Charity ‘Discrimination’

I am eating a Yoplait™ Yogurt right now for lunch. If you have noticed (have people noticed?) if you save the lids and send them in they pay 10 cents towards a breast cancer fund. On the wikipedia it states:

“In the U.S., Yoplait participates in an annual program called “Save Lids to Save Lives” to raise money for breast cancer research. Yoplait donates ten cents per pink foil lid that is mailed to the company, but they state in fine print on all promotional materials that their donations will be capped at $2,000,000 per year.”

Now I ought to be clear–I think it is good that they are donating money to charity. But I have always been of the belief that a firm (particularly a firm owned by General Mills) acts in order to increase its bottom line. Not for the pure purpose of altruism. And I think that this charity model fits my theory.

This allows for charity discrimination (a form of price discrimination). For example, if you took the total amount they donated in the end and divided it by the amount of yogurt they sold it would probably be more like 0.1 cents a yogurt. That would not be a compelling charity campaign. “We will donate less than a cent per yogurt sold!” It doesn’t sounds nice. However, by making it a 10 cent donation for those who go through the effort to save up lids and send them in they are able to appeal to those with a conscience whilst being sure not to donate to those who don’t care. So for those people whose yogurt demand function takes into account charity and/or altruism, Yoplait offers that option. And for those who don’t care about altruism in their yogurt and saving up lids (like me) they don’t have to pay. It allows them to get maximum return on their charity. Clever.

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