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Do We Really Want to Legislate Consumer Philanthropy?

December 29, 2007

(Michael Seltzer is a noted authority on the nonprofit sector and philanthropy worldwide.)

An editorial in last Saturday's New York Times ("Buy this Sweater, Save A Seal," 12/22/07) endorsed a bill put forward by Sen. Bob Menendez (D-NJ) that would require better notification of charities and their consent in any marketing effort that uses their name. The bill also would require consumers to be told how much of an item's price actually goes to charity. The editorial called the measure a "sensible stab at accountability." So why is it wrong-headed?

The editorial, and the article that appeared on the front page of the Times a few days earlier (see my previous post), both mention the now-infamous Barneys 2007 holiday catalog as the pretext for the legislation. This year, Barneys for the first time (to the best of my knowledge) chose to match many products in its catalog with a nonprofit organization, noting that it would make a contribution to the nonprofit in question if a shopper bought the item. Among the nonprofit organizations included were the Natural Resources Defense Council, Environmental Defense, the Trust for Public Land, the Climate Project, and 1% For the Planet.

For every retailer like Barneys that has jumped on the cause-related bandwagon, there are scores of other businesses that have been providing these same opportunities to customers for years. And while it's true Barneys usually doesn't indicate the percentage of the purchase price earmarked for charity, do we really need to create legislation to curb the practices of a few retailers -- and create a whole new layer of red tape for the majority of businesses that practice responsible consumer philanthropy?

The Times editorial closes by asserting that "the old-fashioned, direct, tried and true route seems best" for now. But where is the evidence that consumer philanthropy has caused a decline in direct contributions to charitable organizations? Or that any nonprofit was harmed by the Barneys campaign? The way I see it, consumer philanthropy provides generous individuals with more opportunities to act on their charitable impulses, helps good companies burnish their reputations, and has created an important new revenue stream for many worthy nonprofits. Why would we want to discourage it?

-- Michael Seltzer

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Posted by Peter  |   December 29, 2007 at 02:39 PM

just another attempt to crush the influence and growth and eventually, existence, of non-profits.

legislation is almost never done with good intentions. i suspect if we dig through the sponsor's closets we'll find who put him up to it.

Posted by Mitch Nauffts  |   December 29, 2007 at 05:33 PM

Hi Peter --

Thanks for the comment. I haven't studied the bill proposed by Sen. Menendez, but I suspect it puts the reporting and accountability burden on the for-profit retailers and cause marketers, not nonprofits. That said, I agree we need to proceed cautiously when proposing new regulations for the sector; a lot of the laws and regulations on the books are enforced weakly, if at all, and adding more would merely stress an already-overburdened regulatory system. I think it's worth noting that the main job of our elected representatives in Congress is to craft and pass legislation, and that a lot of that legislation is motivated by good intentions.

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