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Future Of Philanthropy

3 Lessons In Innovation Every Organization Can Learn From (RED)

On the 10th anniversary of the founding of the consumer-goods-for-AIDS-relief organization that's raised $350 million, a look back at what's worked.

When Red was founded by Bono and Bobby Shriver back in 2006, it was born out of necessity. The Global Fund—an organization dedicated to fighting diseases like AIDS, TB, and malaria in the developing world—had launched in 2002, with a commitment to garner private sector engagement and raise funds from governments in an effort to accelerate the end of AIDS. But the private sector was not biting, contributing only $5 million in the Global Fund’s first four years. This low level of funding was threatening to jeopardize ongoing commitment levels from the public sector. So as all good innovation goes, Bono and Shriver identified the issue and set out on a mission: how to unlock private sector interest in stopping AIDS in Africa.

The two men, along with other activists, had been advocating for many years for the establishment of a global war chest to end AIDS, TB, and malaria—all preventable and treatable diseases that were killing millions of people in developing countries. At that time, if you lived in London with HIV, you could get lifesaving medication while the same diagnosis in Lusaka, Africa meant a death sentence. It was clear to Shriver and Bono that a new model of fundraising was needed and that money would not be found in the charitable side of companies (at least not at the scale they were after). They needed to target corporate marketing teams and create buzz and excitement with a new innovative value proposition that would clearly define how brands could sell their products in meaningful and innovative ways. And thus Red was born.

Red partners with some of the world’s most iconic global companies to develop Red-branded products and services that, when purchased, a percentage of the profits to go directly to the Global Fund for the AIDS fight in Africa. To date, Red has over 70 partners globally, offering hundreds of products by companies including Apple, Gap, Beats by Dre, Le Creuset—and the list continues to grow.

As Bobby Shriver recounts in an interview, prior to the launch of Red, with its attention-grabbing Oprah "shopping spree" featuring Bono, most companies weren’t interested: "Companies didn’t believe pro-social actions would sell more stuff, because it wasn’t proven." In fact, only four companies signed on up front. The initial offering included a Red line of clothing from Gap and Emporio Armani, Converse shoes, and an American Express Red card. And what today seems so obvious—conscious consumerism—was not a common idea a decade ago. Pioneers like Ben & Jerry’s, Newman’s Own, and Body Shop were proven examples that commerce and cause could go hand in hand in mutually beneficial ways, but they were the exceptions.

According to Shriver, "Red and the initial four brands led an experiment that could have easily flopped. It was courageous for the brands to take such a huge risk. The public might not have liked the proposition of Red and the project could have been a colossal failure. However, the risk paid off and the proposition was extremely successful." In a year, Red generated $25 million for the Global Fund.

To date, Red has contributed more than $350 million, out of $33 billion in total funds (roughly 95% of funds raised come from government). And while the $350 million raised to date is impressive, the results are even better. In 2000, only 50,000 people in Sub-Saharan Africa had access to AIDS drugs. Today, that number is 12 million.

Red has led the way in demonstrating the power of brand and consumer purchase to drive social impact, well ahead of most social purpose organizations. It understood that a "cool" social impact brand could tap into the buying power of millions of consumers. And that doing so was more interesting, sharable, and scalable than asking consumers for a donation. As Shriver describes it, "Red gets the money and the heat that only a powerful brand and its partner brands can provide."

But what makes Red such an interesting model for other social purpose organizations to emulate is the constant creativity it brings to its partnerships. Deborah Dugan, CEO of Red, describes the organization as a branded "idea incubator" in support of the Global Fund. She runs the organization like a startup, encouraging the team to stay fresh by looking at what cutting edge and powerful brands are doing to engage consumers, and then thinking about potential applications in new and creative ways for their issue. "Everything we do comes from a place of creativity," says Dugan. "Issue fatigue often sets in, so to keep HIV/AIDS in Africa on the radar, it’s important to acknowledge that creativity is as much a passion and part of the organizations DNA as it is a necessity."

Red’s success comes from its continued disruptive approach to marketing. Recent campaigns include the Red Shopathon; Bank of America’s U2 Super Bowl free downloads, which triggered 3.1 million downloads and $3.1 million in 36 hours; the Eat Red Save Lives program with celebrity chefs; and turning the Apple App Store Red.

Given all of Red’s success, it is a bit puzzling that there aren’t many imitators in the social purpose space. There are lots of cause marketing programs; just about every brand has one, whether it is adding a dollar to point of sale or sponsoring activities and events. What I am talking about is structuring and adapting an organization’s work from the market in. To be constantly ideating on new and crazy ideas that could drive consumers to engage and, as a result, create social impact at scale. And to be encouraged to do so, even if the proof of the idea doesn’t yet exist.

So in recognition of Red’s success at its 10-year anniversary, here are three lessons all social purpose organizations and businesses should emulate to create larger scale impact for their issue.

1: It’s All About The Brand

Red instinctively understood the power of a big brand idea ("Red products can create an AIDS-free generation") and have cultivated this belief since its launch. They continue to invest in it through new and creative partnerships, like apps for Red, Bank of America free song downloads, and Supercell games, all triggering funds to the Global Fund. But for too many nonprofit organizations, brand is treated as an afterthought, or worse, something that doesn’t warrant a lot of investment. And for many, it is thought of as a set of guidelines for how to use one’s logo. This is missing the point.

Your brand is your promise. It is your guide for engagement. Charity: Water, a powerful, visible brand in the clean water space, understands this. So too does Toms, Warby Parker, and Etsy, on the for-profit side of social purpose. Organizations need to invest in their brand—early and throughout—with a bold, differentiated idea built on courage and conviction if they want to stand out and scale.

2: Scale With Big Ideas

When I asked Deborah Dugan what it would take to grow Red at 10 times its current size, she didn’t hesitate to say that it wasn’t about more people, offices, or capital. It was all about big ideas. Red ideates with its partners and then takes "big swings" to put them in the world. For example, with its Apps for Red in 2014, it could have followed the tried-and-true model by simply adding a dollar to every download of a Red app. But instead it worked for eight months with 25 different developers to find where Red could show up in interesting and provocative places in the apps to drive engagement and donations. They ended up with results like creating Red gems in the Clash of the Clans game and the ability to buy Red items as part of Kim Kardashian Hollywood. By end of 2014, the Apple activations had raised over $20 million.

Most nonprofits won’t have a partner like Apple to make such things happen, but the lesson is still the same. If there is the drive to develop big ideas, combined with the courage to deploy them in the world, the possibility for scale is much higher. But it requires the appetite, passion, and fortitude to be willing to test these ideas, take risks, and not default to simply what works. As Dugan says: "How many organizations have a 'war room' where they are building crazy, outlandish, and doable ideas to bring to their corporate partners?" This is what it takes to scale. But it also requires an understanding and humility that people and companies do not necessarily care about your issue. So the push to constantly take risks and innovate is critical, especially for organizations whose issue is no longer high up on the radar for consumers, governments, companies, and media.

3: Partnerships Are Built On Mutual Benefit And Reciprocity

What Red has done very effectively is enter into partnerships (not sponsorship deals) with companies, in which each party is bringing real, measurable value to the table. Converse, American Express, Belvedere, Apple, Bank of America, Coca-Cola, Birchbox, Fatboy, and all its other partners benefit as much as Red in order to generate lasting results. Unfortunately, too many charities and nonprofits cling to the old CSR model of sponsorship, where companies simply write checks to a cause. This is outdated thinking: It significantly under-leverages the reach and talent a corporate partner can bring to the equation if the alignment is strong. When there is alignment of values, outcomes, and impact, true reciprocal partnerships can be attained where everyone profits by doing good.

So what’s next for the brand that helped popularize conscious consumerism? According to Dugan it’s about "marketing as activism," moving beyond the transactional nature of cause marketing and focusing on unlocking a brand’s social purpose with money, engagement, skill set, and courageous leadership in order to build a tribe of advocates. As Dugan says: "I do believe the best is yet to come. We are onto something with the next generation of innovation and disruption in philanthropy because we think about it every day. It’s in our DNA." Beyond the number of lives saved, this might just be Red’s true legacy.

This post is part of a series in which Phillip Haid, the cofounder and CEO of PUBLIC, offers his thoughts on the best and worst of today's cause marketing

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[All Photos: via Red]

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