Advertising and Non-profit/Charitable Organizations - Case Study Example

Advertising and Non-profit/Charitable Organizations: The Ethical Issues By Advertising and Non-profit/Charitable Organizations: The Ethical Issues I. Introduction Marketing is typically associated with advertising which in turn infers a solicitation of business exchanges. Non-profit organizations are designed to offer services with no expectation of monetary reward. It is therefore hardly surprising that the concept of advertising by non-profit organizations has been the subject of much controversy (Herman, 278). Ethics therefore commands that in advertising, non-profit organizations take an approach which reflects a call for fund-raising, public education, recruitment of volunteers or communications (Herman, 278). This research will look at the ethics of advertising from the perspective of non-profit organizations and consider whether or not it is ethical for non-profit organizations to use funds raised for charitable purposes to run advertisements. This is particularly important since the Better Business Bureau sets standards for charitable organizations which dictate that they help donors make informed decisions about lending support by examining how they solicit funds and how those funds are utilized(Better Business Bureau). To this end, the research will focus on the strategies employed by Amnesty International, the Red Cross and United Way. Ultimately these three non-profit organizations will be examined with a view to determining the ethical considerations relevant to advertising/marketing and whether or not it is ethical or fair to consider returns on the funds invested in advertising. II. Non-profit Organizations The ethics of non-profit organization advertising cannot fully be understood without first evaluating the nature and character of non-profit systems. In its broadest definition, non-profit organizations are entities that are recognized by tax authorities as entitled to generate profits but are not permitted to distribute profits to those that control and manage the organization (Hankin, Seidner and Zietlow, 2). Obviously, the designation is important for tax benefits and exemptions. In each case a non-profit organization will typically be implemented with Articles of Incorporation and Bylaws which provide for the objects, regulatory process and the procedure for conducting the organization’s business. The Articles will therefore form the basic framework for setting the non-profit organization’s policies and practices (Hankin, Seidner and Zietlow, 4). Much will depend on the purpose for which the organization is formed. They are a wide range of non-profit organization services. These services are primarily social, economic and political in nature (Boris and Steurle, 66). In this regard, non-profit organizations can take the form of colleges, churches, museums, hospitals, labor unions, political parties, civil rights entities and environmental groups and many other types of organizations (Boris and Steurle, 66). The unique character of non-profit organizations creates a thin line between mission strategies and commercial activities (Tuckman and Chang, 629). Non-profit organizations are permitted to make a profit within the framework of its stated missions and objectives. The approach taken can erode public trust, a significant factor for the success or failure of any non-profit organization (Tuckman and Chang, 629). At the same time, non-profit organizations require funds to offer and provide its respective public and/or private services. It therefore follows that the manner in which the organization markets its products, and make public requests for donations is the subject of close scrutiny. In this regard, attention is played to ethics in terms of advertising. III. Ethics Issues for Advertising by Non-profit/Charitable Organizations It has been argued that advertising is devoid of a single definition (Tipper, Hollingworth, Hotchkiss and Parsons 4). The best way to describe advertising is that: …it is the organized application of the force of publicity to the sale of commodities or service, by increasing the public knowledge and desire for the items specified therein (Tipper, Hollingworth, Hotchkiss and Parsons) When this description of advertising is applied to non-profit/charitable organizations it must be measured against the nature and character of their products and services. In this regard, non-profit/charitable organizations typically use advertising products as a means for soliciting funds and participation in their services that they provide. This will necessarily involve educating the public and perspective donors of the organization’s history, policies and services. Successful advertisement by non-profit organizations will therefore largely depend on the public and perspective donors’ with respect to the organization and its services. In any advertising venture, much reliance is placed on ethics. Ethics in advertising relates entirely to honesty and integrity in promoting a product or service (Castleberry, French and Carlin, 39). There are two approaches to advertising which can compromise honesty and integrity in promotion strategies. These approaches are the “maximization of personal wealth” or the “maximization of personal welfare” (Castleberry, French and Carlin, 39). In determining what approach to take along ethical lines the organization or party promoting a service or product must take account of those who will respond to the promotion, those who will advertise the product and the medium through which the advertising will be displayed (Castleberry, French and Carlin, 39). Non-profit organizations have a particularly onerous responsibility in determining whether to approach advertising as a means of maximizing personal wealth or maximizing personal welfare. It would appear that based on the nature and character of non-profit organizations both approaches are essential for promoting its services and soliciting funds for ensuring that their services can be delivered. In the foreground, non-profit organizations’ success in all areas depend entirely on how their services are marketed and much depends on the reputation of the organization. Pam Kildow warns that: Even the appearance of impropriety can be detrimental to philanthropic foundations and charitable organizations (Kildow 1). The public as well as donors are required to trust that the non-profit organization will put solicited funds to the use for which they are promised and intended. Vartan Gregorian argues that ethics in non-profit organization conduct requires not only acknowledging the potential for abuse, but denouncing them. (Gregorian 43-44). Gregorian delineated two possible sources of abuse of trust on the part of non-profit organizations, each of which will guide the ethics of non-profit organization advertising. These are: 1. The founding charter or byelaws’ intent; 2. Public confidence and confidence of those who are ultimately the beneficiaries of the non-profit organization (Gregorian, 43-44). These two ethical standards are the benchmark by which non-profit organizations are expected to conduct their day-to-day business activities. As a result, adhering to the mission outlined in the non-profit organization’s Articles and ensuring that the fundraising publicity are conducted with a view to ensuring public, donor and beneficiaries’ trust and confidence. Provided these factors are the approaches taken by non-profit organizations in advertising, the advertising is entirely ethical. In other words, as long as the non-profit organization does not dishonestly represent itself and its services, the advertising is perfectly ethical. Maximization of profits and welfare in any advertising mission is required to be accompanied by honest and frank disclosure. Additionally, the Better Business Bureau’s Standards for Charities require that the use of funds are justified (Better Business Bureau). Better Business Bureau mandates that 65 percent of a charity’s income be spent on its mission goals and only 35 percent be spent on fund raising which would include advertising (Better Business Bureau). Within these parameters a charity is permitted to conduct solicitation and information distribution “by any means” provided they are accurate, honest and “not misleading” (Better Business Bureau). This is so because, it is recognized that fund raising efforts are typically the only means by which charities and non-profit organizations can convince donors to provide funds for their respective causes (Better Business Bureau). What distinguishes the non-profit organization from the for profit organization in advertising responsibility is the wider meaning of welfare and profit maximization. The for profit organization is entirely focused on shareholder welfare and profits (Sneirson, 439). The non-profit organization is required to focus on the manner in which profit maximization serves pro gratis beneficiaries. Crossing the difficult line between personal and public wealth and all the while remaining ethical can be a particularly onerous responsibility for non-profit organization. However, major non-profit organizations have been able to do this successfully. The manner in which a non-profit organization can advertise its services to maximize its profits for the public good in a ethical way is demonstrated by evaluating some of the publicity/advertising campaigns orchestrated by the three major charities. IV. Approaches Taken To Advertising by the Red Cross, United Way and Amnesty International A. The Red Cross Confidence in all organizations have been negatively impacted by corporate scandals such as those relating to Enron and MCI-WorldCom (Chisolm 142). The Advertising Education Foundation acknowledges these consequences and further notes that the down town in the economy together with a decline in institutional confidence has made it difficult for “philanthropic giving” within the non-profit industries (Advertising Education Foundation). The Red Cross was operating against this background when it attempted to recruit volunteers and donations in response to the September 11 terrorist attacks on the US. Moreover, the Red Cross typically relies on the generosity of the media with donated ad space and air time (United Business Media). It therefore follows that from an ethical perspective the Red Cross should have no difficulty meeting the 35 percent bar set by the Better Business Burear. Of course, the question of funding for advertising by non-profit organizations is not the only ethical question. The message sent via advertisement and the technique used for soliciting funds is also a question of ethics. In order to launch a ethical campaign the Red Cross focused its attention on public perceptions of the organization and considered appropriate approaches to benefactors in general. The Red Cross took an honest and frank approach to its mission, and rather than focus on isolating the injured from the uninjured, the Red Cross took the position that we were all one. The lead-in to this advertising campaign was the launching of a brand under the name and style, “Together We Prepare” (Advertising Education Foundation). Together We Prepare assessed the public’s fears and anxieties in response to the September 11 attacks and the level of mistrust garnered as a result of the recent spate of corporate scandals. The campaign quite simply did not reach out for money, but asked for assistance not only for others but for self-help. In this regard the campaign was marketed with five individual pleas to the public with preparedness and responses to emergency situations. They can be summarized as follows: 1. Ensure that you and your family have an emergency preparedness and response plan. 2. Ensure that you have an emergency supplies kit in your possession. 3. Donate blood. 4. Volunteer your services. 5. Donate Money (Advertising Education Foundation). This approach to promoting the Red Cross and obtaining volunteers and donations appears to be a genuine attempt to improve upon and promote the organization’s missions. The order of the pleas made to the public tends to suggest that the Red Cross believes that we can help others best if we help ourselves first. Once we have secured our homes and our families in emergencies we can help everyone else by donating blood, services and/or funds to the Red Cross who will obviously help those who were not able to secure their homes and families in times of emergencies. This ideology is consistent with the campaign brand Together We Prepare. Together We Prepare promotes a spirit of unity and attempts to avoid segregation of the organization’s public services from the benefactors and beneficiaries. It takes the position that the Red Cross is for everyone, those who need help and those who can offer help in one form or another. In light of the fact that the advertising campaign seeks to encourage self-help, recruitment of aid in all of its various forms and the promotion of unity among the needy and those who can help, it is difficult to characterize the promotion as an advertisement aimed at maximization of personal profits or personal welfare. The promotion is instructive as well as promotional and puts the Red Cross at the center of gravity where, help can be obtained and help can be provided. Since the Red Cross is a non-profit organization, it relies on help and donations and promotional campaigns such as Together We Prepare gets the message out to the general public in an ethical way and in a way that does not compromise the organization’s mission. B. Amnesty International Amnesty International, like the Red Cross is an international non-profit organization. Amnesty’s organization has as its mission the promotion and protection of basic human rights on an international level (Amnesty International). Amnesty bases its advertising campaigns on recruiting members and supporters (Amnesty International). Like the Red Cross, Amnesty International typically relies on pro bono advertisement (Amnesty International’s Torture Porn Video). Therefore, the question of unethical use of funds for advertising would not typically arise. Advertising is a great part of Amnesty’s work since the primary goal of the organization is to investigate human rights violations and to generate public awareness. A lot of this occurs in the form of advertisements (Amnesty International). Like the Red Cross, Amnesty International bases its advertising campaigns on promoting its image and the work it does and by promotion recruits aid in the form of volunteer services or donations. Amnesty’s approach is primarily to promote public awareness and to encourage collective action by putting pressure on governments and private entities to respect and protect human rights (Amnesty International). In this regard, advertising is similar to the approach taken by the Red Cross. The idea is to let public awareness solicit aide in whatever form individuals can. In this regard, the advertising undertaken by these non-profit organizations are ethical as they do not attempt to maximize profits but rather to maximize public concern and participation in what should be a shared concern. Last year for instance Amnesty went public with an advertising campaign designed to heighten awareness and concern about the interrogation practice known as “waterboarding” (Sweney). The advertising campaign was published in cinemas and on the internet. It involves a 90 second film called Stuff of Life. The advertisement starts in slow motion with shots of a water trickling down with music that typically accompanies water ads on television (Sweney). The frame then moves into an interrogation setting where a man is seen fastened to a table on his back with his head tilted backwards, his mouth held open while water is poured into his mouth and nose (Sweney). The waterbording ad campaign formed part of a larger advertisement campaign called unsubscribe which aims at gathering support for a call for human rights respect during the war on terror (Sweney). This advertising strategy is an example of the approach that Amnesty International takes to garnering support in the form of participation either in the way of membership, voluntary service or donations. There is no attempt to market a product or a specific service, so the question of conducting its mission in an ethical way does not arise. Ultimately, Amnesty attempt to draw attention to what it considers to be a violation of basic human rights. It does so by drawing the viewer in by focusing attention on a symbol of shared interest, one of the most essential elements of life; water. Once the viewer’s attention is secured, Amnesty’s waterboarding ad campaign engages concern for the male strapped to the table. The idea is to demonstrate the intense suffering that most of us are too far away from to feel any real sympathy for. By bringing the view into contact with the waterboarding episode, Amnesty is bringing the reality of inhuman interrogation techniques closer to the world and the aim is to spur active rather than passive interest. In other words, the campaign is instructive in much the same way as the Red Cross’s Together We Prepare campaign brand. By heightening public awareness, Amnesty hopes to engage sufficient concern to spur viewers into action. If viewers are moved by the ad, they will contact Amnesty and pledge their support either by way of donation or by participation as a member or by signing petitions or any other campaign organized by Amnesty. Essentially, the advertisement strategies do no more than create public awareness of certain human rights abuses and reaches out to the world for support in fighting for the protection of basic human rights. C. United Way Like Amnesty International and the Red Cross, United Way is an international non-profit organization. Like these two organizations, United Way also relies on volunteer and pro bono advertising. Specifically, the Ad Council prepares and solicits advertising donations for United Way (Live United: United Way). It therefore follows that the question of ethics in advertising for United Way arises in the manner in which those funds are solicited and used. Unlike Amnesty and the Red Cross, United Way does not focus on particular issues but focuses instead in a general way on the “advancing the common good” (Live United: United Way). The United Way motto speaks more clearly to the mission of the non-profit organization. Its motto states that: Underneath everything we are, underneath everything we do, we are all people. Connected, interdependent, united. And when we reach out a hand to one, we influence the condition of all. That’s what it means to live united (Live United: United Way). To this end, United Way maintains at its website, that advancing the common good is more about “changing systems” than “helping one person at a time” (Live United: United Way). United Way goes on to submit that everyone wins “when a child succeeds in school” or “when families are financially stable,” or “when people are healthy” (Live United: United Way). It therefore follows that United Way focuses on education with a view to lending aid to children and the young; income by promoting economic independence and stability and health with a view to improving the general health (Live United: United Way). Ultimately, United Way aims at creating long-term changes by honing in on the issues that create greater problems within any given society. Like the Red Cross, United Way takes the position that it takes everyone in any community to work together to bring about positive change. In this regard it asks for those things that non-profit organizations typically require to meet its end goals. They are “give, advocate, volunteer” and last but not least, “live united” (Live United: United Way). While this is much closer to the Red Cross’s approach to disaster relief in his campaign Together We Prepare, it is also characteristic Amnesty’s approach to heightening human rights abuse awareness and campaigning to solicit aid for stopping the abuses. An example of United Ways approach to advertising for support by promoting awareness and educating the public in a manner consistent with non-profit organizations’ ethics is an ad campaign published in Broward County, Florida. The ad consist of a published photograph of a small boy sitting outside upon gravel, looking innocent enough. The caption reads: “He’s got his father’s nose, his mother’s eyes, and his brother’s gun” (United Way Ad Campaign). An inset in the photo instructs on the negative aspects of broken homes and the manner in which it displaces children. The inset then goes on to state that “you can help” these displaced children by lending support to United Way who offers programs and services to help children and families cope with the problems of fractured familial relationships (United Way Ad Campaign). The ad goes on to state that 85 cents out of every dollar donated is for the direct benefit of “those in need” (United Way Ad Campaign). Moreover, the investment “creates a safer, better Broward for everyone” (United Way Ad Campaign). Like Amnesty and the Red Cross, United Way presents the charitable cause as a common concern. The approach taken to advertisement that resolving the problem addressed in the ad campaign is beneficial to all. Additionally, the ad campaign heightens awareness of the problem as was the approach taken by Amnesty. The Red Cross in its ad campaign Together We Prepare was responded to a well documented disaster and awareness was not an issue. The issue there was informing the public of how it might help, a common and quite acceptable goal of non-profit organization advertising campaigns. V. Conclusion Non-profit/charitable organizations are bound by ethical standards of conduct, particularly with regard to how it solicits and uses the funds received by virtue of donations. These ethical standards not only dictate the manner in which the organization acts in its day-to-day management and performance, but also in the way it runs advertising campaigning. In each case, the non-profit/charitable organization is required to be guided by its Article’s objects and procedural regulations. Invariably this means using funds for the charitable purposes it serves and not for remuneration of its various actors. To this end, advertising for funds, volunteer workers and membership is required to be consistent with the organization’s articles, its commitment to both beneficiaries and donors. As long as the advertisements are consistent with these factors, they are ethical. Ethical approaches in terms of heightening public awareness and engaging public concern, participation and interest in a frank and honest way has been adequately demonstrated by the ad campaigns run by the Red Cross, Amnesty International and United Way. Works Cited Advertising Education Foundation. 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