Want to Help Treat AIDS in Africa? Buy a Cellphone

October 04, 2006

A new line of products from companies like Gap, Armani Exchange and Motorola aims to raise money to help fight AIDS in Africa.

Those companies, along with Converse and American Express, created the new products, which bear the brand name Red and are to begin appearing in stores this month. The companies are committed to selling the products for at least five years, and plan to donate part of their profits to the Global Fund to Fight AIDS, Tuberculosis and Malaria.

If the Red products sell the way the companies’other products do, the fund stands to gain hundreds of millions of dollars annually — enough to provide AIDS medications to hundreds of thousands of Africans each year.

The campaign was created by the musician Bono and Bobby Shriver, a California politician and member of the Kennedy family. Both are leading advocates for the Global Fund. The fund, which will collect and distribute money from Red in Africa, says the hundreds of millions of dollars each year given by world governments is not enough to provide medications to all of the people who need them.

The retailers who have partnered with Red are not the first to participate in cause-related marketing. Companies paid $1.11 billion last year to charities that lent the use of their names to sell products, according to IEG Inc., a sponsorship consultant firm. But the Red marketing plan has the potential to create a profitable fund-raising model for the retail industry, which in the past has sold mainly trinkets that helped burnish the company image rather than increase the bottom line.

“Red is one of the first major efforts to tap more Americans to contribute to fighting AIDS a continent away. And they can do so simply, just by switching their cellphone or buying some of the clothing that's part of the Red line,” Bill Gates, the Microsoft chairman who has made fighting AIDS a center of his own philanthropy, said in an e-mail message.

Mr. Gates said he was at first skeptical that the group would be able to persuade large retailers to participate. “I wasn't sure they would get enough companies on board to make Red a viable entity, and whether it could generate enough revenue for the global fund to make it worthwhile,” he said. “I was pleasantly surprised on both counts.”

The Red retailers are embracing a brand that is not their own, a move retailers are usually loath to do, and Red products will sit at the heart of the companies’ collections rather than in small baskets on check-out counters. The Global Fund and Red say they intend for the retailers to pocket a profit on Red products.

“Gap in the beginning couldn’t understand how they were going to make money,” Mr. Shriver said. “They wanted to do a T-shirt and give us all the money. But, we want them to make money. We don’t want anyone to be thinking, ‘I’m not making money on this thing,’ because then we failed. We want people buying houses in the Hamptons based on this because, if that happens, this thing is sustainable.”

Red products have been in stores in Britain since February, and the share of profits that has gone to the fund passed the $10 million mark last month, said Richard Feachem, the executive director of the Global Fund. That is twice what the fund received from companies and individuals from 2002 to 2006, he said. The Bill and Melinda Gates Foundation has been the largest nongovernmental donor to the fund, pledging $650 million.

“I could go with my begging bowl every year to a major corporation and say ‘give me some money,’ and they might give me a one-off contribution, but it wouldn’t be large and it wouldn’t be sustainable,” Dr. Feachem said. “Red is intrinsically sustainable because Red is good for the companies.”

With the $10 million it has earned so far from Red, the fund is financing testing and treatment of HIV-positive women and children in Rwanda and is taking care of orphans in Swaziland whose parents died of AIDS, Dr. Feachem said.

HIV infection has exploded in developing countries in the past decade. The fund plans to dedicate money from Red solely to help people in Africa, which has the world’s highest percentage of HIV-positive adults, according to Dr. Feachem. But there are also substantial AIDS problems in other countries like China and India, which has the highest number of people infected with HIV, Dr. Feachem added.

The cost of AIDS medications has fallen in recent years in part because of negotiations with several pharmaceutical companies, led by former President Bill Clinton. Today, medical care for one person costs about $1,000 a year, and there are about five million people in Africa who need treatment, Dr. Feachem said. That puts the bill to treat them all at $5 billion a year.
The fund has received $5.7 billion over the last four years, and an additional $4.3 billion, mostly from governments, has been promised. The United States contributes about $600 million a year.

Income from Red will not close the budget gap, but its money will certainly help, said Tommy G. Thompson, the former secretary of health and human services and current honorary chairman of the Global Fund.

“The reason the private sector’s got to be involved is there’s just not enough money coming in from the government,” Mr. Thompson said. “This is a huge thing and the demand and the need is so great that we just don’t have enough money coming in from the governments to do it.”

The retailers selling Red items have gone to great lengths to link the products to Africa.
Gap has produced several of its Red items at its factory in Lesotho.
American Express carries writing on its red-color card, now available only in Britain, that says: “This card is designed to help eliminate AIDS in Africa.”
Motorola is manufacturing some of its Red phones in Nigeria.
Converse, too, has incorporated African themes into its Red line. One of the company’s shoes is made of Mali mud cloth, a traditional woven cotton fabric that is painted with dyes made of mud and bark, said David Maddocks, the chief marketing officer at Converse, which is owned by Nike.