This caught my eye this morning along with the first comment on the Wired website. Now excuse my maths but I think the basic principle of my argument still applies....
Great review of the new @livestrongfit spin bike in @wired !! http://tinyurl.com/34p6v2x
- Lance Armstrong Twitter feed.
The article reads:
The Livestrong Limited Edition Indoor Cycle differs from all other stationary bikes in just one way: It looks totally bad-***.
The bike, which comes in the trademark yellow-and-black colorway, will cost $1,700, $1,000 of which goes to Livestrong, Lance Armstrong’s cancer charity. Just 500 will be made, and there are several Lance and cancer-themed design flourishes: the number 28 on the fork represents the “28 million people living with cancer,” and the “seven stars on the seat post represent Armstrong’s record-breaking seven Tour de France wins.”
- What interested me most was that $1000 of the $1700 price tag goes to Livestrong.
The first comment below the article says:
-“Stepping back - its a cool product. It's a cooler gesture to be donating more than half the cost to cancer research. It's even a fair price for such a good looking piece of equipment. - I'll lobby my health club to consider a few of these and do the right thing”
On the surface $1000 out of $1700 does seem very good. To the casual observer that’s $1000 straight from the purchase for “cancer research”. If I was going to buy a spin bike I might as well buy this one because well over “half” is going to charity and its a good cause. The fact that it has the “28” logo down the side of the bike means it’s a representation of “cancer suffers” - again reasserting the theme its for "cancer research".
But this is where the Livestrong lines become very blurred. The $1000 is going to Livestrong.com or Livestorng.org? How can anyone really tell if the $1000 if for the "for profit" or for the "non-profit" entity? I would assume the .org enity?
Now if true then of that $1000 we know that a rounded 80% goes into "Programs" with the remaining 19% into “Admin/Fundraising”. So now we're down to $800 of the $1000. If we look that total revenue or donations/grants for “Programs” in 2009 was $31,000,000 (rounded). Travel was $2,000,000 and salaries were $6,000,000 and legal bills were a staggering $9,000,000. So if I subtract those figures away from the $37,000,000 I’m left with $14million or 37% of the “Program Fees”.
Therefore for the $1000 Livestrong donation became $800 for Programs only and 37% of this is for “awareness” program which results in $296. The $296 could go anywhere.... We’ll never know if that goes to salaries or bonus awards or to awareness programs but not cancer reseach as the first poster lamely suggests. (Although I think the marketing idea was to create the that very impression)
Now it’s a smart way of marketing a $1700 bike. You think it’s being rolled into the charity but in reality the it’s just funding more of Livestrong expenses. My assumption would be the $700 component goes to Livestrong.com for the manufacturing and distribution of the bike. Having Lance send a twitter about it adds to the feel that’s its “all for cancer”.
Cheap and nasty marketing if you ask me.
And for the life of me when they say $1000 goes to Livestrong I do hope at least this is the "non profit" entity. A simple Google search means you can only buy it from the "http://www.livestrongfitness.com/product/ls28ic/" - Livestrong Fitness.com site which is obviously for profit with the byline: "Join the fight
With each purchase, $1,000 will be donated to LIVESTRONG® to improve the lives of people affected by cancer
" - its the (R) which worries me the most.