Monthly Archives: July 2012

Olympics sponsorship controversy highlights need for establishment of clear ethical policies for sports, cause-related and charity organisations

The London Olympics sponsorship where McDonalds, Coca Cola and Heineken have become big name sponsors has drawn considerable criticism from the UK medical profession.

The Academy of Royal Medial Colleges issued a statement claiming it was sad that an event that celebrates the very best of athletic achievements should be sponsored by companies contributing to the obesity epidemic and unhealthy eating habits. Alongside McDonald’s, Coca-Cola has the exclusive right to sell non-alcoholic drinks at Olympic venues while Heineken has been named the games’ official beer.

Currently one-quarter of Britons are obese with obesity and related health ailments costing the U.K. health system about £4 billion every year. Britai like Ireland, is also battling an increasing alcohol problem.

The Game’s organisers stand accused by the UK medical profession of sending out mixed messages to its stakeholders through these sponsorship relationships.  The organisers claim there would be no Olympics without the funding that big brand multinational corporate sponsorship provides.

In Ireland at a recent health promotion conference a speaker noted that “young men are interested in four things”. The alcohol companies brew one of them, and sponsor two more of them”. Sponsorship of sport and music is a clear way to target young people and interestingly a 2010 report noted that four of the top 10 Irish Facebook pages were for alcohol brands.

Indeed alcohol companies, as major sponsors, enjoy a ubiquitous presence at nearly all of Ireland’s key music and sporting events. Carlsberg (along with eircom) sponsor the Republic of Ireland soccer team, Guinness is a major GAA sponsor, Heineken sponsors rugby and the Oxegen festival. Absolut vodka is a leading sponsor of Ireland’s most successful cultural festival, the Galway Arts Festival. Yet alcohol-related illnesses cost the Irish taxpayer over €1 billion annually.

Of course, it is not just music and sport, healthcare and charities are also under the spotlight with a move by alcohol, pharma and healthcare industries to sponsor these organisations.  Recently Professor Des O’Neill  raised disquiet at the move by Pernod Ricard, who are using their Powers whiskey brand, to sponsor the Irish Hospice Foundation’s creative writing short story competition and book.

Pharma companies sponsoring health charities usually do so because the charity’s stakeholders rely on a specific product supplied by the sponsoring company.  These business relationships provide a corporate social responsibility (CSR) platform for the sponsor and promotes the company and its products in a positive light, provides exposure to a specific audience of key stakeholders and increases profits.   Yet crucially, medical organisations and charities have a particular duty to develop clear guidelines on industries that run counter to their objectives.

It is imperative that the organisation who seeks a sponsor (known as a ‘ property’ in the business)  should take a reputation or risk management approach by constantly updating guidelines that clearly spell out what types of companies and categories are acceptable as corporate partners, along with other policies that will ensure their relationships can stand up to scrutiny by key stakeholders, the media and the general public.

For example, the UK Charities Commission in its Charities and Commercial partners report, advised the following:

  • Charities should consider establishing an ethical policy which clearly sets out the charity’s values. This will form part of their wider fund-raising strategy and they can use it to ensure that trustees, staff and any potential commercial partners share a common understanding of the charity’s ethical values.
  • As best practice, charities should highlight their ethical policies and any commercial partnerships they have in their Annual Report and yearly accounts.

At a time of unprecedented economic austerity, it is understandable that cause-related, health and charity organisations will come under increasing financial pressure. However it is also vital that the organisation take a critical ethical and risk assessment viewpoint and, by clearly setting out its ethical policy, ensures that it takes a longer term view regarding proposed commercial partnerships,that is, ones that are appropriate and in the best interests of the organisation and its stakeholders.