Pepsi Refresh: a Bad Deal for Non-Profits?

Have you seen the Pepsi Refresh Everything campaign advertised on your local television or radio?  Every month in 2011, Pepsi will give $1,300,000 to what it calls “charitable causes” in the USA.  In addition to the cash given away, they are an undisclosed amount of additional funds on radio, internet & television ads to promote how they “Do Good” (add the Pespi logo in each of those 3 Os).  There’s also the financial cost of creating and maintaining the logos, website, and paying the Category Ambassadors who review and comment on applications.  I could easily believe Pepsi is spending as much or more than $1.3 million per month in the payroll and advertising for this campaign nationwide.

How does it work?  Each month, Pepsi Refresh will accept up to 1000 applicants.  Every single month.  These applications are supposed to be for charitable causes, with guidelines and limitations listed in their Official Application Guidelines, but can be given to individuals, for profit, or non-profit organizations.  Individuals and for-profit orgs must accept their own tax liability.

There are several things I think an organization should consider before considering applying to Pepsi Refresh:

  • Do we have daily, virtual contact with thousands of supporters proficient in social media?
  • Are we proposing a project that has other means of support if the campaign fails?
  • Will our staff or supporters be exhausted or defeated if we are not funded?
  • Do we have other avenues to “leverage” this attention? (Connect to local ad campaigns, etc)
  • Does advertising Pepsi, Pepsi Max, and Diet Pepsi in any way violate our mission?

So let’s say you answer yes to these questions and decide to apply. Now what?  You must get your stakeholders to vote.  Every day.  For an entire month.  In order to vote, a person has to register on the Pepsi Refresh website and log in each time.  After log in, the person hears the sound of a Pepsi can opening, and the Pepsi logo is inserted into most available Os on the website.  All the advertising explicitly links the campaign to the big 3 Pepsi products: Pepsi, Pepsi Max, and Diet Pepsi.  To sustain daily engagement through voting expends daily staff or committed volunteer time.  I imagine a successful campaign requires thousands of daily voters, but I’ve never been involved in one to date.

In truth, I think that Pepsi Refresh is extremely innovative. Hearing a soda can pop open every day for a month is nothing short of genious marketing. From Pepsi’s perspective, they are getting huge amounts of engagement for very little cost. Over 3 million people on Facebook “Like” Pepsi Refresh. They will certainly spend billions of dollars on advertising anyway, so why not also give a little to folks who “do good’? But the benefit is certainly maximized for the Sponsors, not the applicants in this project. Here’s why:

Hundreds of Losers, Few Winners

All through 2010, I was contacted at least once every month or two to vote for a non-profit organization I care about (and a couple I don’t!).   Most of them have a local or regional focus serving the poorest or most underserved populations.  In every case, they’ve been lucky to get into the top 100, and only get into 70-80th places if they emailed or otherwise advertised to hundreds of constituents every day during the month.  Each of these cash-strapped organizations exhausted their social capital with hundreds of supporters for a very defeating loss (ending in 78th place?!) to advertise Pepsi, Pepsi Max & Diet Pepsi. 

Were they compensated for this free advertising of Pepsi?  No. 

Did it increase the organization’s visibility for new supporters, morale among staff, or promote other types of engagement with the organization?  None was reported.

In one instance, the organizer even sent an email reflection at the end stating that people became less engaged over the month and that overall the campaign was not worth it.

Obviously, in retrospect I don’t think that entering this campaign was a profitable expenditure of time or energy for the small, locally-based social service non-profits I’ve seen enter the competition.  In fact, I think it damages their standing by exhausting stakeholders who would rather be engaged in something that has some visible benefit.  If a non-profit can demonstrate that something positive came out of the campaign regardless of the receipt of funding and will not exhaust supporters in the process, then I think it might be worth the application.  Otherwise it’s just a very visible loss to support Pepsi.

Pepsi Could Easily Do More to Maximize Outcomes

But IF you are voted in the top 2-10 ideas and receive $5000-$250,000, THEN what happens?  Your idea is promoted on the Pepsi Refresh website, you obviously receive the funds, and the Official Application Guidelines merely state that the applicant has to create their own benchmarks for measuring success, so Pepsi doesn’t have to even create its own accountability measures or do any third party evaluations except asking for one reference in the application process.  Also, non-profits are competing not only against other 501(c)3 organizations, but also individuals and organizations who could also be using the funds for for-profit purposes, albeit with the social good in mind.

There are many things Pepsi could do that would increase the benefit of these campaigns for the great number of local or regional, poverty-focused non-profit organizations who are participating with nothing to show for it:

  • Give $2,600 each month to 500 non-profits across the country instead of larger amounts to 32.
  • Agree to advertise all recipients in their local markets.
  • Spend a little of the cash to fund their evaluation through Charity Navigator and link to their profile on that website where others can give.
  • Create more consistent guidelines for follow up & evaluation.
  • Advertise the organization’s listing on VolunteerMatch, Serve.gov, or another volunteer promotion partner Pepsi would financially support.
  • Provide mentoring, coaching or other guidance on how to maximize engagement via social media (that would translate to campaigns beyond this one).

I am certainly not saying that I think Pepsi Refresh should only support non-profit organizations, but there are other things it could do to truly maximize its stated impact areas, especially in health.  To support for-profit applicants, Pepsi could fund evaluation of their project or organization to be more visible to venture capital or other investors.  And most importantly, they could use the space to advertise their health-conscious products instead of the ones proven to increase dental decay, ulcers, and obesity.


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