When Values Collide, Consumers Speak with Their Wallets

A high-level executive of a fast food company openly discusses his disapproval of gay marriage in two interviews. The comments spark protests at the company's stores and weeks of negative reaction on cable news shows and in the blogosphere.

A mid-level manager of a well-known charity makes comments in an Australian newspaper about his organization's interpretation of Biblical views on homosexuality. A politically liberal blog urges a boycott of the charity's holiday giving campaign on the grounds that the group discriminates against gays and lesbians.

In both cases -- the first involving Chick-fil-A, the second the Salvation Army -- the actions of an individual voicing their own opinions, not the views of the company, led to consumer retribution and the potential loss of income to the organization, either through a short-term drop in customers or the loss of long-term donors. In neither case were the comments directly associated with the company's core mission, but such distinctions are becoming meaningless when amplified by social media, experts say.

The rubric used by the public when judging these incidents, they add, isn't the same for nonprofit organizations as it is when it comes to for-profit companies. Charities are held to a higher standard regarding the words and actions of staff members, even if those words and actions aren't directly related to its mission. The off-the-cuff remarks of an employee half a world away can have long-lasting reverberations on the success of a charity -- and those kinds of public opinion quakes are hard to shake off.

"People like feeling confident that their giving is making the kind of difference they want to make," says Katherina Rosqueta, executive director of the Center for High Impact Philanthropyat the University of Pennsylvania. "Philanthropy is an expression of deeply held values consistent with what a donor believes. Any time they learn an organization they supported is not being consistent -- either with the reason they supported them in the first place or their own beliefs -- that can cause the organization to potentially lose the donor's support."

Sparking a Powder Keg

The two incidents referenced above are, by now, familiar to many.

In June and July, Chick-fil-A COO Dan Cathy gave separate interviews to Christian media outlets in which he affirmed his opposition to gay marriage. In one interview, held on The Ken Coleman Show, he said: "As it relates to society in general, I think we are inviting God's judgment on our nation when we shake our fist at him and say, 'We know better than you as to what constitutes a marriage.' I pray God's mercy on our generation that has such a prideful, arrogant attitude to think that we would have the audacity to try to redefine what marriage is all about."

His stance wasn't necessarily a surprise: Chick-fil-A is one of the few businesses that is closed on Sundays and major holidays, and its founder and CEO, S. Truett Cathy, is a devout Southern Baptist. Dan Cathy's comments nonetheless sparked outrage across social media and led to boycotts of the chain's 1,600 stores. Although the chain tried to distance itself from the issue, Cathy's words became the de facto stance of the restaurant chain.

Likewise, an Australian media relations official with the Salvation Army gave an interview with two gay journalists in that country in which the group's views on homosexuality came up. In response to a question on whether or not the Bible states that gays should be put to death, Major Andrew Craibe said the group's view that homosexuals should be put to death was "our belief" and that the Salvation Army has "an alignment to the Scriptures."

The international organization quickly moved to assure the public that Craibe's comments were "extremely regrettable" and that Salvation Army members did "not believe, and would never endorse, a view that homosexual activity should result in any form of physical punishment." But that wasn't enough to keep the liberal-leaning America Blog from urging its followers to drop protest cards, not change, in the Salvation Army's red kettles this year.

A Personal Investment

In both cases, one official's statements conflicted with the personal beliefs of a segment of its audience who were, in turn, applying their values to the organization in question. It's not an uncommon phenomenon for both for-profit companies and charities, notes Wharton marketing professor Americus Reed.

"Consumers are drawing on their belief about what ... this company is about. For a nonprofit, that's all kinds of highly moralized things," Reed says. "For a for-profit company, that's not necessarily so unless the company is positioned that way. Ben and Jerry's brand equity, for example, is associated with the environment and a higher order of socially impactful, socially collective sorts of ideas."

Although neither Cathy nor Craibe expressed an opinion that was entirely out of step with their respective organization's world view, consumers tend to take such statements more personally when they come from a nonprofit, Reed adds. Even if the personal views of a charity executive are not in conflict with the nonprofit's mission -- imagine the head of an environmental conservation group being pro-life, for example -- speculation about the politics of a group can lead donors to make assumptions about its views across the board.

"When you connect your identity to an organization that's a not-for-profit, you're not decoupling things in your mind. You're connecting in a way that's certainly explicit in the group's outwardly defined values, and you're assuming implicitly that those values are in total alignment with yours," he says. "For most of us, we don't connect with Chick-fil-A based on values. We connect with them based on that fact that we like their sandwiches."

Transportable Value

The differences stem from what a consumer believes he or she should receive in exchange for supporting a particular organization, the professors note. For a for-profit company, usually that's a tactile item: a chicken sandwich, a cell phone, a pair of pants. For a charity, it's something more personal. "If we look back at the history of philanthropy and why donors give, it's just about trying to get the most social bang for your buck," Rosqueta points out. "It's about what the donor believes a better world should look like."

Rosqueta cited the fissure that developed between the Susan G. Komen for the Cure organization and many of its longtime supporters when Komen, a breast-cancer research and support organization, stopped funding clinical breast exams and mammograms at Planned Parenthood, a women's health organization that also performs abortions. Komen officials cited an internal policy against funding groups that are under investigation -- Planned Parenthood was the subject of a Congressional inquiry at the time -- when it halted its annual funding of around $600,000.

Although the decision was reversed just four days later, the backlash was swift and furious, with many of Komen's supporters assuming the funding was cut in response to political pressure. In this case, Rosqueta says, donors who supported Komen likely supported the overall mission of improving women's health, and they saw the funding decision as anathema to their goals.

"They had supporters who cared very much about the goals of the nonprofit, but who were turned off by what they viewed as a political move on the part of the organization. For donors, just like any individual, [an incident like that] is a pause to reconsider support of an organization when it becomes associated with a set of values and statements that you personally find inconsistent with your own values and statements."

That personal connection makes it, in some cases, even easier to pick up one's figurative toys and play in another sandbox. Wharton marketing professor Deborah Small notes that donors often can feel the same sense of accomplishment by simply switching their charitable aims. "Lots of organizations are asking for money all the time. Unlike Chick-fil-A, I don't get any different consumption value if I give to the local food bank [versus to the Salvation Army]," she says.

The same isn't necessarily true in the private sector, adds Reed, where consumers can find it easier to explain away their internal inconsistencies. "Few consumers are willing to express negative reactions," he says. "When it comes to the inconsistency, they'll say they don't agree with a company, but they're not willing to pay more for an alternative.

"Consumers are really good rationalizers. You'll make up all kinds of different ways to get around it."

'Stay Out of That Stuff'

For Komen, the repercussions of its funding decision were quickly visible: Participation in the charity's multi-day fundraising run/walk event, the Komen Global Race for the Cure, was markedly down in several cities, including Washington, D.C.

For the Salvation Army and Chick-fil-A, however, the link between their separate controversies and profits is less clear. The Salvation Army's red kettle campaign is currently under way. The international organization hasn't released a status update on its progress, but local news reports indicate donations are behind pace in several areas, although it is impossible to determine how much of an effect, if any, the boycott is having.

Chick-fil-A got more of a positive bounce from its controversy, thanks in large part to a counter-protest spurred by conservative political leaders. On the so-called "Chick-fil-A Appreciation Day" held in August, supporters flocked to the business and gave some locations record-breaking sales.

As a corporate strategy, however, Reed says it is too dicey for businesses and nonprofits alike to risk decades of corporate identity on one off-the-cuff comment. "If I were counseling folks on things like this, I'd say stay out of that stuff," he notes. "At the end of the day, there is too much potential downside to put your company, your brand, your equity at risk based on private beliefs. You can believe whatever you believe. No one wants to take those rights away from you. But you need not come out and make those kinds of statements."

Knowledge@Wharton