. Be a gracious host.
On average, companies donate .80 percent to charity, which, by the way, is half of what they were donating a generation ago. Businesses should aim to meet or exceed this industry average.
A good example of a company giving before they ask is Shaw's Supermarkets. After the Boston Bombing last April they posted this sign on their registers. They kicked off their customer fundraiser by donating $100,000. Then they offered to match shoppers' donations up to $100,000. That's leading with your checkbook.
If you're going to own something, own it. McDonald's has its name splashed across every Ronald McDonald House in the world. They should be contributing more than 20 percent to operating costs. In many instances with individual houses, it appears they are donating a lot less. I'll never look at a Ronald McDonald House in the same way ever again.
I've always admired Chili's Grill & Bar commitment to their partnership with St. Jude Children's Research Hospital. They sell Create-a-Pepper coloring sheets, merchandise and food that benefits the hospital and even have an annual donate profits day in September that gives 100 percent of the profits to St. Jude. They've also experimented with QR codes and hashtags to raise money and promote the partnership. It's all part of a ten year, $50 million commitment Chili's made to St. Jude. A commitment that Chili's surpassed two years early.
Make your customers and employees the stars. The report complains that McDonald's is lumping customer donations in with their own and not giving credit where it is due. Boy, those days are over. Companies need to put a spotlight on the real stars of fundraising: employees and customers. The company is black powder and cause marketing is the fuse. But stakeholders are the match that make things ignite! Don't forget that when people start pointing and oohing and ahing over the fundraising results.
If I was McDonald's, I would:
- Raise charitable giving to one percent of pre-tax profits, or $100 million.
- Pledge to cover a minimum of 50 percent of the operating costs of every Ronald McDonald House in the world.
- Have more fundraisers in restaurants that include a company match. Donation boxes are great, but they're passive fundraisers. I would do more programs that actively engage customers and employees and would give when they give.
These changes will cost McDonald's a lot of money. But it will be worth it because the power of sincerely attaching your brand to a cause is a powerful and wonderful thing.
McDonald's spends nearly a billion dollars a year on advertising. They should trade some of the visibility they get from traditional ads for the favorability that cause marketing offers. Those golden arches need a bigger halo.
