Imagine a campaign that focused on how much profits the average person generates from their average consumer behavior- maybe $12,000. And we show how if someone was able to get $4,000 of that to some charities, they could save a child’s life. “Don’t you want to buy in a way that lets you save people’s lives rather than make rich people richer?”
One thing is that consumers may not be aware of the intentions of an EA profit-beneficiary or they may not be able to trust them to act consistently to it.
Another thing is that consumers may feel more of a direct impact from a purchase where the profits go directly to a charity they value instead of by buying from a company and hoping that the profit-recipients will act beneficently. You as a consumer get to take credit for the moral act in a way that you don’t… It is more like the profit-recipient philanthropist gets all the moral credit.
“At the end of the day you are overestimating how much difference it would make to consumers who are not aware of the distinction without an expensive advertising campaign”
This is why, as mentioned above, one of the functions of the Consumer Power Initiative will be broad-based marketing, such that a mass social movement regarding charities as our economies’ beneficiaries will take off.
This sounds ambitious and it is, but a few crucial factors make such marketing feasible and likely to succeed:
Very simple ask of consumers: buy what you were going to anyway, but through GC.
Scaling of marketing efforts: advertising for broad-based GC affects a much broader set of markets . For instance when Anheuser Busch buys a Superbowl commercial for over $6.5 million, this is in service of a company with annual net profits of $4.67 billion. On the other hand, the same budget for a Superbowl commercial could cover a huge set of companies that have collective annual net profits orders of magnitude higher than one global alcohol company. Furthermore, the commercial would have a simple and clear value proposition for consumers: buy through GCs and benefit worthy charities rather than rich shareholders.
Earned media. Most of the world including the public, celebrities, thought leaders, etc. want a world that is more just and sympathize with a lot of the same charities goals that EA does. A lot of the work will be done by people wanting to ride the wave and see how they can help.
Philanthropic Investors looking to create Guiding Companies will have to pay a significant premium
In the proper contexts, once GC is established, the opposite might hold in circumstances where there are multiple incumbents in a low-differentiation market space. The philanthropic investors could threaten to significantly diminish the value of competitors by purchasing one, thus starting a reverse bidding war. For a (admittedly rosy) picture of how this might play out see this response under the heading “So, for a simple example to illustrate what I would be thinking of doing- ”
Bad behavior (or behavior irrationally perceived to be bad) from Guiding Companies:
This is why one of the functions of the Consumer Power Initiative will be to do broad-based marketing for Guided Consumption, so that consumers can be aware of their power to do good.
Imagine a campaign that focused on how much profits the average person generates from their average consumer behavior- maybe $12,000. And we show how if someone was able to get $4,000 of that to some charities, they could save a child’s life. “Don’t you want to buy in a way that lets you save people’s lives rather than make rich people richer?”
As for consumer response to different activities by companies, the beauty is that charitable investors and other actors will be able to direct their activity in the ways that make sense in response to research and thought This is why one of the functions of the Consume Power Initiative is research.
The (lack of) Bill Gates or George Soros factor:
One thing is that consumers may not be aware of the intentions of an EA profit-beneficiary or they may not be able to trust them to act consistently to it.
Another thing is that consumers may feel more of a direct impact from a purchase where the profits go directly to a charity they value instead of by buying from a company and hoping that the profit-recipients will act beneficently. You as a consumer get to take credit for the moral act in a way that you don’t… It is more like the profit-recipient philanthropist gets all the moral credit.
“At the end of the day you are overestimating how much difference it would make to consumers who are not aware of the distinction without an expensive advertising campaign”
This is why, as mentioned above, one of the functions of the Consumer Power Initiative will be broad-based marketing, such that a mass social movement regarding charities as our economies’ beneficiaries will take off.
This sounds ambitious and it is, but a few crucial factors make such marketing feasible and likely to succeed:
Very simple ask of consumers: buy what you were going to anyway, but through GC.
Scaling of marketing efforts: advertising for broad-based GC affects a much broader set of markets . For instance when Anheuser Busch buys a Superbowl commercial for over $6.5 million, this is in service of a company with annual net profits of $4.67 billion. On the other hand, the same budget for a Superbowl commercial could cover a huge set of companies that have collective annual net profits orders of magnitude higher than one global alcohol company. Furthermore, the commercial would have a simple and clear value proposition for consumers: buy through GCs and benefit worthy charities rather than rich shareholders.
Earned media. Most of the world including the public, celebrities, thought leaders, etc. want a world that is more just and sympathize with a lot of the same charities goals that EA does. A lot of the work will be done by people wanting to ride the wave and see how they can help.
Philanthropic Investors looking to create Guiding Companies will have to pay a significant premium
In the proper contexts, once GC is established, the opposite might hold in circumstances where there are multiple incumbents in a low-differentiation market space. The philanthropic investors could threaten to significantly diminish the value of competitors by purchasing one, thus starting a reverse bidding war. For a (admittedly rosy) picture of how this might play out see this response under the heading “So, for a simple example to illustrate what I would be thinking of doing- ”