Protesters hammered U2 at the Glastonbury Festival on Friday night, inflating a giant balloon that read “U Pay Your Tax 2″. Security took down the protesters with force quickly, bringing about stories of excessive force.
The source of the protest is an accusation by the activist group Art Uncut that U2 is dodging taxes in Ireland, where the band is from.
The band members are among the world’s richest entertainers, raking in $130 million USD last year thanks to their massive world tour. A few years ago, U2 Ltd moved their operations from Ireland to The Netherlands, where music royalties incur virtually no tax.
Ireland’s economy was hit hard by the recent global reccession and has only recently started to rebound, so by moving their operations to avoid taxes U2 has struck a raw nerve with fans in their home country.
In addition, the band – particularly frontman Bono – has been active in raising awareness for issues like Third World poverty and hunger. It could be tough for some fans to reconcile the idea of a socially outspoken star taking such steps to prevent paying taxes, a large portion of which would support the social programs in his own country.
U2 needs to be very careful with this one. They have built a tremendous brand around music with social responsibility.
Tom’s Shoes has created a culture of social responsibility around their brand. The company sells shoes made by factories held to high standards in Argentina, Ethiopia, and China. For each pair of shoes they sell, they donate a pair to a child in need. It is simple formula that has turned this for-profit company into a success. People not only love their shoes, but they love that they are contributing to a child in need.
Danone Yogurt and Grameen Bank partnered in Bangladesh to create a cycle of social responsibility. They have built a local factory, sourced local products, and established a product that satisfies a social need (nutrition for malnourished children). As a result, they are financially successful in a place where 40% of the population lives in poverty.
Why should your brand take a more socially-responsible approach?
First, we are in a civic-minded societal cycle. People are looking for ways to contribute to the greater good. My friend and best-selling author Roy Williams is working on a book with co-writer Michael Drew about this very phenomenon. It will be in stores next year and will be well worth reading. Here, Michael Drew presents The 40 Year Pendulum on YouTube.
Second, customers are far more likely to buy from a brand that they see as socially responsible. According to BrandWeek, 55% of consumers would choose a product that supports a certain cause against similar products that don’t.
The danger, should you pursue a path of increased social responsibility (and you probably should), you need to tread carefully. Once you establish what you stand for, you need to live up to that reputation at every turn. No exceptions. You can’t support the down trodden on one hand, and appear to be escaping your tax responsibility on the other.
U2 made some other brilliant branding moves in their career, including one that may have saved the band. You can learn from it in Chapter Two of Brand Like a Rock Star by ordering the book here.