Seeing (RED)

Research | August 20, 2012

Everything that U2 frontman Bono touches seems to turn to gold. So when he launched his (RED) initiative to combat HIV/AIDS in Africa, the world took notice. The popularity of (RED) products are still strong, several years in; but how many consumers know what’s done with the proceeds, where they go, and how they actually combat HIV/AIDS? According to the website of (RED)’s independent beneficiary charity, the Global Fund, “(RED) is not a charity or campaign, it is an economic initiative that aims to deliver a sustainable flow of private sector money to the Global Fund.” And this is how it’s put into practice: Companies that want to brand their product as “(RED)” pay a licensing fee, then a percentage of the profits from the sale of the designated item is donated to the Global Fund. Many of (RED)’s partnerspublicize the percentage of the net profits from each item that they contribute to the Global Fund, but the amount given to the Global Fund varies wildly depending on the product.

  • For every red Apple iPad smart case sold at $69, they say the benefit is providing “over 1 week of lifesaving medication to someone living with HIV in Africa.
  • When buying this onesie, 100% of profits go to the Global Fund to “help deliver an AIDS Free Generation by 2015.”
  • The same goes for Gap’s Inspi(RED) t-shirt. (Yet there’s no context as to what “helping deliver an AIDS free generation” means.)
  • Dr. Dre sells his red earphones for $199.95, and he contributes a whopping $5 to the Global Fund.
  • It’s similar for this $58 clock, where Nanda Home contributes 5% of its profits. (i.e. they keep the other 95%.)

Companies market the product as a charitable initiative and say how much they’ll pass on to the Global Fund, but no one’s really saying how much they end up giving in the end. As this New York Times article points out, no information is available as to how many of the (RED) products have been sold or how much money has been contributed by the individual partners. So really, without knowing the amount of profit that any of these products make, it’s impossible to know what 5% or even 100% of the profits look like. (RED)’s website says that $190 million has been contributed to the Global Fund, and it claims to have “reached” 14 million people. They’re impressive numbers and certainly better than every cent going into the hands of shareholders who already have plenty. But without details about what each product contributes, there’s no real transparency to the economic initiative as a whole – something consumers are starting to demand more and more of. And rightly so.

– SM

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