Promising Proceeds to Charity Brings in Business

Are big retailers invoking charities' names to sell more products?

ByABC News
December 18, 2007, 4:05 PM

Dec. 18, 2007— -- It's virtue -- as a sales pitch.

This holiday season if you buy a particular scarf or T-shirt, some of the money will go to charity.

It's a trend that's caught on big time, but experts said it's sometimes more about selling than giving.

What questions should you ask a charity before you open your wallet? Click here to find out.

Tim Ogden at Geneva Global, a philanthropy consultantancy, said, "There's no question that for a lot of retailers, it's about a marketing gimmick, just like '20 percent more' and 'new and improved.'"

Lucy Bernholz at Blueprint Research & Design Inc., another philanthropy adviser, said, "They're companies. They're trying to sell more products, and they're using charity as a way to associate themselves with a good cause."

Not sure if a charity is legitimate? Click here for a list of guidelines you should consider before you make a donation.

One example of what makes some people skeptical is the Barneys New York catalog.

It says if you buy a particular item, some of the money will go to the World Wildlife Fund, which fights to protect animals and the environment.

The problem is, nobody told the charity.

John Donoghue at the World Wildlife Fund said, "We were surprised to see that we were in that catalog ... and were told by a reporter that that was the case."

Barneys said in a statement, "Certain of our merchandise vendors agreed to make donations to the charity of their choice, which benefits the environment. The participating vendors and the charities to which they will be making donations are set forth in our holiday catalog. A number of these vendors have already made their donations, and it is our understanding that the balance will be making their donations in the immediate future."

Another problem: Consumers often don't know how much of their money actually goes to charity or how it's used.

What's more, customers can't get a tax write-off for this kind of giving -- but the companies get all the credit for being charitable.

Tomorrow, Sen. Robert Menendez, D-N.J., introduces legislation that will require companies to inform customers how their money is being used and to inform charities when their names are being used.

These programs can work well when they are put in place with full transparency. The World Wildlife Fund has received some proceeds from J.C. Penney and other retailers, which have sold 1 million girls' T-shirts bearing the Fund's logo, opening up an audience the group never would have otherwise had and what it calls "a million walking billboards."

"It's a way for us to get a new revenue stream, to be able to advance our conservation work; it's a way to make our work real to people and become part of their lives," explained Donoghue. It gives us reach to consumers and potential supporters that we could never afford to reach on our own."