Can Starbucks Buy a “Saving Africa” Image for a Nickel?

Starbucks003.jpg I was curious about what the going rate is these days for attracting customers who want to save Africa. Five cents was a little lower than I expected.

How much money is flowing to Africa from this? Aid Watch’s exclusive investigation consisted of asking about seven Starbucks cashiers around Greenwich Village how often they processed the Starbucks Red card, with its payoff of five cents for Africa per use. All except one cashier said it was rare to see them, maybe 1 or 2 in an 8-hour day. The one exception said they saw them about 10 times a day. So we have a payoff for Africa of between 5 and 10 cents per day per Starbucks cashier, with one outlier of 50 cents a day. This sample is obviously ridiculously unscientific, but perhaps it can attain the status of an anecdote.

The only excuse for my pitiful attempt at estimating RED card revenues is that I think it is really up to Starbucks to disclose to its customers how much money is really flowing to the Global Fund for AIDS in Africa. We are in luck -- Starbucks has a cool (RED) web site that actually documents in real time how many people are buying with the (RED) card (11,115!), how many Starbucks products they are buying (87,257), and how many days of AIDS medicine that translates into (10,146!).

OOPS, sorry, I misunderstood it. This is just a record of how many people have signed up online worldwide (11,115) to join the Starbucks RED campaign, how many Starbucks products they have pledged to buy, and how much that translates into in days of medicine. There is no verification that anyone actually buys the card or keeps their pledge. Even if they did, this would translate into a rather underwhelming contribution of $4,362.85 to the Global Fund. It’s not Starbucks’ fault that their customers don’t show much interest in the RED card, but Starbucks benefits even so.

Bill Gates celebrated the RED campaign as an example of what he sees as world-systemic change towards “creative capitalism,” where companies will respond to “reputational” philanthropic incentives as well as conventional profit ones. Yet if companies can obtain the RED branding, the Saving Africa reputation, for virtually nothing, just how strong is the incentive to give?