How to Gamble with Donations for the Earthquake
You've all heard about the earthquake in China. Nothing I can add to all the press so I'll focus on something a bit more important; namely, how did it affect me?
Let's establish some ground rules. This story is about some company in Beijing about which I happen to have a lot of inside knowledge. The story was told to me and I'll write the following in the first person because ... it's easier. Which company is it? I have no idea (and you don't have any idea either).
A few weeks after the earthquake, this company put together a financial response with the following rules:
- The company will match all employee donations one-for-one.
- The company will gaurantee a minimum donation of 250,000 RMB.
- All funds are first to be used to help company employees and their families. Remaining funds will then be donated for general earthquake relief.
This elicited the following response from me:
- My initial grief and compassion over the quake has now been replaced by a mathematical nightmare. If I donate some money, then the company will match it. But if the fund doesn't reach the 250K minimum, then my donation is wasted since the company was gauranteeing that amount. It would have been better to donate somewhere else. By donating, I'm gambling that my co-workers will cross the minimum.
- What? 250,000 RMB? That's it? For a company with a market valuation in the tens of billions of US Dollars, this seems quite niggardly (there, I used the word, so sue me). As a comparison, after the 2005 India/Pakistan Quake, a similar-sized company donated 4,150,000 RMB outright, no conditions.
- What? Cover your own employees first? With the money donated by other employees? I think that the company is on the hook for providing relief for its own employees (and immediate families) without going hat-in-hand to other employees.
After much hemming and hawing, I decided to donate some money. The response? I got an e-mail the next day telling me that the donations are only open to Chinese employees and I'm not eligible to participate (translation: We don't need your stinkin' money).
In the end, the employees blew past the 250K minimum. Like the rest of China, everyone came together in support for the victims. Adding up the company match and subtracting the amont given to the employees, the company ended up donating around 500,000 RMB. {My friend is not sure how he feels about the whole process or the result}.
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