Product Red, Dell and Microsoft: Why It Makes Sense to Me

Rob Enderle

Let's start by saying that while I appreciate the philanthropy of others, I'm not particularly philanthropic myself anymore.


I, probably like many of you, over the years have watched the folks in charities to which I was contributing get caught lining their own pockets. The only one that I now actively contribute to is the Red Cross.


So when I initially heard about this Product Red thing, Dell and Microsoft's program to donate to AIDS relief for every PC or laptop sold, I was rather skeptical. Yet I believe it generates money that would otherwise not go to the treatment of people in desperate need, and it does so by appealing to both the economic and philanthropic sides of large companies as well as the buying habits of consumers.


It also effectively makes companies and individuals more aware of the related problem so they are more likely to shift their own philanthropic activities in this direction. It is clearly successful in the first objective. It has to at least partially be successful in the second, given the media coverage the program gets. So why does Project Red get so much negative coverage?


Why Some People Don't Like Project Red


Much of my university work was targeted at studying behavior. The pertinent thing to this discussion is that most people don't like things that are different. They tend to be naturally suspicious of them in a world where we often are tricked, and find out later we were tricked. In the U.S., this is particularly true this year as the various political campaigns seem to be competing with each other with regard to how much they conceal the truth. (It is nice to know that one state is moving to address part of this.)


For the majority, it seems a charity should be an organization that takes donated assets (money/property) and gives the majority of what it takes in to the targeted cause. Too often we discover that while the "take in" part is working like a champ, the "give" part tends to work poorly, with most of the donation going to either run the organization or to line the pockets of the executives running it.


The problem with traditional charities is they are dependent upon people giving with the only real benefits being a good feeling or the credit people get from giving. In hard times, both of these things can be secondary to other things donors might rather do with the money. This, coupled with what often seem to be some rather horrid business practices, is why traditional charities seem to move from financial crisis to financial crisis. (By the way, I ran into a good resource on how to donate smart while researching this piece.)


Why I Like Product Red


Product Red is different in that its goal is to take money that would be spent on marketing and divert some of it to a good cause while maintaining or increasing the effectiveness of the marketing spend. It doesn't pull from a bucket of funds that was ever intended to be philanthropic, so it doesn't create concerns that arise when the funding source appears contaminated.


The program is designed to be sustaining, where the money to run the program is distinctly different than the money allocated to do the charitable work. It appears to be designed to avoid the recurring financial crisis cycle that many other charitable organizations suffer through. In reality, Project Red is based more on the tested licensing model than anything else.


The simple message that this gets money to folks that desperately need it from a unique source works for me. But then, I'm a big fan of creatively solving problems and not hung up on having to do things "traditionally." Given my experience with many traditional charities, creativity appears to be a good thing.


Disclosure and Why Business Fundamentals Are Important


By way of disclosure, I work with both Microsoft and Dell. While it's been a while since I've seen Bill Gates (who once promised to give me a tour of his home, which I would still like to do before I die), it is clear he is putting his money where his mouth is in terms of his focus. I get to see Michael Dell regularly and have found him to be a stand-up guy. Both have proven to be good businessmen, and Project Red uniquely has a strong business core.


I often think that one of the primary problems with charities that want top executives to donate to them is this lack of core business values. Folks that work hard for their money don't want to see it wasted. That's why I applaud Google's efforts to break this trend and create one of the first profitable philanthropic organizations. I, too, have difficulty giving money to folks who don't seem to know how to manage it. The fact that Project Red at least seems to understand the fundamentals helps a great deal with this CEO audience, and with me.


Wrapping Up and Keeping It Simple


So the simple message to business is to participate in Project Red, sell more products AND help those that need it. And to consumers, buy a Project Red product, get something cool and unique AND help those that need it. Even if all you care about is the first part or the second part, the result is that many folks that need help get it. To me, that's really all that is important.

Add Comment      Leave a comment on this blog post
Feb 1, 2008 1:54 AM Ken Holmes Ken Holmes  says:
P. S. If Bill Gates opens this program up so it is not tied exclusively to Windows and Microsof (I won't hold my breath), I will be happy to look closely and hopefully applaud enthusiastically. It is not that the program is different that I object to. It is the obvious Windows/Microsoft hook that I object to. Aside from this, I think the base idea is very good (perhaps one of the best ideas to be implemented in a very long time).You wrote that, "...and nothing gets better if we discourage people with resources from trying." I expect Mr. Negroponte (among others) agrees with this. Reply
Feb 1, 2008 3:54 AM Rob Enderle Rob Enderle  says:
You might be right if this was Bills idea but or if Microsoft was first. But Apple, the Gap, Motorola, Armani, and Converse came first and it was Dell that got Microsoft involved as initially it was only going to be Dell supporting this. Product Red isn't a new program. Granted Bill was an early supporter of the concept but it was Bono and Bobby Shriver that created this program several years ago so I think you are way off track in this instance. Reply
Feb 1, 2008 8:16 AM Ken Holmes Ken Holmes  says:
I simply must do better research before I write to you. Touche, Rob. Reply
Feb 1, 2008 12:45 PM Ken Holmes Ken Holmes  says:
Rob, Bill Gates proves once more that he is the paragon of marketing genius. In fact he may have delivered the coup de gras to Linux and other efforts. Gates is supposedly stepping away from Microsoft to work on his philanthropic enterprises. And this latest is amazing. He can do some good, help some people and kill off his competitors products in one fell swoop. Who, after all, can criticize such a humanitarian effort. No one can. Of course, Pablo Escobar was considered a saint in his home community in Columbia. Bill Gates giveth and Bill Gates taketh away. As long as the people tow the line and use Windows and Microsoft applications all will be well. Microsoft will do well and Bill Gates will do well. People who need help will hopefully get help. This is a good thing. Aside from this, the move by Gates is a provides him with a serious competitive edge and sainthood. There will be a huge price to pay in the long run, but in the short run everyone, "Praise Gates and install more Windows". I will praise the good that is done and recognize that this is business not philanthropy. Reply

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