Two organizations that share one brand name, but differ in their business activities and tax status are in the focus of this report. These are a not-for-profit Avon Foundation and for-profit Avon, the company for women.
The Avon Foundation is a registered 501(c)(3) public charity with its IRS tax-exempt number is: 13-6128447 (Avonfoundation.org). It was founded in 1955 as a foundation for women. Since then its main mission as improving women lives and lives of their families has expanded to and concentrated on more specific health research and education projects devoted to: breast cancer and domestic violence. If to consider the diagram presenting Avon Foundation funding it becomes clear why it is rated as NPO charity: in 2011 74,1% of its funds were assigned to programs and grants; 23,2% - devoted to fundraising activities; and only 2,7% - to management.
The Avon Foundation for Women is based at the Avon Global Headquarters in New York City. However, its programs: 1) the Avon Breast Cancer Crusade launched in the UK and then promoted in the USA finds corporate and individual sponsors and supporters worldwide; 2) the global effort of Speak Out Against Domestic Violence unites activists in 50 countries that work “to build awareness, to educate, and to develop and implement prevention and direct service programs” (Avonfoundation.org). Another relatively new charity area supported by Avon Foundation is Emergency Relief – launched to support families of 9/11 victims, it has raised donations to help people affected by natural disasters or crises like: the December 2004 Tsunami in Asia, Hurricane Katrina and Rita, China’s Sichuan Province 2008 earthquake, from 2003 to 2006 it provided support to “the families of military service personnel lost or wounded in Iraq and other armed conflicts” (Avonfoundation.org). In 2011 only, Avon global philanthropy has raised and donated more than $860 million worldwide.
When conducting the online research on Avon Foundation, it makes an impressing of a leader in the field of raising donations for women health and security. However, a closer look reveals the main obstacle the company faces in its sector – limited scope of sponsors in relation to number of cancer research and against violence projects. Competition for donations is a key problem that is solved by Avon with the help of numerous sets of products they sell in cooperation with sponsors, like Empowerment necklace or mug for Speak Out, and activities they organize for fundraising, like Avon Walks against cancer, annual conferences and galas.
If the profit, i.e. fundraising and donation, circulates and is used by Avon Foundation for future charity programs and projects, then the profit earned by Avon Products or Avon, the company for women, is distributed between its shareholders and used for private gain. That is the core difference that distinguishes profit and non-profit corporations and influences the non-exempt or exempt status.
The for-profit Avon Products was established by David H. McConnell, a bookseller, in 1886 whose name is not solely associated with a beauty company, but rather with the invention of two concepts: female sale …