Domino's Pizza donates $174 million to St. Jude Hospital

(AP) — The world's largest pizza chain by sales is betting big on its customers' generosity, and it's not alone.

Domino's Pizza recently pledged to donate $174 million to St. Jude Children's Research Hospital over the next decade. The funds will come from its long-running Round Up campaign, which asks customers to donate the difference between the price of their purchase and the next highest amount. The pizza chain has already raised more than $126 million this way over the past two decades for ALSAC, the Tennessee-based hospital's fundraising organization.

Domino's Pizza is the latest and biggest success story of “checkout charity.” According to the professional organization Engage for Good, the fundraising tool is among the top-grossing programs in 2022, raising 24% more money than in 2020, totaling $749 million.

In this photo taken Wednesday, May 15, 2024, in New York, the Domino's Pizza app displays the option to donate to St. Jude Children's Research Hospital. Domino's is the latest and largest example of old and new philanthropic allies coming together to succeed through “Checkout Charity.” (AP Photo/Peter Morgan)

That staying power has franchisees hopeful that consumers will continue to donate their coins, despite concerns about the shift to online shopping, economic headwinds and fatigue from frequent solicitations.

Meanwhile, some retailers are fleshing out partnerships they've forged for the first time since the racial justice crisis of 2020 pushed corporate citizenship to the forefront of business practices.

Why it works

Research shows that asking customers to round up is generally more effective than asking for a fixed amount, even if the total amount is the same. That's because rounding up makes parting with money less painful, according to a study published in the Journal of Consumer Psychology.

“It feels like it relieves pain,” said Katie Kelting, a marketing professor at Saint Louis University who led the research team.

The timing of the appeal brings up a few other psychologically powerful factors, says Ike Silver, a marketing professor at Northwestern University: Buyers tend to visualize purchase amounts in whole numbers anyway — a $24.75 bill, for example, will be marked as $25.

What's more, Silver said, the act of donating “becomes a little bit subconscious” — shoppers rushing through checkout lines don't have much time to consider their reasons for opposing a donation.

“They're taking advantage of the buying habits of consumers who just spend money and don't think too hard about it,” Silver said.

Help PetSmart help animals

Proponents of this strategy believe that appeals for donations attract everyday donors to an accessible form of giving that has a low barrier to entry. The practice has become so common that cumulative donations from shoppers have even become a significant source of funding for some issue areas.

PetSmart Charities reports that more than 80 percent of cash donations are made through the PIN pad at checkout and is considered the largest grant maker to animal welfare causes. With an ongoing PIN pad donation program for 20 years, the pet superstore asks customers to donate a fixed amount starting at $2.

The donations support causes that directly affect pets, like improving access to veterinary care and animal evacuation services during natural disasters. This authentic connection is one reason why PetSmart Charities president Amy Gilbreth believes the average donation is just under $3, a figure that is expected to reach $40 million by the end of the year.

Without a tightly aligned mission, Gilbreath predicts it will be a bit harder to get customers to donate.

“When you say, 'I shop at PetSmart, I love pets, and by donating to PetSmart Charities you can help pets in need of a family or support pets in other ways,' it's a lot easier for people to say yes,” she said.

In fact, Kelting said the fit between charities and distributors is “tremendous.” Researchers say that while customers may perceive solicitations at the point of sale as a violation of their social contract with companies, partnerships between like-minded organizations are viewed more positively.

The donation came after a connection at REI.

To help make outdoor spaces more inclusive, REI Co-op launched a member-supported public charity in 2021. The goal was to put more resources into surrounding communities as they emerged from COVID-19 closures.

At the company's 185 U.S. stores, sales associates often have personal conversations with shoppers about their upcoming trips, and this unique connection with nature-loving customers leads to requests for donations at the register, according to Squire Simpson, executive director of the REI Cooperative Action Fund.

REI cashiers will end the conversation with an open-ended question that allows customers to choose whether to round up the amount or donate whatever amount they want. Last year, stores collected about $2.2 million from 1.3 million individual donations, up 2.5% over 2022, Simpson said.

Grant recipients include a Pennsylvania organization that promotes cycling among black women and an Alaska nonprofit that provides therapeutic recreation for people with disabilities.

“This is not a broad-based corporate beneficiary,” Simpson said.

Checkout charity tired?

Still, with similar programs popping up in checkout lines across the country, some observers worry that even good intentions won't shut off the taps. Northwestern's Silver wonders whether “cashier charities” will become less effective as they grow in popularity.

“If something really does appear every time you swipe your card, there's a risk that people will start to notice and feel more manipulated,” he said.

Misinformation doesn't help either: Contrary to a common internet meme, tax experts say that the money customers donate at the time of the sale doesn't count as company income, so stores can't deduct it.

Domino's leaders are confident in their carefully crafted strategy: The iconic St. Jude's Children is printed on Domino's pizza boxes, and the established partner is already one of the best-known when it comes to point-of-sale donations.

Above the checkout widget is a summary donation request with an image of the child. During the 11-week end-of-year campaign, customers are greeted with a “click-and-go” pop-up asking for donations of $2, $5, $10 or $20. The request details St. Jude's work and includes overall donation tracking.

Domino's raised $8.9 million through the roundup last year, and executives believe that number will grow even more as the company works to implement a new five-year strategy to grow its customer base.

CEO Russell Weiner described the high-dollar philanthropy as an “absolute goal” that won't necessarily be “easy to achieve,” but the effort provides new incentives to meet the latest nonprofit benchmarks.

ALSAC CEO Rick Shadyac said the additional funding from Domino's will help St. Jude's efforts in 80 countries to triple survival rates for children with the six most common types of childhood cancer, including rolling out a program this summer that will eventually provide free chemotherapy to 30 percent of the 400,000 children worldwide who are affected by the disease.

“What does that mean? More sales and more stores? It means more customers,” Weiner told The Associated Press. “The more we do there, the more people who can raise money for St. Jude's.”

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