The Global Fund to Fight AIDS, Malaria and Tuberculosis in Africa is under fire after revealing “grave misuse of funds” in four countries where it operates. The Fund released its report last year, but an Associated Press story brought renewed attention to the situation this week, revealing the Global Fund is demanding the recovery of $34 million in grants out of $13 billion.
In the U.S., the development fund may be better known as the NGO behind the (PRODUCT)RED cause brand. (RED) is backed by a house of iconic brands, including Starbucks, Apple, NIKE and American Express, who have successfully helped generate more than $160 million for the Fund through a unique licensing agreement to sell (RED)-branded merchandise. For these or any companies facing donation fraud or other crises within their cause partnerships, we recommend the following short-term measures to help protect the cause brand and retain consumer trust:
- Review existing NGO/cause partnerships to confirm whether credible auditing is in place and whether audit results are accessible to the company and its stakeholders.
- If any doubt exists, make a formal request to partners for information and escrow further donations until such auditing and results are confirmed.
- Prepare a reactive public statement to this effect, for use in the event of media or consumer inquiries. Make sure appropriate employees – from customer service representatives to store managers – are armed with this statement to respond to questions in real time.
- For major ongoing product-based partnerships such as (PRODUCT)RED, post the statement on the media page of the company’s website. Encourage consumers to continue supporting the cause, but assure them their money is safeguarded until it will have the social impact the company desires.
- Keep consumers informed of any changes in how their money will be directed as things progress.
Even the most successful and celebrated brands can face immense challenges with the complexities of on-the-ground activation. The situations faced by programs such as (PRODUCT)RED and Pepsi Refresh (which has also experienced its share of controversy) should reinforce to all companies the importance of ongoing cause brand management and transparency to maintain consumer trust.
Visit our website for Cone’s full POV on the Global Fund crisis.