September 24, 2017

Helping PR pros make smarter decisions

Good PR a challenge for those making money while doing good

Good PR a challenge for those making money while doing good

If you work in PR long enough, there’s likely going to be a client or two that makes you silently wish for an easier path, like doing PR for an altruistic organization that “always” seems to be on the rosy, happy side of articles. Can you imagine getting largely positive press? It’s the PR equivalent of getting a job with a foundation that gives away money—who wouldn’t enjoy doing that? Everyone is happy to see you, and your day job is basically to fulfill dreams.

Not long ago, I listened to a piece on Radio Lab about the business behind blood banks, which made me think deeply about how altruistic organizations—particularly ones that need to function as businesses—have an extensively challenging PR task.

Background

The piece on Radio Lab delved into the business aspect of blood donation, and highlighted the Pulitzer-prize winning work of journalist Gilbert M. Gaul, who wrote a multi-part series examining the finances and the nationwide “brokering” process of selling blood collected from one region of the country to another. What some blood donors might find startling is that the blood they donate, for free, can command a high price. Gaul had started out wanting to write a short, feel-good story about blood donations, but the initially cautious, and then somewhat defensive responses he got during a phone interview on the topic compelled him to investigate further—which led to the five-part series he wrote in 1989.

Supply and demand, money and PR

There’s something that feels unseemly about this—making money off donations made by the general public with the best of intentions. On the other hand, there’s also the practical side to it—blood is a perishable product, and demand can outstrip supply from one area to another, so it just makes sense to get it to where it is most needed. Collection and transportation cost money, personnel and equipment cost money, and therefore covering expenses is necessary for blood banks to operate.

It’s the gut-level oddness of selling a product that people have donated that presents the PR question in this scenario. At first blush, the answer most would level here is “be transparent.” But there’s a chance that transparency could be counter-productive, potentially causing a decline in blood donations. Outside of regular donors, people generally donate when there’s a high-profile event, which can actually cause problems: for example, after 9/11, thousands of units of blood were collected but most had to be destroyed—the donation volume was overwhelming and couldn’t be tested before it expired. So, strategically timed local appeals make the most sense from a supply management perspective.

However, since blood banks can make money selling the blood to other areas in need, sometimes they hold blood drives even when they don’t need supply locally because they rely on the revenue generated. If you tell people they are donating blood to cover your operating costs, they might not line up out the door. The issue has only become more acute as overall demand has dropped, due in part to new surgical techniques that mean less blood loss during surgery (and therefore a lower need for transfusions).

What results is a strange combination of factors, which when taken in combination no matter how logical the explanation, just somehow feels wrong. Addressing these types of issues with standard PR practices can fall flat.

Charity as a business

It isn’t just blood banks that struggle with the clash of altruism versus business interests. Dan Pallotta gave a very compelling TED Talk back in 2013 arguing that charities and nonprofits shouldn’t be judged by how little they spend internally, they should be judged—and rewarded—for hitting big goals. Salaries should be high, not bare-bones. He says, “we have a visceral reaction to the idea that anyone would want to make very much money helping other people.” He then goes on to note that we don’t have a similar visceral reaction to the idea that someone would make millions of dollars developing and selling violent video games.

Pallotta goes on to make cogent, reasoned arguments for why this particular setup is bad for the nonprofit sector, how limiting overhead in charities limits their ability to grow and serve more people, and on and on. You can’t help but think that he’s making an important and salient point…but. But. It still feels strange to argue that money donated to a cause should be spent on advertising, or overhead, or salaries—even if that spending would result in more money overall for the charity. So again, we have the altruistic motivations running headlong into the business question, and the subsequently difficult PR challenge of trying to walk the tightrope of nuance that would be required to effectively explain high internal spending to donors—and the general public—without damaging the image and credibility of the charity.

Damage to the charity is exactly what happened to Pallotta. Despite turning $50,000 and $350,000 investments into $108 million and $194 million returns for two charities, his firm shut down “suddenly and traumatically.” Why? Because his sponsors bolted after an eruption of negative media stories criticizing the company’s 40 percent overhead.

Saving lives while making a profit

Yet another example of this challenge is in the pharmaceutical industry. This has been written about before on Media Bullseye, but it is worth repeating: the reputational challenges faced by pharmaceutical companies are substantial. While there are a variety of factors that lead in to this challenge, it can be effectively argued that a fair portion of the reputational challenge is the question of how much (or whether at all) a firm can profit off of a medication or treatment. A Harris poll released in January showed that only nine percent of American consumers surveyed believed that the pharmaceutical industry “puts patients over profits.” The survey also showed the lowest score across the board was a question about socially responsible behavior, wherein the pharmaceutical industry came last.

The healthcare industry across the board did not fare well in the poll on the question of putting “patients over profits”—health insurers came in at 16 percent on that question, hospitals at 23 percent, and even health care providers such as doctors and nurses barely came in above a third, at 36 percent.

There clearly is a massive trust issue between the general public and the system of health care delivery, and respondents to the survey also indicated that a demonstration of ethics is the highest valued priority for those in the industry looking to address the country’s healthcare challenges.

Communications requires a balancing act

As demonstrated above, conducting public relations for organizations that provide care functions and need to operate as businesses is challenging. It’s harder to sell “we’re doing good while making money” than “we’re doing good because it’s right.” Pallotta’s TED Talk took just under 20 minutes to explain all of the reasons why he believes that allowing charities to actually spend money on overhead is beneficial for the charity in the long run. The blood banks don’t want to divulge that they are making money—even though they need to in order to continue to operate. Pharmaceutical companies spend billions of dollars testing the safety and efficacy of medications before bringing them to market, but their motives are challenged.

In other words, the communications challenges for these companies are complicated and not easily delivered in 30-second clips. When there is such a highly reflexive “ick” factor connected to the idea that a company or organization that provides a societal benefit should be allowed to make money, it stands to reason that changing hearts and minds will take a great deal of effort.

The need for PR work in this area is clearly there. All of the industries and organizations outlined in this piece serve necessary societal functions. And, like any brand, reputation is important for their continued success and operation. It will take creative PR to overcome the messaging challenges endemic to this type of work.

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About The Author

Jennifer Zingsheim Phillips is the founder of 4L Strategies, and has worked in communications and public affairs for just over 20 years. Her background includes work in politics, government, lobbying, public affairs PR work, content creation, and digital and social communications and media analysis.

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