Pepsi is taking a bold move. It's not spending money on Super Bowl ads for Pepsi beverages. Instead, Pepsi is using the money for lethal generosity through its Pepsi Refresh Project, a crowdsourced cause marketing effort to give away $20 million in grants to help revamp communities.
Rather than donating the money to nonprofits through a traditional corporate responsibility grant program, Pepsi will jump on the online contest bandwagon. Pepsi will invite "applicants" to submit big ideas to change the world and then ask a crowd of Pepsi Fans to vote on them. Pepsi will have contests every month for 10 months beginning Jan. 13.
According to a post in GigaOm, The Pepsi Refresh Project will award $5,000, $25,000, $50,000 and $250,000 to individuals and organizations that turn good ideas into projects that make a difference. The grant categories will be:
- Arts & Culture
- Food & Shelter
- The Planet
Right now you can give your email to Pepsi to be alerted about details. I was relieved to see that they at least, presumably, respect our privacy and had this disclaimer:
Notice: Pepsi will send a one-time reminder about the Pepsi "Refresh Project" to the email address you provide. It will not be collected or used by Pepsi-Cola Company for any marketing purposes.
Let's hope they learn from the recent Chase Bank's Online Contest Fail, other studies on these crowdsourcing contests, and countless examples of crowding sourcing for social change. I hope they avoid going to the dark side and waste money on projects and processes that don't have impact as well as many nonprofits' most valuable resource: their time.
The Chase Community Giving contest on Facebook is one of the biggest online contests before Pepsi announced their contest, open to more than 500,000 charities. As of this writing, 1,027,398 people joined Chase’s fan page to cast votes for their favorite charities. The top 100 "eligible" vote getters, announced a few days ago, received $25,000. They are going to participate in the next round, "The Big Idea" where the 100 charities share their big idea for changing the world and get votes. The winner gets $1 million and five finalists will receive $100,000.
The top 100 included a mix of nonprofits with an operating budget of under $10 million with programs in designated Chase corporate responsibility areas: education, healthcare, housing, the environment, combating hunger, arts and culture, human services and animal welfare. (Very interesting to see the American Cancer Society was on the list as its budget - according to a 2005 annual report linked on their Guidestar Profile is well over $10 million)
Several groups who were in the top 100 (before Chase removed the vote tallies on individual profiles), were not on the final list, apparently disqualified. Here's what Stephanie Strom, New York Times reported:
JPMorgan Chase & Company is coming under fire for the way it conducted an online contest to award millions of dollars to 100 charities.
At least three nonprofit groups — Students for Sensible Drug Policy, the Marijuana Policy Project and an anti-abortion group, Justice for All— say they believe that Chase disqualified them over concerns about associating its name with their missions.
The groups say that until Chase made changes to the contest, they appeared to be among the top 100 vote-getters.
What can Pepsi learn so its contest can truly make a difference in local communities, help them sell more soda, and avoid having its brand get tarnished?
1. Open or Closed Set of Participants: Contest sponsors need to decide ahead of time how open to be in terms of who can participate. It's more than the basic eligibility requirements -- nonprofit versus individual or for-profit or particular interest areas or even the legal language.
With some contests, the contest sponsor vets a list of participants before letting the crowd vote. This is how Target ran its contest and more recently PayPal's FruitCake Challenge. This way, the contest sponsor's dollars are donated to a known set of organizations that have been selected based on corporate values, goals, or philanthropic strategy. There's a cost here - the cost of not getting the absolute best idea because the person who thought it up wasn't eligible to participate.
But there are some things to think about with a completely open contest, one where anyone one submit an idea and the crowd votes on the best idea and the one with the most votes wins. The sponsor needs to ask if they are truly committed to the idea that gets the most votes, no matter who suggests it?
With the recent Chase Online Giving Contest, there were last stage disqualifications. And although they had a disclaimer in the contest official rules "... or organizations otherwise not in alignment with Sponsor's corporate social responsibility guidelines. Any organization determined to be ineligible at any time will be disqualified. Sponsor retains the right at its sole discretion to determine eligibility and reserves the right to disqualify any Charity for any reason whatsoever" this disqualification made them, as Nathaniel Whittemore said, look like jerks - not to mention inspiring a chasesucks hashtag and causing some negative reactions.
2. Leader board or Open Voting Records: The big mistake that the Chase Online Giving Contest made was not providing a leader board, that tracked participants progress. Leader boards and dynamic vote counts help make a contestant's job of getting out the vote easier. With the Chase Bank Online Contest, the lack of a leader board created a lot of extra work for the nonprofits. They had to spend time combing through pages of other organization's voting records. Also, it doesn't make for a clear call to action message.
A leader board can also keeps the sponsor honest.
3. The Role of Experts: Pepsi has a list of some difficult social change problems to solve! And it's great that they're going to use social media to crowdsource ideas and redirect their Super Bowl advertising budget to provide money for implementation. Nonetheless, there is a role for subject matter experts and maybe even the people in the local communities who know the most about the problem and may be affected by the problem (and solution.)
Some contests, for example the Knight News Challenge and Case Foundation Make It Your Own, have handled this need for expertise by having a two-tiered process. The crowd identifies the top contenders, not the winners and a panel of experts selects the winners. The Brooklyn Museum of Art's Click Exhibition used two crowds - a general crowd and a crowd of curators (Allison Fine and I profiled this project in the chapter on crowdsourcing in our forthcoming book, The Networked Nonprofit)
It appears that Pepsi is partnering with some folks who have some experience so this may not be a popularity contest.
4. A Balance of Social Good and Marketing: Is Pepsi really committed to solving social problems in its communities or does it think that redirecting its SuperBowl advertising budget and using social media to promote its generosity can sell more soda? We know that corporate greed is being replaced by generosity and we know there is potential synergy between financial performance and attention to community and social needs.
I'd love to see a theory of change for this contest. Perhaps it exists. The above diagram describes the theory of change for Prizes from a recent report by McKinsey I hope that Pepsi will be transparent in sharing that if it has one.
Do these contests really have impact? Do they really help nonprofits or distract from their work? Or is this just marketing?