Avon Calling

Fundraising in the Rockies

By Carol Peeples

The cardboard box big enough for a pizza did it. Yet another extravagant mass mailing, the box sat unopened for months. I knew what it contained: pictures of elated people in T-shirts and sentence fragments crafted to elicit emotion. The label itself had two promos on it: “A collection of 27 journeys of charity and compassion,” and “A chain of events unlike anything the world has ever known.”

Nobody made me walk in one of those journeys of charity and compassion last year. I wanted to, from the very moment I saw the advertisement in The Denver Post for an Avon 3-Day Breast Cancer Walk.

It was a walk, not a race, the text emphasized: “three glorious days, two inspiring nights, and 60 dramatic miles of testing yourself, proving yourself, and remaking the world.” I read about an event so marvelous, so extraordinary, so good, that I silenced my residential cynic. I was going to walk.

Several weeks later my post office box barely contained the fat registration packet. Practical advice on training and fundraising counterbalanced P.R. speak about Avon’s interest in the cause of breast cancer. The Why We’re Walking section told me, “Every woman is at risk for breast cancer, and every person who walks 60 miles with boldness and tenacity is making a tremendous contribution to the fight against this disease.” The 3-Day Philosophy page explained, “The Avon Breast Cancer 3-Day is about responsibility, integrity, and a demonstration that the world can work if people work together.”

I had a minimum of $1900 to raise and training miles to log, but I was elated about contributing toward the right fight. Early in the summer, the Event Merchandise 2001 catalog arrived, its cover the same type of comfy snapshot I’d found so attractive in the January advertisement, its contents an amazing array of cause sanctified stuff. T-shirts, shorts, hats, socks, baby bibs, Dan Pallotta’s first book When Your Moment Comes, refrigerator magnets, commemorative mugs, aluminum makeup compacts—almost anything the Avon Breast Cancer 3-Day logo could be slapped on was for sale.

The silence I’d imposed on my cynic momentarily lifted. “What is up with this catalog?” she demanded.

I pointed to the claim that net proceeds from the sale of merchandise bearing the official Breast Cancer 3-Day logo would be donated to the Avon Breast Cancer Crusade.

The cynic wouldn’t behave.

“Since when did a disease get backseat billing to a makeup company? Since when did breast cancer get used to sell so much stuff?” she asked. “And who is Dan Pallotta?”

3-Day is a registered trademark of Pallotta TeamWorks, a California for-profit corporation started by Dan Pallotta in 1994. Its logo and role as creator and producer of the walk appears at the bottom of every advertisement, just under the big blue box enclosing the words “Avon Breast Cancer 3-Day.” I didn’t pay much attention to these companies that had decided to “make a difference” when I signed on. Avon was the corporate sponsor behind the Avon Breast Cancer Crusade; Pallotta TeamWorks was its “creator and producer.” That’s all I needed to know, then.

On an early August morning six friends and I finally started our 3-Day walk under a brilliant Colorado sky that hinted of the heat to come. The opening ceremony was quite moving. Giant speakers broadcast a vibrating bass, a circle of survivors moved up the middle of our thousands, and after the exhortation to surrender what was not noble inside of us, the walk finally moved out, a slow-moving mass of almost 3,000. I studied the walkers around me and saw that many participated for someone else: grandmothers, mothers, daughters, friends, colleagues, old women, young women. T-shirts and signs bore these absent women’s faces and names.

The three days were a combination workout, summer camp, and educational/philanthropic getaway. After we walked our day’s miles, we showered, ate prodigious meals, and joined our blistered friends under the big tent. A fabulous volunteer crew took care of our needs. Identical blue tents sheltered our sleep. Evening talks from spirited survivors reminded us of the women we hoped to never be; experts informed us about the disease we hoped to never have.

But something was going wrong along the course of what Pallotta TeamWorks likes to call a “life-changing, transformational” walk. Asphalt and unseasonable ninety-degree days were doing a number on my feet, but that was nothing compared to the state of my conscience, which could not keep from noticing that breast cancer appeared to have been superseded by the corporate currency of Avon and Pallotta TeamWorks.

When I picked up Avon products placed for the taking—hand cleaners outside the portable toilets, lip treatment and sunscreen beside the pit stop drink tables, shampoo and lotion outside the showers—my cynic marveled at the product placement opportunity presented by almost 3,000 captive women. When Pallotta TeamWorks’ camera crews zipped up and down the route shooting footage for future promotions, she whispered, “How photogenic we look, this long line of women filing into a Colorado skyline.”

After three days of feeling like something was wrong with me, after the closing ceremony’s final teleprompter-fed speech from Carolyn Ashton, vice president of corporate programs for Avon Products, after I returned home and said little when asked about the walk, I realized the cynic had won. Months later when I was still nursing a grudge against an unopened box, I started asking questions.

According to the Pallotta TeamWorks “Record of Impact 2001,” released on its web site in March of 2002, just over 60 percent of the 2001 funds raised by Avon Breast Cancer 3-Days went to breast cancer charities; the average since the walks began in 1998 is just under 63 percent. Pallotta TeamWorks also produces the AIDS Rides and AIDS Vaccine Rides, whose beneficiaries include the UCLA AIDS Institute, the Emory Vaccine Center, and, until its withdrawal as a beneficiary in March of this year, the Aaron Diamond AIDS Research Center. According to Pallotta TeamWorks’ 1994-2001 summary report, an average of 55.5 percent of the money raised for AIDS Rides went to charities, while the AIDS Vaccine Rides disbursed an average of 30.2 percent of their charity dollars. The Better Business Bureau’s Wise Giving Alliance’s newest standards (published on the web in draft stage) state that organizations should “spend no more than 35 percent on fundraising.” When one considers that the figures posted by Pallotta TeamWorks are for its fundraising costs and not for each beneficiary agency’s separate administrative costs, none of these figures meet this standard.

Pallotta TeamWorks’ spokesperson Lisa Cohen explains, “It’s not a black tie dinner. They’re expensive events to produce.” Pallotta TeamWorks has taken steps to reduce high costs, Cohen promises. “Low numbers aren’t acceptable.”

What Pallotta TeamWorks also doesn’t spell out in the 40 pages of sentimental prose that make up its “Record of Impact” is the production company’s inexplicable trend of distributing ever lower donor contributions to charities. In 1994, 73 percent of the money raised by AIDS Rides went to charity. By 1998 that average was 54 percent; by 2001, the percent-to-charity figure sank below 47 percent. Avon Breast Cancer 3-Day numbers demonstrate a less volatile trajectory, but they still fell from 67.67 percent in 2000 to last year’s 60.34 percent. The AIDS Vaccine Rides’ charity dollars suffered the cruelest tumble, from 50.42 percent in 2000 to a tad over 21 percent in 2001.

“Our breast cancer events are very strong,” says Cohen. She explains that the low charity numbers for the rides were affected by riders who signed on to fundraise but didn’t show up for the event. “We paid for people who weren’t there,” she says.

Pallotta TeamWorks has “completely reorganized our production model,” Cohen adds. “We eliminated brand-name snacks, and we have fewer people out on the road, use generic signs, and got rid of the big brochure. We’ve done a lot of things to cut costs. $222 million is a lot of money,” she reminds me.

Speaking of the widely touted year-to-date figure of $222 million in total funds that Pallotta TeamWorks has raised since 1994, the company fails to flaunt the $184 million it spent in order to raise this sum. According to Pallotta TeamWorks figures posted on its web site this spring, since 1994 the company spent $86.4 million on marketing and administrative expenses and $81.5 million on participant support expenses, and has collected $16.5 million in production fees.

Nosing around the $222 million for a moment, it’s an amazing amount for an organization to raise for breast cancer and AIDS charities in less than ten years, and it’s why a lot of charities that benefited from my walk don’t want this bounty boat rocked.

The University of Colorado Cancer Center gained the most, $2.5 million, which will establish an Avon Products Foundation Chair in Breast Cancer, support a Hispanic Outreach initiative, and fund several other programs under the auspices of the Colorado Women’s Cancer Control Initiative. Smaller organizations such as the Women’s Center of Larimer County received $26,000, and the Colorado Community Health Network received $45,000 to stretch across its ninety-seven sites in Colorado. These organizations appear to be doing wonderful work for medically underserved communities.

Nobody was dreaming like Dan Pallotta when he combined Madison Avenue marketing, a field general’s organizational skills, and ordinary people’s good intentions. Pallotta put his Harvard education into action, built his company from a handful of employees to hundreds, and now he claims what he apparently believes is a fair profit.

But what exactly is a fair profit for a for-profit corporation in the charity business? Back in 1994, when Pallotta TeamWorks got their first AIDS Ride off the ground, the company collected a $140,000 production fee for the effort, barely a nibble by this young corporation’s milk teeth. However, each year Pallotta TeamWorks adds new events, with suicide prevention, domestic poverty, and African AIDS Trek fundraisers planned for 2002. Before Pallotta TeamWorks writes off the whopping administrative and marketing costs each event incurs, it also collects a production fee which, while hefty enough, can’t quite support Cohen’s claim to cover the “majority of salaries” unless Pallotta and his 330 people are each working for less than $15,000.

Pallotta TeamWorks says up front on brochures and its web site that it’s a for-profit corporation. No kidding. But Dan Pallotta’s Lexus, undisclosed salary, and spanking new 47,000-square-foot designer headquarters are mere examples of altruism gone astray. And what really bothers me about the corporation that “believes in the potential of human beings” is how it co-opts the words of Eleanor Roosevelt and Robert Kennedy to preach selflessness to fundraisers while its actions reveal another side.

Pallotta TeamWorks settled with Pennsylvania’s attorney general in 1997 for $110,000 for the charge of misleading the public about the actual percentage of funds going to charities. According to a press release from the attorney general’s office, Pallotta TeamWorks “misrepresented the fact that 60 percent of the net proceeds raised for the AIDS Ride would be distributed to local charities” and that “less than one-half of that amount was ultimately distributed to charities.” Palllotta TeamWorks admitted no wrongdoing, but its 2000 financial report indicates that 31.85 percent of the money from the 1996 Philadelphia ride went to charities. Philadelphia Gay News contributing writer Timothy Cwiek reports the number at less than 11 percent.

“You’re writing old news,” Janna Sidley, vice president for communications at Pallotta TeamWorks, tells me. “We paid a fine, and we moved forward. Pallotta TeamWorks has always reported expenses and been upfront about costs. We’ve never made any guarantees,” she says.

Pallotta TeamWorks has also left a string of unsatisfied beneficiaries. Back in 1998, when Bryon C. Trott was executive director of the Gay and Lesbian Center in San Antonio, his colorful response to the Tanqueray Texas AIDS Ride was widely quoted: “We trusted them, and we got screwed.” I’m still reporting old news, but what I would argue is that Pallotta TeamWorks has not “moved forward,” and that its past history lends insight into its present doings. More recently, Palllotta TeamWorks lost its suit to prevent the San Francisco AIDS Foundation and the L.A. Gay and Lesbian Center from holding their own fundraising ride. These beneficiaries had decided to go it alone due to Pallotta TeamWorks’ cost overruns. Pallotta TeamWorks President Steve Bennett warned them, “We will bring every resource we have to bear to shut down your event.”

When I asked to speak with Dan Pallotta, he was out of the office and unavailable for comment.

The biggest letters on my “free” 3-Day T-shirt say AVON, which describes its relationship to breast cancer as a “cause marketing initiative” and explain that funds “to accomplish this mission are raised in two ways: through net proceeds from the sale of the Crusade’s special ‘pink ribbon’ products by Avon’s independent sales representatives”—the stuff we buy—“and through net proceeds from the Avon Breast Cancer 3-Days”—the dollars we raise. So, how much is Avon putting in the pot?

Breast Cancer Action, a San Francisco-based education and advocacy organization, says not enough. Barbara Brenner, the group’s executive director and herself a breast cancer survivor, says “most of the money Avon donates to breast cancer is other people’s money.” Two years ago Breast Cancer Action launched a campaign encouraging people to look at these fundraisers with a more critical eye.

Avon receives the credit for giving away the millions of dollars actually raised by thousands of walkers, something I saw firsthand in press releases that repeatedly mention Avon’s “gifts” but fail to reveal very little of this money comes from Avon’s pocket. As the corporation behind what they call their “philanthropic initiative,” Avon also gains valuable advertising and exposure from the fundraisers yet seems unwilling to tap much of its own till.

Breast Cancer Action’s bright orange brochure “Think Twice Before You Do the Avon 3-Day Walk” states that if Avon would cover the marketing and administrative costs of the 3-Day walks, the amount of dollars that breast cancer organizations receive from total funds raised would increase from 65 to 85 percent. Last October, Breast Cancer Action and other breast cancer organizations formed a coalition called Follow the Money and approached Avon with the suggestion that the company use part of its $478 million profits from 2000 to underwrite the walks’ expenses.

This May, several members of the alliance purchased shares of Avon stock in order to read from an open letter at its shareholders meeting. “Avon could generate enormous benefit from underwriting the costs of the walks,” the alliance said, adding, “Most walkers—as well as those who sponsor them—believe that 100 percent of the money they raise goes toward breast cancer programs and/or research.”

Susan Arnot Heaney, director of the Avon Breast Cancer Crusade, would not return telephone calls but wrote in an e-mail response, “ Each year, Avon Products, Inc., spends in excess of $20,000,000 on the breast cancer cause to cover its widespread philanthropic activities around the world, including the Breast Cancer 3-Days.” Avon also pays for “all salaries, expenses, and costs of running the Avon Foundation,” a charity that “manages and disburses the funds raised by the Avon Breast Cancer Crusade.”

While Heaney denies that activists have influenced Avon’s fundraising decisions, in early May, Avon people told members of the alliance that it would not renew its contract with Pallotta TeamWorks for future fundraisers. In mid-May, Heaney announced that Avon would not commit to 3-Day events in 2003 and described this change as “part of the continuous evolution” of the Crusade’s fundraising.

We join Breast Cancer Walks or AIDS Rides because we care about those who are afflicted with these terrible diseases. We assume those who organize and oversee fundraisers will have these same intentions. Because of this assumption, we may not ask enough hard questions of corporations like Pallotta TeamWorks and Avon, and we need to wonder when our questions aren’t answered.

A woman I walked with last August wrote me, “I think it is useful for me to think of what Pallotta and Avon did. They made me feel used. I went into homes they couldn't and asked people who might not have given, as a favor to me, to give money. And they proceeded to use it not with the same regard I had for it—$30.00 that goes to cancer research or some woman in need. They sucked me in.”

The golden prose of corporate copywriters no longer works on me. Instead, I see one company whose youthful idealism apparently succumbed to middle-aged greed and another company that seems to care more for the sound of cause-marketing than it does for the cause. Together, they’re using our willingness to believe in their good intentions. Together they’re going after people like me, except these people are not yet disillusioned.

“You care. You wouldn’t call if you didn’t care,” a Pallotta TeamWorks’ spokesman told me from its Los Angeles headquarters. “I know you’ll be back to join us for another walk.”

Oh, I care, but he could not have been more wrong.