Does $5 Buy You Any Goodwill?

You’re a company with $2.3 billion in annual revenues and one of the most storied brand names in history. But your business model is antiquated and you lost more than $100 million last year. What should you do to celebrate the holiday season?

If you’re Reader’s Digest Association, you send a $5 bill to all 3,000 of your employees and suggest that they do some charitable giving.

This strikes me as an empty gesture — what can an employee do with $5 to make a difference in the world? Drop it in a homeless person’s hat or a Salvation Army kettle? Is this making any difference? And how much staff time and mailing costs did RDA use to distribute these $5 bills — resources that could have gone directly to a more worthy cause? And the total cash outlay for this nearly empty gesture: a paltry $15,000.

I’m sorry to be Grinch-y here, but a $2.3 billion company needs to make a much bigger statement than this at the holiday season (if it is going to make one at all). I’m not in favor of companies using yearend charitable giving to burnish their brands, but if you are going to do something unusual like this, you ought to do something more significant.

On the other side of the ledger, consider the “Pay it Forward Challenge” program of State Bank and Trust in Fargo, ND. They gave each full-time employee $1,000, and each part-timer $500, to giving to a charitable cause. Total cash outlay: $502,000. That’s the kind of gesture I’m talking about.