Charitable Donations in the Age of Brand Transparency

In our new report, The ROI of Transparency: A Consumer Market Research Study, there was one question we asked 1,000 American consumers that ultimately didn’t make it into the final report, but was too interesting for us to leave on the cutting room floor:

When a brand gives to charity, what is the most transparent way to communicate its giving?

Brands are investing in social responsibility, and more than half of the 1,067 quantitative interviewees identified transparency of corporate social responsibility as an important aspect of brands they like. And in the marketplace, we see companies signal their social responsibility through charity partnerships and donation campaigns. So how should they communicate their charitable efforts in order to engender trust, increase the perception of transparency, and ultimately influence purchase intent? Presenting the information in its raw form might create more unintended questions. Positioning it too carefully might be seen as manipulative spin.

We offered our respondents a very specific scenario, one that many companies often debate.

Imagine the following situation:

Two different companies choose to donate money to charities, but they promote their charitable giving differently:

  • Company A says it gives 5% of its profits to charity.
  • Company B specifically states how much it donates, e.g., $50,000.

While both options show a company that is willing to give its profits to charity, we wondered if the presentation affected consumer perception.

Next, we asked respondents to indicate their agreement or disagreement with each of the following statements:

  • Company A is more transparent than Company B
  • Company A is more trustworthy than Company B
  • I would prefer to buy products from Company A over Company B

Higher levels of agreement would favor Company A and higher levels of disagreement would favor Company B.

Here are the results:

There isn’t a definitive “winner” – in each of the three statements, the largest percentage of consumers were unsure about whether Company A’s approach is better than Company B’s.

Perceptions of Transparency

However, when viewed through the lens of transparency, there is indeed a clear winner. Company B, who communicated a fixed dollar amount that was donated, comes out on top. More respondents (41%) thought stating the specific dollars was more transparent than simply providing a percentage (27%).

Generationally, it’s older generations that favor Company B. Millennials are evenly split between favoring Company A (37%) and Company B (36%).

Perceptions of Trustworthiness

When we asked which is the most trustworthy, 43% of consumers neither agree nor disagree — if there’s a slight advantage, it goes to Company B, with 32% favoring Company B and 25% favoring Company A.

Generationally, Millennials differ the most by feeling that Company A is more trustworthy (38%) than Company B (28%).

Impact on Purchase Intent

For purchase intent, it is a dead heat. 28% of consumers would choose to purchase from Company A, while 29% would choose Company B, and 43% choosing neither.

The numbers for trust mimic those for purchase intent when we look across generations. Millennials are more likely to want to purchase from Company A (37% and 37%) than Company B (27% and 29%).

This all indicates that when transparency is the goal, companies would be better supported by providing specificity of dollar amounts over percentage of profits. However, when trust and purchase intent are the goals, how one communicates the specificity of charitable giving is not a factor.

Find out more about The ROI of Transparency: A Consumer Market Research Study and purchase the report here.