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When shopping and the AIDS fight are mixed

May 16, 2008 on 7:22 pm | In Money |

KIGALI, Rwanda: A year ago, the staff at the Treatment and Research AIDS center could barely cope. A river of patients flowed here from every corner of Rwanda, unable to find treatment closer to home. If a patient were fortunate enough to find a bed here, she often had to share it.

Today, a dozen patients, mostly women, sit in neat waiting rooms, laughing and talking, as children play around them. Doctors leisurely make their rounds, greeting one another as they go and taking the time to painstakingly explain the strict regimen HIV drugs require.

According to the managing director, Dr. Anita Asiimwe, the center can spend less time on crises and more time researching how to slow HIV transmission in this East African country, still rebuilding from the 1994 genocide that claimed more than 800,000 lives.

Asiimwe thanks an unlikely benefactor for all these improvements: the American shopper.

Just over a year ago, the rock star Bono started (Product) RED, a company that combined business and international aid. Since then, by buying RED iPods, RED T-shirts, RED sneakers, RED watches, RED cologne, and a host of products sold by companies including GAP, Apple, and Giorgio Armani, American consumers have helped contribute more than $14 million to fight HIV and AIDS in Africa.

According to Rwandan officials, that money has built 33 testing and treatment centers in Rwanda, supplied more than 6,000 pregnant women with medication to keep them from transmitting HIV to their babies, and financed HIV counseling and testing for thousands more women and children.

Yet, for all its accomplishments, critics say the project has fallen short. They decry a lack of transparency from participating companies over how much they make from RED products, and question whether more corporate money goes to Africa or to advertising.

“Look at all the promotions theyve put out,” said Inger Stole, assistant professor of communications at the University of Illinois. “The ads seem to be more about promoting the companies and how good they are than the issue of AIDS.”

In March 2007, Advertising Age magazine raised questions about the amount RED participants had spent on advertising, reporting that companies collectively had spent as much as $100 million in advertising and raised only $18 million. Officials from RED called the numbers inaccurate and said the companies had spent $50 million on advertising, and the amount raised at the time had been $25 million. Advertising Age stood by its report.

Susan Smith Ellis, chief executive of RED, said RED did not have an advertising budget.

Companies pay RED a licensing fee to market some of their products as RED. Then they send a percentage of those sales to the Global Fund, a public-private partnership set up five years ago to fight AIDS, malaria and tuberculosis in Africa. The organization sends the RED money to three countries - Rwanda, Ghana and Swaziland - to help women and children infected with HIV.

What the companies get in return is an opportunity to reach more socially conscious customers.

According to a 2006 poll by Cone, a marketing agency in Boston, 89 percent of Americans from 13 to 25 years old would switch from one brand to another of a comparable product and price if the latter brand was associated with a “good cause.”

Motorola, American Express (UK), Hallmark, and Converse are also among the companies that have signed licensing deals. RED says that more companies are coming but that they have to meet stringent guidelines: They must be an iconic international brand: make a five-year commitment to marketing RED; and open their workplace, human rights and environmental records to RED and the Global Fund.

The percentage of sales that goes to The Global Fund depends on the item and the company. For example, 1 percent of all spending from AmEx (RED) cards goes to the fund, as does 50 percent of net profit from the sale of Gap RED items, and $8.50 from each Motorola RED Motorazr. Neither RED nor the companies would disclose totals by company or product.

Over all, more than $53 million has been contributed by RED and its corporate partners to the Global Fund. RED-financed projects have helped put more than 30,000 people on anti-retroviral treatment and provided more than 300,000 HIV-positive pregnant women with counseling and treatment, according to data from RED and the Global Fund.

RED and its donors gave nearly all of the corporate contributions to the Global Funds $2.2 billion budget in 2007 - making it is the 13th largest donor, giving more than Russia so far, and more than China, Saudi Arabia and Switzerland have pledged. Excluding RED, from 2002 through last year, corporations gave a total of $3.9 million.