Having been involved in several flames on the subject I feel compelled to articulate why I don’t like the fact that Facebook CEO Mark Zuckerberg donated $500k in FB ad credits to the Red Cross to help out victims of the earthquake who shook Central Italy on aug. 24th.
- is this a policy? there are about 1,500 earthquakes of magnitudo 5 and above per year. Are we to expect a similar donation to the Red Cross for each one? Flattened houses and dispossessed people count the same whether they are European, American, Asian, Australian or African, right? I expect therefore that the Red Cross (or Red Crescent, as the case may be) gets $750M per year in ad credits turning them overnight into one of the world’s largest FB ads brokers, a role for which I am sure they have experience and skills…
- “in kind” donations are not immediately helpful. True, they have SOME value for the recipient, but exactly how much is not clear (see #4); plus they place on the recipient the onus of transforming whatever goods the donor gives into the thing that an organization like the Red Cross really needs (i.e. money) and introduces a time delay in the availability of the additional resources. What would you think of Philip Morris giving a truckload of cigarettes, Coca-Cola a tanker of Coke or a University 100 MBA scholarships?
- the public announcement stygma. Should donations be advertised? An old discussion which was settled (for me, not by me) long ago, when I was the Country Manager for Lotus Development, a company which gave a percentage of its net profit in every operation to local charities each year. Not only this gift was prohibited from getting ANY sort of publicity, but the committee deciding who would get the yearly gift was formed by employees (not managers). I never knew who received it in the seven year I ran the Italian operation.
- transparency. That’s the flip side of #3: shouldn’t donations be public? Don’t shareholders have a right to know? In my opinion they do, as they are the ones ultimately donating, but disclosure should be made at policy level (i.e. how much the company intends to donate and with which criteria the beneficiaries will be chosen) NEVER at the recipient level. Transparency is an additional reason “in kind” donations are bad: I suspect once you factor in all the transformation costs and fees, the real value to the receiving organization is much diminished, so shareholders don’t even know exactly how much they are agreeing to give.
- decision process. In other words, who decides? In this case it appears it was mr. Zuckerberg’ own decision, and while he’s the Founder, the CEO as well as one of Facebook’s largest shareholders, Facebook is NOT his property alone: others should be involved in this decision, representing other shareholders and proposing worthy destinations for corporate generosity.
So all in all (while it is obvious that ANY help is welcome) what this boils down to, at least for me, is the fact that mr. Zuckerberg is a person of vast wealth: if his good feelings prompt him to give to help people in distress, praise to him, but he should use some of his own money (= cash) and not mess with the Corporate Social Responsibility of Facebook.
Maybe he ought to take a lesson or two from Bill or Warren….